Close this search box.
Tankless Water Heater Sizing Formula

Guide to Tankless Water Heater Sizing For Businesses

Engineers Guide to hot water

Tankless water heater sizing for businesses does not need to be a complicated or ambiguous procedure. Even for those without an engineering background.

In this tankless water heater sizing guide, we will summarize the traditional tankless water heater sizing methodology. We will present the formula and break it down in a succinct manner so that it can be understood by those without a technical background.

Followed by that, we will discuss a major flaw with this current tankless water heater sizing methodology.  We will also be introducing a better way to size tankless water heaters that tackle this flaw by using historical data in an instant, online, and guaranteed setup.  

Let’s begin.

Traditional Tankless Water Heater Sizing Method

Traditionally, tankless water heaters are sized for a property using the formula provided below. Don’t worry – this equation may look intimidating, but it is very straightforward to understand for non-technical personnel as well. We will walk you through the formula, explaining what every term means, and how you can begin collecting the required information for each component of the equation.

Factor 1: Temperature Rise (ΔT)

Temperature rise is the difference between the temperature of cold water entering your property and the temperature of hot water exiting your fixtures. This is how you calculate it:

Temperature Rise (°F) = Outlet Water Temperature (°F) – Incoming Water Temperature (°F)

You decide what the outlet temperature is set at. Read this article to understand the considerations for setting your water heater’s outlet temperature to maximize savings or performance.

The incoming temperature is based on your geographic region. You can find your region’s incoming water temperature via your zip code here.

Temperature rise matters for tankless water heater sizing as it will determine “how hot” your tankless water heating system would need to heat water by. Different properties get cold water at different temperatures. Different properties also set different outlet temperatures according to their unique requirements.

Factor 2: Flow Rate

This is the amount of water flowing through a fixture in a particular time frame. For example, 5 gpm means 5 gallons of water moving through a fixture in one minute. Every fixture has a different flow rate. Think of the difference in “water pressure” when using a shower versus a tap.  

Flow rate matters because it determines “how much” hot water your tankless water heater would need to deliver in a given timeframe.


Remember – tankless water heaters heat water “on demand”. Hence, they need to be compared in terms of how much hot water they can heat “on demand” in a single minute.

The flow rate for a particular fixture can usually be found in the fixture’s official manual or any literature provided by the fixture’s manufacturer. In most cases, you should be able to find this information online if you know the fixture’s product name and manufacturer. Common fixtures like showers may also have a common, standard flow rate for all products in the category.

You must have noticed that the traditional sizing formula needs “peak” flow rate. What does peak mean? How to calculate “peak” flow rate for your property? Let’s look at Factor 3 to answer this.

Factor 3: Hot Water Consumption Patterns and Peak Flow Rate

This is a determination of how your property consumes hot water annually. You can combine your understanding of your property’s hot water consumption patterns and flow rate (factor 2) to determine the “peak flow rate” component of the equation.

You need to know the maximum amount of hot water that your property might consume in a particular timeframe (usually a minute). This matters for sizing a tankless water heater since your selected unit(s) should be able to provide you with enough hot water in your busiest period.

The logic is this: if your tankless water heater can satisfy your busiest hot water demand, it will be able to meet your average non-peak hot water demand as well.

How do you find out the maximum amount of hot water your property consumes? This is where the traditional tankless sizing method falters. For this step, most properties typically rely on some guesswork in the following way:

  1. Typically, you would guess the hot water fixtures that your property might operate in its busiest period. For example, you might estimate that your restaurant would probably have its commercial dishwasher, its wash fountains, and lavatory sink taps running during your busiest hot water demand period.
  2. Once you have this information, jot down all the fixtures and note the fixtures’ flow rates (Factor 2).
  3. Then, sum up all the flow rates for these fixtures. The sum is the “peak flow rate.

Peak flow rate determines the maximum volume of hot water that your property would need in a single minute. So, now you know “how much” (Factor 2 and 3) hot water a tankless water heater would need to deliver to your property, and “how hot” (Factor 1) it would need to heat the water. How to use this information to select the right tankless water heater? This is where Factor 4 – Heat Output comes in.

Factor 4: Heat Output (BTUs/hr.)

This is the heat energy that a tankless water heater can deliver. This is what is measured in BTUs/hr. This matters for sizing as this is the final metric that you would calculate. This is the metric that you would use to compare “how much” and “how hot” different tankless water heaters can heat water so you can pick the most appropriate one for your property.

One BTU is equivalent to the heat energy required to raise the temperature of 1 pound of water by one degree Fahrenheit.

tankless water heater sizing btus

Hence, the heating output is a metric that can answer both: “how much” hot water a tankless water heater needs to deliver, and “how hot” it needs to heat the water by.

After you have collected all the information outlined in Factors 1-3, you would use the equation to determine the heating output you need in BTUs/hr. This value will become your minimum. Hence, you would pick a tankless water heating system that can deliver this minimum heating output at the very least.

The Major Flaw With Traditional Tankless Water Heater Sizing

The traditional tankless sizing approach that we just discussed has a major flaw that drains your property’s resources. It relies on property owners determining their “peak” hot water demand – basically, considering the worst case scenario.

Without the resources to hire an engineering firm, most commercial property owners would simply guess their peak hot water demand – frequently summing up ALL their hot water fixtures. In reality though, a property’s peak hot water demand is much lower than that.

Think about it. Let’s say you own a quick-service restaurant and guessed your peak hot water demand by summing up all your hot water fixtures. This would assume that your commercial washers, wash fountains, and bathroom sink taps would be running at the same time continuously. In reality, this would never happen.

Suppose you operate your commercial washers after service hours typically. In this case, sink taps in your restaurant’s bathroom would likely not be running and needing hot water. Moreover, fixtures like taps and showers are not frequently operated at their hottest setting. However, the traditional sizing method assumes that they would be.

The Better Way to Size a Tankless Water Heaters For Businesses

Because of the above flaw with traditional tankless sizing, and the fact that Intellihot’s core mission revolves around energy efficiency, we set out to create our own tankless water heater sizing tool. Here is why we think our online tankless sizing tool for commercial properties is better than the traditional approach: 

tankless water heater sizing calculator real world data

Uses Real World Data. No Guesswork

Our focus on commercial water heating has provided us access to valuable data about hot water consumption in thousands of properties of varying types and in varying geographies. Our sizing calculator leverages this data to accurately predict any property's peak hot water demand based on actual data more accurately.

Tankless Water Heater Sizing Calculator Multiple Choices

Provides Multiple Options

Our tankless sizing tool provides multiple options instantly to make an informed decision. You can choose between a system that is the most cost-effective, one that is redundant, or one that balances both.

Tankless Water Heater Sizing Calculator configuration requirements

Detailed Installation Instructions

Our tankless sizing calculator provides detailed installation instructions with piping diagrams so you can get a new tankless water heating system running in no time.

Building Manager Tips Physical

Guaranteed Results. Instantly.

We are so confident in our tool's accuracy, that we guarantee its results. If our recommendations fail to match your property's hot water demand, we will pay for any additional equipment charges.

Need More Assistance?

Download this ebook to:
  • Learn the difference between Gas and Electric Tankless Water Heaters
  • Understand the Four Factors that Affect Tankless Water Heater Sizing
  • Discover How Commercial Tankless Water Heaters Differ From Residential Units
  • See A Cost Savings Example of Tank vs Tankless Systems
Tankless Commercial Buyers Guide