Why Your Commercial Building Should Install Tankless Water Heaters

By switching to commercial tankless water heaters, you provide your property’s tenants with access to on-demand hot water while reducing operating costs. Storage tanks are notorious for wasting fuel. Meanwhile, tankless systems are zero-emission systems that only heat water as needed, eliminating standby heat loss.

The demand for hot water in commercial buildings spikes randomly throughout the day. It’s not unusual for several tenants to use gallons of water simultaneously during peak hours. Unfortunately, traditional tank water heaters often fail to perform well in these situations. Heating the entire tank typically takes an hour or so, a time not everyone can spare.

Your tenants deserve better. Instead of relying on a single stored tank, provide everyone with access to on-demand hot water. Here’s what you should know about upgrading to tankless water heaters in commercial properties.

How Tankless Water Heaters Work in Commercial Buildings 

A tankless water heater heats water the moment it is needed, which makes it far more efficient for commercial buildings than a traditional tank. Commercial spaces have higher and less predictable demand. For example, 10 tenants showering in the morning can use more than 150 gallons of hot water, which exceeds the capacity of most tanks and leads to downtime.

Tankless units offer unlimited hot water, reduced energy consumption, and enhanced performance for multi-unit and mixed-use properties. A high-GPM model can easily support multiple high-flow fixtures without increasing your energy bills. They’re designed for heating water on demand, so your tenants never have to wait for hot water. 

Learn more: How Does a Tankless Water Heater Work?

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Key Benefits of Tankless Systems for Commercial Properties 

Upgrading to a tankless water heater is a big investment for any property owner. Is it worth it? If the long-term advantages outweigh project costs, yes. 

Here’s how they deliver better reliability, energy efficiency, and performance under heavy usage.

Unlimited Hot Water on Demand 

Since tankless systems heat water to your desired temperature as it flows, fixtures never “run out” of hot water. There’s no waiting time, unlike storage tanks. Your tenants would appreciate not having cold water interruptions.

For property owners, you’ll also get to deal with fewer complaints. Tankless systems deliver consistent water temperature from the first user to the last, even during cold winter months.

Energy Savings and Lower Utility Bills 

Tankless units resolve a significant issue with conventional systems: standby heat loss. They don’t waste fuel since the energy consumed depends on the amount of hot water you use. On the other hand, storage tanks are constantly burning fuel.

During unit installation, you’ll be asked to choose between natural gas and electric tankless water heaters. 

• Gas models deliver higher flow rates and lower long-term operating costs, but installation is more expensive due to gas line adjustments and venting requirements.

• Electric units cost less upfront and produce zero emissions, making them a cleaner option.

Note: Work with a licensed HVAC specialist to ensure your new gas or electric heater meets all local building codes.

Learn more: The Ultimate Guide to Buying A Water Heater

Lower Risk of Flooding Compared to Tanks 

Tankless systems do not store water, removing the risk of flooding. They pose fewer safety risks in commercial spaces with sensitive mechanical rooms, such as retail spaces and offices.

In contrast, traditional tanks store 40 to 100+ gallons of water. If the tank ruptures, that entire volume could flood your storage room, destroying nearby equipment or appliances.

Space Saving for Mechanical Rooms 

You can mount tankless units on the wall, freeing up floor space. Instead of bulky 80-gallon water tanks, use your mechanical room for additional HVAC equipment, such as water softeners, heat pumps, and air conditioning systems.

Tip: Mounted units are also easier for technicians to access. Repair costs typically spike when repairmen have to work with large, heavy fixtures and appliances that restrict movement.

Modular Design for Redundancy and Reduced Downtime 

You can install commercial tankless systems in banked units. If one unit needs maintenance or fails, the others continue supplying hot water. 

Yes, you might experience weaker flow rates, but you’ll also prevent total shutdowns and interruptions. This is especially critical for restaurants, gyms, clinics, and multi-residential buildings that serve several customers and tenants at peak hours.

Likewise, modularity lets you scale capacity up or down depending on seasonal or peak demand. You can improve reliability by distributing the load across several units.

Longer Lifespan 

A tankless water heater may cost more upfront, but its long lifespan delivers significant long-term value. With proper maintenance, a commercial tankless unit can operate for more than 20 years. This means fewer replacements, fewer disruptions, and lower repair costs over the building’s lifetime. 

By comparison, traditional tanks typically last only 10 to 15 years and require more frequent servicing. When you factor in reliability, reduced downtime, and long-term savings, the tankless water heater price becomes a worthwhile investment for any commercial property. 

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Do Tankless Water Heaters Make Sense for Your Property Type? 

Commercial properties have varying hot water demands, which tankless systems can meet by scaling their output, preventing downtime. You get on-demand hot water while reducing your energy consumption. Here’s how they benefit different property types:

• Multi-residential buildings: They prevent cold water interruptions despite staggered morning and evening demands.
• Offices and coworking spaces: Maintain consistent water temperature in restrooms and pantries, even during the lunch rush.
• Restaurants and small hospitality establishments: Tasks such as dishwashing, handwashing, and cleaning require a continuous high-temperature supply. Tankless systems provide this with no problem.
• Gyms, spas, and wellness centres: Tankless systems eliminate downtime between users during heavy shower usage.

FAQs About Tankless Water Heater Installation

What are the benefits of tankless water heaters in commercial buildings?

On-demand water heating is the biggest advantage of tankless heaters. They provide endless hot water without recovery time, no matter how many fixtures run at the same time. The only downside is that the flow rate may weaken slightly during peak periods. But considering their space and energy efficiency, it’s a reasonably small tradeoff.

How much does a tankless water heater cost for a multi-unit property?

The total cost of professional installation would depend on the number of tankless units you need. A new tankless water heater generally costs $3,000 to $5,000, although higher-GPM models would cost on the higher end. Note that you can’t use low-GPM models that support one or two fixtures at a time.

Do tankless water heaters save money for businesses?

Yes, an energy-efficient tankless system can reduce your utility costs by eliminating heat loss. It only uses its fuel source as needed. On the other hand, a storage tank burns through gas or electricity as long as it isn’t full. Although seemingly small at first, the savings from using less energy could add up to thousands per annum, depending on your property’s size.