A recent characterization of the Minnesota rental multifamily market has shown that over two-thirds of housing units are served by large storage-based commercial gas water heaters or dedicated boilers tied to an indirect storage tank. These systems are inefficient due to non-condensing operation and high standby losses.

This project will conduct an evaluation of central condensing tankless water heating systems (CCTWHs), whose high turndown, controls, and modular design yield more consistent operation in a condensing mode and significantly reduce system standby losses through eliminating/minimizing thermal storage. Manufacturers of CCTHWs claim energy savings of up to 40% over storage-based systems.

The goal of this study is to verify the energy savings potential of CCTWHs in Minnesota multifamily housing, quantify benefits and potential drawbacks, and extrapolate to other sectors. The research team will conduct a field assessment of CCTWHs at two multifamily sites in Minnesota (for an 8-month pre/8-month post-operating period) and quantify baseline SHW system performance and CCTWH performance post-retrofit.

Results will be compared to the existing baseline equipment and extrapolate findings to other building types and load patterns, other multifamily buildings, hospitality, and schools/universities. Large therm savings from CCTWHs could substantially improve the delivered efficiency of service hot water systems.

Project Summary


  • Quantify the energy savings potential of CCTWHs
  • Extrapolate findings to other building types
  • Develop sizing and assessment tool


  • Task 1: Perform field assessments at two multifamily sites over a 16-month period.
  • Task 2: Quantify the energy savings potential of CCTWHs.

Non-energy benefits

  • Improved quality of delivered hot water and “endless” hot water.
  • Extended product life through rotation of duty between units.

  • Reduced footprint of heating equipment.