Tankless water heaters have been on the market for a few decades now, but it was the recent advent of condensing hybrid on-demand water heater technology that drew the interest of researchers to study the potential applications for a tankless water heater in a “light commercial” restaurant setting. Prior to hybrid models, one of the major obstacles against realized efficiency in the field was older tankless models had issues with short draws because of the amount of energy required to bring the water temperature up to a safe level for washing hands and dishes, eliminating cost savings and rendering this type of unit more – not less – expensive to operate.

In 2013, the Food Service Technology Center (FSTC) – a Pacific Gas & Electric Company-sponsored organization whose mission is to identify realistic opportunities for improving energy efficiency in a restaurant environment – partnered with Fast Water Heater Company to launch a pilot program to test whether a condensing hybrid water heater could meet the demands for hot water and stringent health codes in the fast-paced environment of a Mexican taqueria in San Ramon, California.

The study’s first step was to measure the restaurant’s demand for hot water and the effectiveness of the existing gas-fired tank water heater. This gave an evaluation of the amount of energy required and the associated cost, as a baseline for comparison to the new unit.


Fast Water Heater then replaced the old 75-gallon tank with an on-demand unit that included a 7.2 gallon reserve tank of hot water to meet the restaurant’s needs in peak periods. The study lasted 145 days, and the results were even better than expected:

  • The hybrid system heated water with an efficiency of 88.1%, compared to 66.1% with the old tank unit.
  • The hybrid system faced an average inlet temperature 6 degrees colder than during the baseline study. However, the unit was able to generate an average temperate increase of 79.6 degrees, for an average temperature of 145.7 degrees. Measured against a Health Department minimum requirement of 120 degrees, the hybrid system passed the health and safety test with flying colors.
  • When the restaurant was closed, there was no waste from keeping the 75 gallon storage tank of water hot so the restaurant saw a marked decrease in monthly utility expenses. In fact, the new water heater projects to have a lifetime savings of about $5,000 in energy costs.

An otherwise unexpected benefit from the hybrid system was the space savings found in the kitchen. The restaurant recaptured eight square feet of valuable kitchen real estate in making the switch – a significant value considering the high cost of real estate in the expensive Bay Area real estate market. Above all, the pilot study proved that condensing hybrid water heaters have the potential to save significant space, money, and energy for restaurant operators.

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