Electrified water heating is, well, heating up. The affordability and accessibility of gas as a fuel source has long been a barrier to widespread adoption of electric water heating solutions. However, evolving federal efficiency standards and regional legislation are changing the way water heaters are both manufactured and installed.

For example, data from the AHRI for 2024 product shipments show a sales increase of 3% for residential electric storage water heaters, resulting in the highest ever total sales per year and allowing the market to surpass the 5-million-unit mark for the first time.

However, the multifamily market is one area where the path to widespread electrification in water heating is still murky. Let’s break down what plumbing professionals need to know about how to choose from the available technology out there, how to counsel multifamily customers on electrified water heating and the best practices for smooth installation and servicing.

Identifying the right solution

The modern contractor has plenty of electric water heating solutions, each posing unique strengths and limitations depending on the environment in which they’re installed. It’s best to avoid prescribing one ideal solution to each multifamily project you take on, but rather, evaluate the capabilities of each multifamily space on a case-by-case basis, taking factors such as room and climate into account.

For instance, we know hybrid electric units can heat water up to three to four times more efficiently than traditional electric units by shifting energy that already exists around the unit into the water tank, instead of generating net-new energy to conduct the heating process. This allows residents to reduce their carbon footprint at no sacrifice to their comfort.

The above qualities have helped heat pump water heater adoption soar in single-family settings. However, in multifamily settings, space limitations remain a key roadblock. Manufacturers recommend installing heat pump water heaters in areas that measure out to at least 700 cubic feet, both to allow room for the usually-large water tanks they come with and to allow proper space for ventilation necessary for the heat pump effect of extracting heat from the surrounding air to go off without a hitch.

Electric tankless water units are another solution that offers a better fit for compact settings, slotting into small spaces such as under-sink cabinets and tight corners with ease. However, a whole-house electric tankless solution requires a great deal of power to operate — often necessitating more amperage than is available in a multifamily space.

As a workaround, electric tankless units are more often installed as point-of-use solutions powering a few key functions in the bathroom or kitchen. Multifamily operation of electric tankless units is most feasible in warmer regions where the groundwater is less cold, such as in Florida, for example, as units don’t have to work as hard to heat water and can therefore use less power in the process.

Original electric water heater tanks remain the most popular whole-home electric water heating solution. These units rely on the same power as 30A and 240V heat pump water heaters, but do not require the same specifications around spacing and ventilation.

Starting in 2029, the Department of Energy will mandate that most residential electric water heaters 35 gallons or larger must use high-efficiency heat pump technology. This means manufacturers will need to find an alternative to standard electric water heaters that fits the multifamily space. Split heat pump water heaters are emerging as that solution of choice, requiring the same amount of space as a standard electric unit on the inside and moving the heat exchange process to an outdoor unit.

Selling multifamily electrification

Manufacturers are continuing to innovate solutions capable of improving the possibilities for electrifying water heating in multifamily spaces. Over time, making room for hybrid electric tanks or powering electric tankless units will grow far less difficult. But in the meantime, what are the existing benefits to building owners who make the switch to electric, and how can contractors help them understand these benefits?

For starters, building owners who embrace electrification on any front stand to benefit from increasing demand from prospective residents. As consumers embrace electrification in other parts of their lives, such as with the vehicles they drive, they’re looking to reduce their carbon footprint across the board. Fifty percent of Realtors surveyed in a 2024 study from the National Association of Realtors said they had clients interested in sustainability. Electric water heating is one feature that can help one multifamily residence stand out from the others with this audience.

It’s also crucial that contractors brush up on the latest in electric water heating capabilities so they can readily debunk any misconceptions that may be giving customers cold feet. For instance, a common assumption is that heat pump water heaters are noisy due to their use of a fan. However, modern units of this type are much quieter. The Bosch GreenTronic 7000 T Hybrid Electric Water Heater, for example, operates as quietly as a refrigerator at 49 dB(A).

While federal incentives to embrace electrification grew more scarce when Inflation Reduction Act tax credits ended last December, don’t forget plenty of incentives (https://tinyurl.com/3r7spd72) are still available on a state-by-state basis. Some states, such as Michigan, Indiana, North Carolina and Georgia, have approved the Department of Energy’s Home Efficiency Rebate and Home Electrification and Appliance Rebate programs, which both aim to increase energy efficiency and decrease utility costs.

While it’s a road less traveled, electric water heating in multifamily is an efficient, innovative, forward-looking solution that promises a variety of benefits. As with all solutions aiming for widespread adoption, education is the first step.

Tips for Optimized Installation and Service

Let’s talk best practices for installing and servicing electric solutions in multifamily buildings:

First things first, gauge the electrical capacity of the building before installing or even choosing equipment. Ensure the building’s electrical panel can withstand the voltage needed for the unit you’re installing and make sure there’s room for the breaker.

Consider whether a point-of-use electric water heater or two would be more efficient for a given space than a whole home unit would be.

If you opt for a central unit, make sure pipes are insulated properly to avoid water losing heat on its way to units.

Estimate what peak hot water demand in a given space or building will look like, and size the unit’s recovery rate to that maximum.

Install heat pump water heaters in areas with at least 700 cubic feet of space to allow the ventilation necessary for the unit to draw heat from the surrounding air. If that amount of space is unavailable, add ducting or louver doors to the area to provide sufficient airflow.

No matter the unit you’re installing, save your future self the headache and make it easy to service by avoiding cramped corners and allowing enough clearance for replacing and repairing internal elements.

Victoria Otto is a senior product manager at Bosch Home Comfort Group, where she has spent four years and counting creating hot water and heating solutions for the North American market.