When Steve McCoy’s furnace reached the end of its life, he didn’t want to simply update it with a new one. Instead, McCoy wanted to make his home a showcase for a rapidly advancing technology: hydronic forced-air heating powered by a propane tankless water heater.

As vice president of business development for propane provider Blossman Gas, McCoy sees this technology as not only a milestone for the propane industry but also a major opportunity for construction pros to improve comfort, efficiency, and space savings in new construction and retrofit scenarios.

“What inspires me about the technology first and foremost is the comfort,” McCoy says. “In the gas industry, as we’re competing against electric for market share, we highlight the comfort that gas provides versus electric and, more specifically, comfort as it relates to register temperature.”

Whereas heat pumps deliver register temperatures that can feel cool at around 95 degrees Fahrenheit, below the human body temperature, gas furnaces deliver heated air at around 140 degrees. And air handlers with a hydronic heating loop can reach a cozy level of about 130 degrees. In the series of videos on this page, McCoy and Blossman Gas regional service pack specialist Damian Kelley provide an overview of how this innovative technology works and how builders and contractors can optimize their installation.

How to heat with tankless

Hydronic air handlers, sometimes referred to as water furnaces, provide space heating by using a hydronic heating loop to heat air as the blower moves it into the home. Tankless water heater manufacturers such as Rinnai have recently launched air-handling units and controls designed specifically to work with tankless units, which provide several advantages. Tankless water heaters offer reliability and thermal efficiency, with condensing units achieving efficiency levels up to 94 percent. And because they heat water continuously on demand, there’s no need to worry about running out of domestic hot water.

In furnace replacement scenarios such as McCoy’s, installing the tankless unit can be extremely straightforward because the furnace’s gas line and ventilation can be reused. “For an installer of the system, it could save up to 2–3 hours of time installing it by not having to do your venting or additional gas lines,” says Kelley, who performed McCoy’s installation.

The tankless water heater also allows for a very compact installation, creating space savings by eliminating the need for a separate electric or gas storage tank water heater. “Approximately 200 cubic feet of space was saved in my situation,” McCoy says. “So that same 200 cubic feet could be used in new construction to add a closet or simply reduce the size of the structure. With building material prices escalating like they are, it could save some money in new construction.”

Cost savings vs. electric

The hydronic heating system can also provide energy cost savings compared with a heat pump system by eliminating the use of emergency electric heat strips when the temperatures dip. And in McCoy’s installation, he found energy cost savings compared with the previous furnace system. Normalized to degree days of heating, the new system reduced propane use from 0.28 gallons per degree day to 0.21.

“That’s a significant cost savings, especially in light of it being a COVID winter, when more people were in the home,” McCoy says. “I just found that very remarkable. And I’m sure some of that savings has to do with the tankless water heater compared to the tank-type water heater I had, but certainly not all of that.”

McCoy’s Fawn Lake community, which includes more than 1,000 homes about 20 miles west of Fredericksburg, Virginia, demonstrates the value that propane can bring to a community even 20 years after it was built. About 99 percent of the homes in the community use propane for heating, since it was built outside of the natural gas lines. Today, Fawn Lake homes and other communities without natural gas can use propane to fuel popular gas upgrades like tankless water heaters.

Optimizing hydronic forced-air installations

Contractors have several ways they can enhance comfort and optimize their installations for improved performance. In the video, Kelley covers a few topics:

  • Tankless location. Installing the tankless water heater close to the air handler helps avoid thermal loss on the plumbing lines as the hot water is delivered to the hydronic loop.
  • Domestic priority switch. When the house has high demand for domestic hot water to the faucets or shower, a priority switch can shut down the air handler to prioritize domestic hot-water demand.
  • Dialing in comfort. Technicians can control the air speed across the coil, the output temperature of the tankless water heater, the airflow through the home’s ductwork, and the flow rate of the hot water to ensure the system is running at the most comfortable level for the customers.

“This technology has an enormous amount of potential,” McCoy says. “It’s going to take those of us in the industry, as well as HVAC contractors, to go and provide data and real case studies to builders so that they will try the technology. After doing so, I’m confident that they’ll feel the same way that I feel: that this is a wonderful new technology for our industry and will result in a happier homebuyer.”