Indirect Water Heater vs Tankless Coil

For New Hampshire homes with hydronic (boiler) heat, there are two common ways to produce domestic hot water from the boiler: a tankless coil built into the boiler itself, or a separate indirect water heater connected to the boiler. They use the same energy source but deliver very different hot water performance. For most NH homes, the indirect water heater is the better choice; tankless coils make sense in a narrower set of cases.

Here is how each works and where each fits.

Tankless coil: hot water generated on demand inside the boiler

A tankless coil (sometimes called a "side-arm coil" or "internal coil") is a heat exchanger built into a boiler. When you open a hot water faucet, cold domestic water flows through the coil and is heated by the boiler water on its way to the tap. There is no separate storage tank; the coil heats water as it passes through.

Tankless coil characteristics:

No separate hot water tank. Saves floor space.
Boiler must stay hot year-round. Even in summer when there is no space heating demand, the boiler must maintain water temperature to feed the coil. This is the largest hidden cost.
Limited flow rate. The coil can only heat a limited GPM at the required temperature rise. Two fixtures running simultaneously often means lukewarm water.
Inconsistent water temperature. Temperature can drop noticeably as demand changes.
Lower upfront cost. Coils are factory-built into the boiler.
Higher operating cost. Year-round boiler operation for hot water alone is inefficient, especially in summer.

Indirect water heater: separate storage tank, heated by the boiler

An indirect water heater is a separate insulated storage tank (typically 30 to 80 gallons) connected to the boiler through dedicated supply and return piping. The boiler heats water in the tank when needed; the tank stores hot water for use. There is no separate burner, no separate flue, and no separate gas or oil consumption beyond what the boiler uses.

Indirect water heater characteristics:

Substantial storage capacity. A 40 or 50 gallon tank handles peak demand (multiple showers, dishwasher, washing machine) without temperature drop.
Boiler can shut down between calls. In summer when there is no space heating demand, the boiler only fires occasionally to maintain the tank. Much more efficient than tankless coil operation.
Consistent water temperature. The tank stays at setpoint regardless of demand.
Higher upfront cost. The tank, piping, controls, and indirect zone valve add to the installation.
Lower operating cost. Especially in summer and shoulder seasons.
Long lifespan. Quality indirect tanks (HTP SuperStor, Bradford White, Amtrol, Phase III) often last 20+ years.

The summer cost gap

The most significant difference between the two systems shows up from May through September:

Tankless coil: the boiler must stay at operating temperature (typically 180°F+) all summer just to produce hot water. Boiler standby losses in summer can use as much fuel as a small heating month.
Indirect water heater: the boiler fires only when the tank needs reheating, which is a fraction of the runtime. Properly insulated tanks lose very little heat between calls.

For homes that use meaningful hot water year-round, the summer operating cost gap alone often justifies the indirect water heater's higher install cost within a few years.

Combi boilers as a third option

A combi boiler (combination boiler) is a wall-mounted boiler that includes a built-in tankless on-demand heat exchanger for domestic hot water. Unlike a tankless coil in a traditional boiler, a combi unit is designed from the start to be efficient at producing hot water:

Variable-speed circulator and modulating burner adjust to demand
High-efficiency condensing operation
Compact wall-mounted design
Common in smaller NH homes, condos, and tight mechanical rooms
Still has the simultaneous-demand limit of any tankless: very high peak demand (multiple showers + dishwasher) can outpace the unit

Navien is the most common combi boiler we install in NH; Viessmann, Bosch, and Lochinvar also make strong combi units.

Heat pump water heater (HPWH) as a fourth option

For homes with hydronic heat but limited hot water demand, or homes that want to start reducing fuel use, a heat pump water heater installed alongside the boiler is increasingly attractive:

Operates at very low cost (one-third to one-quarter the electricity of a standard electric tank)
The federal 25C tax credit for heat pump water heaters ended December 31, 2025; NHSaves rebates and financing are the live incentives in 2026
Decouples hot water from the boiler entirely, allowing summer boiler shutdown

An HPWH does require adequate basement or mechanical room space and ambient temperature above 50°F. Most NH basements meet these requirements.

When each one fits

Tankless coil makes sense when:

The home has very low hot water demand (small household, vacation home)
An existing tankless coil boiler is still working and replacement is not in the budget
Mechanical room space is extremely tight

Indirect water heater makes sense when:

The home is in normal residential use with multiple bathrooms or active hot water demand
The boiler is being replaced (good time to add an indirect zone)
You want consistent hot water temperature and adequate peak capacity
You want the boiler to cycle off in summer

Combi boiler makes sense when:

Mechanical room space is limited
Hot water demand is moderate
You want a single wall-mounted unit serving both space heat and domestic hot water

HPWH makes sense when:

You want to decouple DHW from the boiler for summer savings
You have adequate basement space
You want to maximize NHSaves and utility rebate eligibility

Schedule a consultation

If you are evaluating hot water options for your NH boiler home, or your existing system is not meeting your hot water demand, contact A.J. LeBlanc Heating. Serving New Hampshire families since 1928.

Frequently Asked Questions

Is an indirect water heater more efficient than a tankless coil?

Yes, especially in summer and shoulder seasons. The tankless coil requires the boiler to stay hot year-round; the indirect lets the boiler cycle off between calls. The annual operating cost gap is typically substantial.

How long does an indirect water heater last?

Quality indirect tanks (HTP SuperStor, Bradford White, Amtrol) often last 20+ years. The tank has no burner, no flue, and minimal moving parts, so it tends to outlast separate gas water heaters.

Can I switch from a tankless coil to an indirect water heater?

Yes. Adding an indirect tank is straightforward when the boiler is being serviced or replaced. The boiler needs a dedicated zone for the indirect (zone valve, circulator, and an aquastat or smart control).

What size indirect tank do I need?

For a typical NH household, 40 to 50 gallons is the most common size. Larger families or homes with high-flow shower heads or large soaking tubs may need a 60 to 80 gallon tank.

Do indirect water heaters work with all boilers?

Yes, with proper installation. The boiler needs a dedicated zone, and the indirect tank should be matched to the boiler's BTU output. We size the tank and zone during the install consultation.