Closeup of a just-turned-on water faucet.

Empty the tank: A smarter water heater with a smaller footprint

Water heaters are a major area where environmental friendliness and human comfort don’t jive seamlessly. They make it easier to do tasks like showering and cooking, but standard versions use a whole lot of energy to keep water warm 24/7. In fact, water heaters are the second highest energy user in the average U.S. home, according to the federal government’s Energy Star website.

Energy-efficient versions reduce climate impact. But on-demand, or tankless, water heaters are even better. The U.S. Department of Energy estimates that tankless water heaters are 24% to 34% more energy efficient for a home that uses a daily average of 41 gallons or less of hot water. 

So how does the technology work? When a hot water tap is turned on, cold water runs through a pipe and is heated directly with a gas burner or electric element. It delivers a constant supply of hot water without having to wait for a holding tank to fill and heat the water.

Sri Deivasigamini
Intellihot CEO Sridhar Deivasigamani

Finding solutions to the wasted energy and water issues is a key mission for Galesburg, Illinois-based tankless water heater designer and manufacturer Intellihot, said founder and CEO Sridhar Deivasigamani. “We think about saving water, saving energy, and saving space all at the same time,” he said.

The startup launched in 2009 and “looks at this from a different lens” than other water technology companies, Deivasigamani said. He credits the different backgrounds of Intellihot’s employees — from computer scientists to robotics developers — compared with other water tech companies. The diversity of expertise helps produce “technology better suited for customers than people have had for many years,” he said. 

The technology

Intellihot’s tankless water heaters are smart devices that can connect to the internet to allow remote access. Users can control and monitor the units through a mobile app. Recent versions come with touchscreens. The connected systems are especially beneficial for commercial buildings that need to oversee multiple water heaters, Deivasigamani said.

An Intellihot tankless water heater.
An Intellihot tankless water heater. (Photo credit: Intellihot / Courtesy)

“We don’t think of this space as just water heating. For example, we have technology that mimics Alexa,” Deivasigamani said. “In a sense, we are a technology company that is making water heaters and smart devices.”

Other unique aspects are that the products heat water without accumulating harmful bacteria, which is a nagging problem for on-demand water heaters. They are also entirely designed and built in the United States.

Tackling a tankless sticking point

A leading reason more people don’t purchase on-demand water heaters is the higher up-front cost. But advocates say costs over the life of a tankless water heater are comparable to or lower than the cost of a traditional water heater. The DOE says tankless water heaters usually last longer than modern tank versions, and they consume less electricity.

“Sometimes people think of a green technology or product as one that costs more, is cumbersome to install, and probably doesn’t work great. Our company is actually doing the exact opposite. Our technology can cost less to own and operate, and we provide comfort,” Deivasigamani said. “The transformation that needs to happen is a change in mindset and being able to move away from things we have historically done over the last 100 years.”

Keeping it green

Intellihot strives to keep climate action at the forefront of its operations. “This cannot be just another app that simply makes your lifestyle a little better. This is an extended question of the planet’s survival,” Deivasigamani said. 

Intellihot is one of Clean Energy Trust’s portfolio companies. Meeting and collaborating with other environmentally-focused tech developers at trust events has been beneficial. “Each of us is trying to solve one piece of the puzzle. The puzzle is really large, so bouncing ideas off of one another definitely helps,” Deivasigamani said.

What’s next

“We see that there will be a convergence…. between energy efficiency, health and safety, net zero, and decarbonization,” Deivasigamani said. “There’s a strong focus right now on electrification and hydrogen. We envision we will be playing in all those fields.”

Deivasigamani said he grew up in a small town and loves them, and Galesburg has been a great location for growing Intellihot. However, access to capital is difficult because “central Illinois is not Silicon Valley. You just don’t have people writing big checks or taking big risks,” he said. “But we are now to a stage where the company has been able to reach beyond central Illinois and attract investors.”

Intellihot’s plans to open a new headquarters in Chicago were put on hold because of the pandemic, but they are now ready to advance. Deivasigamani anticipates that additional exposure will help Intellihot’s rapid expansion continue. In addition, he predicts increased deal flow for environmentally focused businesses like Intellihot thanks to the recent increased attention to climate action. “You can see the trend already. … There is a lot of capital that I think will come,” he said.

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