Innovative Hydronic Space Heating Unit Provides Competitive Response To Electric Heat

With 7 million all-electric homes beyond the gas mains, electric heat pumps have outpaced propane as the primary heat source across a large swath of the energy marketplace. The challenge propane displacement poses to the industry is being addressed by a group of forward-thinking propane marketers, industry organizations, and Rinnai America Corp. The team has developed a competitive response to grow propane gallons with the introduction of an innovative hydronic space heating solution that has the ease of one-button simplicity.

The presentation “Growing Residential Gallons with Hydronic Space Heating” at the 2018 NPGA Southeastern Convention & International Propane Expo featured speakers Randy Doyle, CFO of Blossman Gas (Ocean Springs, Miss.); Armistead Mauck, owner and vice president of Cherry Energy (Kinston, N.C.); and Mike Peacock, energy sales director at Rinnai America Corp. (Peachtree City, Ga.). They shared their experiences in the Hydronic Installation Pilot Project.

The program has received strong support from the Propane Education & Research Council (PERC), the North Carolina Propane Gas Association (NCPGA), the North Carolina Propane Education & Research Foundation, Rinnai America Corp., and several propane marketers, including Blossman Gas and Cherry Energy.

Doyle began the presentation by talking about how the propane industry needs to compete with all-electric homes and gain back gallons that have been lost. The group sought to develop an application that gives the propane industry a competitive response to electric heat, so that it can go nose-to-nose with electricity on a cost and comfort basis. This past winter’s cold temperature reminded the homeowner that electric heat lacks comfort. The goal is to replace the electric radiant heat strips used to supplement electric heat pumps with a more comfortable, cost-saving, propane-fueled heat source.

During the pilot project’s research and development phase, industry partner Rinnai worked closely with the group to develop the prototype of a hydronic space-heating unit. Hydronic (circulating water) systems have been around for years, but the new single-unit system developed is an “out-of-the-box solution” powered by a tankless water heater. By running a hot water line from the water heater to the air handler, and back to the water inlet of the tankless unit, a small pump can circulate hot water to coils inside the air handler to produce warm, moist air to heat the home. “Using hot water from the tankless water heater makes the hydronic unit an ideal supplemental heat source to heat pumps, or to heat an entire home,” explained Peacock.

“The analogy is like running hot water through a car radiator,” said Mauck, describing how the tankless water heater can serve as an anchor appliance, delivering unlimited hot water while simultaneously supplying a steady, comfortable heat source to the home. “And, depending on the winter, one hydronic unit can typically add between 100 to 300 additional propane gallons per heating season.”

In 2016, phase one of the pilot program began in North Carolina, with the strong support of Blossman Gas & Appliance, one of the largest independently owned propane companies in the country. Doyle, who has worked closely with PERC and NCPGA on the project, told the Southeastern audience, “Residential propane is our bread and butter and we need to do everything we can to grow residential gallons. The goal of this project has been to develop, test, confirm the benefits, address potential challenges, and ultimately simplify the installation process of the hydronic heating unit.”

Phase one of the program tested 11 hydronic units in North Carolina over the course of two heating seasons. Ten of the sites had heat pumps with supplemental electric heat strips. The eleventh site had an oil furnace, but was scheduled to be converted to a heat pump. The objective was to create as many unique installation situations as possible, and the group worked on a number of different scenarios.

Mauck, owner and vice president of Cherry Energy, told the audience that it was a conversation with NCPGA that persuaded him to participate in the program. “Our company started in the oil and gas business over 80 years ago. As we watched that side of the business slowly decline, we decided to get into the propane business. It has served us well and I don’t want to see the same thing happen with propane. I believe this hydronic heating system will give propane a competitive edge.”

Mauck continued, “Across the southern half of the United States, southeast all the way to California, very few forced air furnaces get installed. In these warmer climates, the high-efficiency heat pump has been the popular choice for heat. But, as outdoor temperatures drop, the comfort level drops. Even at 70 degrees the air from a heat pump feels cold. But when a hydronic system kicks in, within five minutes the home feels more comfortable. Electric heat strip units have been the popular choice to supplement heat. But, the hydronic heating unit offers many advantages over heat pumps and electric heat strips in terms of cost, comfort, efficiency, and aesthetics.”

Doyle agreed, adding, “Our hydronic unit produces a warmer, more comfortable, heat. Plus, it is more efficient and can be cost-effective. Its versatility can serve two purposes: as the primary heat source for the entire home, or as supplemental backup heat for homes with electric heat pumps.” It was also noted that the thermostat doesn’t kick off and on because the warm air produced by the hydronic unit maintains a more constant temperature.

Mauck joked, “Heating with electric strips is like heating your home with a giant toaster oven. The heat smells like burnt toast and produces a dry heat that’s damaging to skin.”

The pilot program has had its challenges along the way, including installation obstacles like identifying the appropriately sized water pumps for tankless water heaters, and the coils needed for various installation specifications. But, the team has solved the technical integration of the tankless water heater and hydronic space heating application to achieve its goal of one-button simplicity. Mauck compared the system to the ease of using an iPhone, noting, “We wanted to do with one button what Apple did with the iPhone. We know the further you get away from one, the more complicated things become.” Documents to guide technical specifications have also been produced.

Phase two of the pilot program recently got underway on a larger scale with the installation of several hydronic units in homes outside of North Carolina. The Hydronic Installation Project will continue to identify and trouble-shoot any problems that arise during this phase of the project. And, propane industry advocate Rinnai America Corp. has played a major role in the process. The group is continuing to work on simplification of installation, and ultimately the goal is the commercialization of the hydronic product to give propane marketers a competitive option to penetrate the electric home heat market.

“Rinnai is committed to supporting this industry. With 30% of global sales coming from North America, we intend to help the industry grow and will continue to partner in product innovation,” said Peacock. He announced during the convention that Rinnai had just celebrated the assembly of its first American-made tankless water heater at its manufacturing facility in Peachtree City, Ga.

Peacock pointed out that the states reporting the highest appliance sales are states that offer rebates. “Rebates really do make an impact,” he said. He also said Rinnai had extended its rebate program of up to $100 through Dec. 31, 2018. In some states, rebates as high as an additional $500 are available from state propane associations.

Hydronic applications are gaining popularity in the Northeast, and the Southern and Southeast regions of the U.S., which provide ideal climates for the application. But, there are still hydronic hurdles to cross, including lack of awareness among homeowners, marketers, and contractors. The need for trained gas line installers throughout the country also is an issue. “The shortage of installers has raised the cost of bringing propane to homes across the country,” said Peacock.

However, the hard work and success of the pilot program is paying off with the introduction of this hydronic heating unit now in homes across the country. A new revenue stream for hundreds of propane marketers in existing homes, as well as new builds, looks more promising by the day. —Andrea Young