Heating with Tankless Water Heater & Hydronic Air Handler vs. Gas Furnace


I've looked around online and haven't found a lot of good information on home heating with hydronic air handlers used in conjunction with tankless water heaters (TWH). I would be interested to hear from anyone who has experience with these "combined" or "integrated" space- and domestic water heating systems.  I'd like to know a few things, especially as they compare to a condensing gas furnace:

- How efficient are these systems?  I've read that they match the efficiency of the water heater, so if you have a 94% efficient condensing TWH, your home heating is then 94% efficient as well. Of course, this does not mean that they necessarily heat as effectively as a condensing gas furnace, since the heated air from these systems is not as warm as that from a gas furnace, correct? 

- What are your thoughts on ease of installation and ongoing maintenance requirements? I have heard of issues with scaling, and a need for very frequent cleaning of the inlet strainer to the TWH.

- When the water from the air handler is returned to the TWH it is much warmer than typical incoming water to a TWH.  It is my understanding that higher incoming water actually reduces the efficiency of a condensing TWH - is this still true with current condensing TWH models?

- Bottom line, would you put in one of these systems, or opt for a separate condensing gas furnace?  Are there situations when you would choose one over the other?

I'm interested to know more about these systems in general, but also have a specific home in mind: a 2400 sf home in Portland, OR built in 1928 (currently with little insulation), that has a condensing TWH already installed.

Thanks for any insight you can offer!

- Chris

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I've done this with a conventional water heater. Works well except for design temp mornings where there wasn't quite enough hot water for space heating and a hot shower. EF on the WH goes up since there is more heat produced vs. standby losses.

What is the cost for air handler + water coil + recirculation pump vs. condensing furnace + AC evaporator? How long are the water lines between the water heater and air handler? Are local electric rates feasible for a dual fuel setup?

Thanks for the reply, Bob.

There will be no AC in the home, and the net cost for air handler and recirc pump is going to be very near the same cost (possibly slightly more) than the condensing furnace.  (This is after Oregon tax credits.) 

I guess the fundamental question I'm asking is: which setup is going to burn less gas: TWH w/ Hydronic air handler, or TWH and a separate condensing gas furnace?

For the same price I'd keep the appliances separate. Once you go to condensing units there is little difference in fuel consumption. Condensing HWT parts are special order items, condensing furnace parts are typically on the shelf at the local parts house. In OR you don't want to be without heat for very long !!

Sounds good - thanks again, Bob.  I was leaning toward the furnace, mostly because it sounds like there would be a fair amount of additional maintenance with the hydronic setup.  

See "Why Pay for Two Condensing Systems When One Will Do?" by Schoenbauer et al at:


Why not get 2 systems if it's the same price? Furnaces are mass produced keeping costs down, hydronic air handlers are still a "speciality item" in residential with low production numbers. You won't find a single hydronic air handler (or any parts) in stock at the local supply house. Keeping it conventional saves on future maintenance costs.

FWIW I feel the same way about high SEER/Zoned systems. Better to have 2 simple units than a fancy high SEER system with zone controls. Similar upfront and operation costs, lower maintenance costs.

Barbara, thanks for the info - this is some of the research I was interested in seeing.

That report shows that a combined system is more efficient than an 80 AFUE furnace and very inefficient water heater. It does not seem to indicate that a combined system would operate more efficiently than separate condensing TWH and furnace.  It states that a combined system works AS efficiently (but doesn't show any comparison data):

"The combi systems installed performance was the same as separately installed high efficiency furnaces and high efficiency water heaters."


What are you hoping to save?  Have you done any calculations?  Is the house a POS, or has it been fixed?  If fixed, fuel shifting is chasing pennies not dollars. 


Just put in a high efficiency air source heat pump and eventually get rid of that cwh, put in an electric water heater and save yourself a meter charge.  

The new ASHP's are amazing.  Gas will not stay cheap, but electricity will.  Don't make long term investments based upon short term price.

Rinnai has application note on how to use their tankless hot water heater with a Rinnai water to Air heat exchanger.

Build America - via Building Science Corp, published report in 2012,


Like all devices,  a tankless hot water heater can fail.  Waking up to a cold house, only gets worse when the shower is just as cold.  I tend to over build and make sure I have redundant systems because I prefer at least a lukewarm shower in the morning.  But that's my preference - and yes,  I have also considered using water to air heat ex-changer, my Rinnai was sized so I could do so...

Not all TWH's can handle it - double check with the manufacturer.  Also using a TWH for house heat will definitely shorten the life - and nearly all the TWH have microprocessors that monitor them.  The manufacturer can tell the run hours and will know if the TWH has been used as a house heater.  Rinnai allows (encouages) the use, but shortens the warranty.

Issues with the water - can often be traced to the source water.... hardness.  In cities like Portland Oregon, the water generally comes from mountain lakes,  the water hardness is low, and the crud in the water is marginal.  The BSC study referenced above, experienced some plugging of the inlet filter,  they solved some of that by adding a larger external filter.

Before you make any changes to the heating system - fix the insulation and the building envelope first!!!  That will make a significant difference in comfort AND it makes a very large difference on how you size/design any heating system using the TWH.  It would be a waste of money to switch to the TWH for heat first until you've fix the insulation / air tightness... a very big waste.

In fact if you were able to add sufficient insulation and tighten the envelope - your only cost effective choice for house heat might be either a mini-split or the TWH combo.

If the TWH is designed to work for house heating - and it is capable of modulating the gas and adjusting the consumption any inefficiencies you see should be minor.  I think the Rinnai 9.8 units can drop down to about 11K or 15K BTU...smaller than most furnaces (thus the reason to consider it for very energy efficient house)... on the other end - if the house is lossy, it can crank up and run at about 180K BTU  and your gas bill (used for house heat) will not be a pleasant sight.

It looks better on paper than in real life applications.  Both Amana and Lennox came out with dual heat applicationa that would heat the home and hot water.  Eff ratings on the heating side were about 92-97% and the water heaters were in the same range.  Since the water heaters had no direct flame applied to them, they were very well insulated with little standby loss.

There are tank less water heaters that are specifically designed for heating the home as well, but the application is critical and they are very easily damaged if the next person working on them makes changes to water flow, air flow or fan speeds without knowing the specs and proper settings for return water temp.  

I put in amana systems fro 15 years but almost all are now gone.  Not because the equipment was faulty but because of other service techs ( or Homeowners) who did not know enough to service the equipment correctly.

 Also, in a combined system if your main source heat goes down you lose both heat and hot water and most consumers will not put up with that after they experienced it while waiting for parts and repairs.

I find the tank less hot water lime up.   I have a condensate pump that I pump white vinegar or such(delimeing) into the one quart heat exchange.  its 1.5 hr once a yr just to keep the tankless from over heating.  I do put a magnet on cold water side to help keep the heat exchanger clean- it helps keep the tankless from fill up with lime dust/slime.   Most all the old tankless are taken out with lots of slime/ on that little copper/SS coil.

I have some 60+ tankless heat systems out there and can be cheaper to install.  RUUD and Rheem  state, ao smith, and others make them.   Its the air handler that makes it and I have only found RUUD/RHEEM to make an air handler with coil and pump and controls all in one.   If others are are there tell me.  Most are hard to keep clean so filtering the air is key 

Nice posts Steven and Eric.  

Scale on my combi is a recurring problem.  Attaching boilers to ahu's seems to excite tinkerers, but nobody seems able to make a case there is any extra juice from all the extra squeezing.   

Heat pump on an AHU.  Electric hw. All done.  Wanna tinker? Put up solar panels with your saved time and trouble.


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