Indirect Hot Water Heaters 
Buying Tips

Indirect water heater

Explore indirect hot water heaters for domestic hot water heating; search the types, how it compares to other systems, see the advantages and what benefits they can bring to your home.

An indirect-fired system uses the furnace or boiler-based space heating for domestic hot water heating inside the insulated storage tank, while fluids are kept separate.

Thanks to the insulated storage tank, inside energy is kept longer while the furnace or boiler operates less often.

An indirect system permits hot water production year-round in great quantities and at a reasonable cost. The indirect system is tied into your home's space heating system, and it will heat the water even if there is no need for space heating.

Continuous use of the boiler for heating domestic water is perfect for the system as it prevents costly deterioration, which occurs when the boiler is idle for long periods.

During the winter, when the indirect water heater is used for home heating, only a small fraction of the heat is used for domestic water heating.

When space heating is not needed in the summer, all heat is used for hot water preparation.

Indirect hot water heater systems can heat water using natural gas, propane, electricity, oil, or solar energy. Heat pumps, gas, or oil-fired burners are used as the source of the heat.


The most typical indirect system is a coil inside the tank, so the recovery rates are getting very high with the large surface area.

Two types of copper tube coiled systems are used: internal and external submerged.

The internal submerged is screwed into or bolted onto the boiler.

The external submerged type consists of the copper tubes encased in steel or cast iron casing. The external heat exchanger requires two pumps for water and heat transfer.

Indirect fired heaters can be designed, constructed, and purchased as integrated systems, incorporating the boiler or furnace as the heat source, storage tank, and controls into one system; or as separate components.

The water inside the boiler circulates through the heat exchanger using the pump when there is a call from the thermostat. The heat exchanger coils located inside the storage tank heat the surrounding water without mixing the boiler water with the potable water supply. Another way to heat is to use a combination of the insulated storage tank and external heat exchanger.

The boiler should be configured to shut down or keep the heat on a lower level when there is no call for space or hot water heating.

Tips: All of the piping between the boiler, heat exchanger, and a heater should be insulated to minimize heat loss.

A furnace-based indirect hot water heater system is less common, and water in a heat exchanger coil circulates through the furnace to be heated, then through the storage tank.

Indirect-fired systems are also called combined systems whose heat source is used for both water and space heating. The efficiency is indicated by the combined appliance efficiency rating or CAE. Higher efficiency comes with a higher CAE rating and can be found from 0.59 to 0.90. The recommendation is to look for systems that can produce efficiency of 0.85 or higher.

What is great with this indirect type of heating is that it provides one of the least expensive heating methods when combined with high-efficient boilers. These indirect systems are more efficient than if used separately, as they eliminate the extra standby loss of another tank or unit.

The price for these combined and integrated heating systems costs more than buying a furnace and storage tank separately. On the other side installation and maintenance cost less as the system is very simple. One of the important parts of the heat transfer is the pump that circulates hot water between the heat exchanger and storage tank.

Another type of indirect fired heater is a tank-within-a-tank design, like Weil McLain indirect water heaters, which has a corrugated stainless steel inner tank and steel outer tank. This design produces twice the peak flow of a tankless coil, at least 50% more than a comparably sized direct heater, and three times as much as an electric unit.


  • The greatest advantage of the gas-fired indirect water heaters is the significant reduction of flue losses.
  • These units are more efficient; standby heat loss is reduced when compared to the standard tank type.
  • Less maintenance - no additional burners to maintain.
  • Lower cost - no additional venting required or fuel lines to run.
  • Better performance - more hot water is available with quicker recoveries.
  • Easy to size and install.

Indirect hot water heaters generally have higher recovery rates than the typical tank-type heater as they use the BTU output from the boiler as the heat source.

On the systems with no coils, Weil McLain for example, large self-cleaning waterways, are used on systems with no coils to prevent liming and efficiency deterioration.

As said before, integrated combined heating systems are using the same heat source for both space and water heating. One of the advantages of the integral systems over separate unit systems is the presence of only one combustion device. This reduces the risk of backdrafting, regular service needs and allows only one venting system.

Storage tanks used in indirect-fired heating systems are usually built of stainless steel, and with the absence of direct flame or combustion, thermal stress is significantly reduced, making them very durable with a long lifespan. Some manufacturers are providing a lifetime warranty.

The most typical capacity of the indirect hot water heater tanks is about 40 gallons. Capacity is an important element when buying a new indirect water heating system and the recovery rate. The actual recovery rate will depend on the BTU input of the unit that feeds the heat exchanger.

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