INTEGRATED SPACE CONDITIONING AND WATER HEATING SYSTEMS: ONE SYSTEM IS OFTEN BETTER THAN TWO

Jennifer Thorne

December, 1998

Introduction

Water heating accounts for 15 percent of residential energy use in the United States, making it the second largest end use—space heating is first—in the average home (EIA 1995b). Integrated hot water heating systems provide both space conditioning and hot water heating with one appliance or energy source. They offer consumers an opportunity to save energy and significantly reduce their household energy bill. Analysis shows that integrated systems can cut annual household energy costs for space conditioning and water heating by 2 to 27 percent depending on household variables and regional climate conditions.

Electric, gas- and oil-fired integrated systems are available in several configurations. Despite their availability and benefits, however, the market for these products remains small. As of 1994, approximately 1.5 million American households—less than 2 percent of households—used an integrated system of some kind to meet their space conditioning and water heating needs. Of this number, 800,000 households used water heated by a space heating system, while 750,000 used a water heater to provide space heating (ADL 1996; EIA 1995a).

High-efficiency integrated systems claim a small fraction of all space conditioning and water heating sales. Annual shipments of heat pumps total over one million units, yet fewer than 4,000 integrated heat pump systems have been installed in U.S. homes. Gas- and oil-fired boiler shipments top 300,000 annually, but according to leading manufacturers of integrated boiler systems, fewer than 300,000 integrated units have been installed since the early 1980s. And, while overall sales of combination water heaters grew throughout the 1980s, growth leveled off in the early 1990s and combinations now consistently account for approximately 2 percent of the home heating market (ADL 1996). This percentage includes all combination systems; high-efficiency condensing units make up only a portion of these sales.

Scope of the Report

Integrated water heating systems, also known as dual appliances or combination systems, are manufactured in a variety of configurations for all residential fuel sources. In this report, we describe the types of systems available, focusing on integrated systems that are more efficient than the average conventional equipment on the market today and those that can be operated and provide energy savings year-round. Thus, desuperheaters and low-efficiency combination water heaters will not be covered. In addition, we present the results of economic comparisons between conventional and integrated systems. This analysis compares the life cycle costs and presents the payback period associated with the installation of the highest-efficiency integrated systems instead of the average-efficiency conventional systems constituting the bulk of purchases today. Three purchase scenarios are presented: (1) new construction; (2) planned replacement of space conditioning system only; and (3) conversion of an existing space conditioning system to an integrated system. We only include comparisons within the same fuel type but it is important to note that in some cases significant energy and cost savings can be achieved by switching fuels, particularly in switching from electric to gas or oil water heating. Fuel-switching cases were not included in the interest of time and simplicity and the recognition that many households lack the option due to limited access to alternate fuels in their region.

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34 pp., 1998, $13.00, A982