Jim Gregorich has a piece of advice for propane marketers: Get out there and promote tankless water heaters.
“It’s a piece of equipment lasting 15-20 years, so that’s a load that the gas company is going to have for a long time,” said Gregorich, vice president and general sales manager of Tempaco (Orlando, Fla.), a full-service propane and natural gas product distributor. Tankless water heaters can also serve as a gateway for propane marketers to get into a business or residence and “sell them everything else that goes along with it,” he added.
Tempaco sells propane regulators and meters, propane tanks, piping, fittings, and as Gregorich says, everything “from the source of the fuel to the burner tip.”
But tankless water heaters are Tempaco’s biggest product line, and the company sells the Rinnai and Noritz brands to residences and entities such as school districts, hospitals, naval bases, correctional institutions, and restaurants. Fertilizer plants have been a strong customer addition as of late.
Prisons in Florida have been working to reduce their energy consumption, so tankless water heaters have been a good fit. The fact that tankless water heaters only consume gas when hot water is being used is another mark in their favor, because the showers don’t run on a consistent basis. Putnam Correctional Institution (Palatka, Fla.) was the most recent prison water heater installation for Tempaco.
In some prisons, Tempaco has installed as many as six tankless water heaters. But when only a small number of prisoners are using the showers, fewer water heaters run at that time.
“If demand requires that all six run, then all six run,” explained Gregorich. “We’ve been pretty successful with the prison systems as far as saving them energy and providing them with unlimited hot water.”
Tempaco, an acronym for Temperature Accessories Company, has done well with propane products for years, but the company started out in 1946 by performing installation and service on domestic and industrial-type fueloil and gas burners, boilers, dryers, and industrial control systems.
In 1966, to concentrate on wholesaling, the company sold the boiler-burner service portion of its operations.
At that time, it became a “full-line wholesaler” headquartered in Orlando, offering air conditioning contractors’ equipment, ducting, controls, and all components necessary to make complete heating/air conditioning systems. Controls and specialties are important segments of the business. Maria Robinson, who started at Tempaco in 1979 as a temporary employee in the accounting department, is the company’s president and CEO. She has been in that position since 1998.
Prisons have become an important client sector for Tempaco, and the company has installed tankless water heaters at about six locations throughout the past few years. Gregorich emphasizes that “installing” the heaters means helping engineer the job and sizing the equipment for the customer. A propane marketer or another contractor then installs the equipment at the prison.
Safety has not been a concern for Tempaco employees when installing the water heaters for prisons. The company can usually install the equipment in a mechanical room located in an outdoor location away from the prison population.
Gregorich, who started with Tempaco in 1985 and has served mostly on the sales end during that time, believes fertilizer plants are another customer opportunity that the propane industry has left untapped. Large fertilizer plants need hot water for part of the fertilizer production process, resulting in what Gregorich says is a “huge” propane demand load. He emphasized again that when propane marketers sell tankless water heaters to a fertilizer plant, the marketers can sell regulators, valves, and piping that go along with the heaters.
Tempaco has completed several jobs that involved the installation of multiple propane tankless water heaters at a fertilizer facility. The facilities often use water that is 160°F or higher for cleaning equipment used in the fertilizer manufacturing process and to wash the trucks delivering fertilizer. A recent Tempaco fertilizer plant customer originally wanted to place a boiler at the facility, but the facility found the tankless equipment to be less expensive on the front end and more efficient, saving more money on the back end, “along with redundancy you don’t find in a single-boiler installation,” Gregorich said. So Tempaco sold six propane tankless water heaters to the business.
“They can fill this large stainless steel tank with 160° to 170° water, never run out, always have plenty of hot water, and again, it’s an excellent load for propane.”
Tempaco found yet another customer when it discovered the Salvation Army was looking for a method to provide hot water for cooking and cleaning to help displaced residents during Hurricane Katrina and other emergencies. The Salvation Army operated a semi-trailer that it converted into a rolling kitchen to provide meals. The organization needed hot water for cooking and cleaning but did not have room for a tank-style hot water heater. Working with the Salvation Army in Tampa, Tempaco arranged for the placement of a tankless water heater on the outside of the trailer, and piped hot water to the interior of the trailer.
Prisons, fertilizer plants, and the Salvation Army are just a few examples of Tempaco’s growing propane tankless water heater business. The overall real estate market in Florida is another. That business has been picking up in many areas of the state, and Gregorich said several builders have been willing to take a look at using propane products in their new construction projects.
Tempaco is working to educate builders and homeowners about the advantages of propane. A few Tempaco builder clients would likely have used electricity or natural gas in their homes if Tempaco hadn’t sold them on propane. “Builders, if they don’t hear natural gas, they don’t think propane,” he noted. “What we try to do is get involved and educate the builders…that propane companies can put in a system that is metered. We’re trying to make it an option for the builders. Just because they don’t have natural gas doesn’t mean they can’t have gas tankless water heaters. They’re not aware of propane. They’re not aware of the opportunities and how easy it is.”
The company’s marketing efforts succeeded with Innovative Home Builders in Florida. Tempaco sold tankless water heaters to Suburban Propane, and Suburban will supply the propane for the heaters at an Innovative Home Builders residential development. The developer would likely have powered the homes with electricity if not for the promotional efforts of Noritz. The tankless water heater company contacted Tempaco to supply the heaters for the development of about 250 to 350 homes.
“That’s a nice little gas load,” Gregorich said proudly. “Again, that’s just one builder/developer in Florida. I just don’t think there’s enough awareness of the advantages and opportunities with propane. You don’t see a lot of propane systems going into residential areas, and that’s where we have to educate the builders, educate the dealers, and get our trailer in front of folks so people see they can be installed in any application.”
Tempaco’s live-demo trailer makes appearances at various trade shows and events, with fully functional Rinnai tankless water heaters on one side and Noritz tankless water heaters on the other. The trailer has appeared at propane company open houses, at public events at malls, and was on display in Atlanta at the National Propane Gas Association’s Southeastern Convention in April and, more recently, at an event for a plumbing association in Florida.
“As long as we have a source of electricity and water, both sides of the trailer are fully functional, so we can show people how tankless works,” Gregorich noted. “A lot of people are very visual. They want to see it, hear it, want to know about the controller, and they have questions. It shows regulation, gas pipe, and pretty much everything that’s going to be involved when they install it. That has been extremely beneficial to us. It’s pretty much a rolling billboard for tankless water heaters.” —Daryl Lubinsky