Kent Kriegshauser for Midwest Energy News

Sridhar Deivasigamani, founder of Intellihot, with a circuit board from a tankless hot water heater.

Illinois entrepreneurs rethink water heaters to cut energy use

Galesburg, Illinois is a long way from Silicon Valley. There are no Google or Apple offices in the west-central Illinois city, population 32,000, but it is home to at least one scrappy tech firm reinventing how we use an everyday product.

Intellihot is the brainchild of Sridhar Deivasigamani, who in 2005 came home from a long trip to find a burst water heater had flooded his basement. Deivasigamani was up late into the night cleaning up the damage, which gave him plenty of time to reflect on the shortcomings of how homes and businesses have long consumed hot water — namely, by heating it in large tanks 24 hours a day, seven days a week.

“I [came] to realize what kind of awful technology we have,” Deivasigamani recalls of standing in ankle-deep water, “and how it’s been the same for almost 100 years.”

Perhaps there was a better way. At the time, Deivasigamani was an engineer at Caterpillar, the construction machinery company headquartered in nearby Peoria. He recruited Sivaprasad Akasam, a co-worker and self-professed “Lego master” and “robotics guru,” to start thinking about building a better water heater.

In 2009, Intellihot was born, and it began designing, manufacturing and assembling tankless water heaters for homes, businesses and industry.

Intellihot wasn’t the first and certainly isn’t the only firm to design so-called “on-demand” water heaters, or systems that heat water as it is used instead of keeping it warm on standby. But Deivasigamani and Aakasam drew on their backgrounds in robotics and automation to build “learning” into their water heater. Intellihot’s Energy Star-rated residential water heater will log occupants’ water usage and anticipate needs based on prior behavior.

That puts Intellihot in a growing field of companies redesigning household appliances for a web-enabled, 21st-century digital infrastructure. Nest built a thermostat that “learns”; Uber, Tesla and others are building cars that drive themselves. Intellihot may not have the sexy marketing campaigns and unorthodox workspaces of its Bay-area kinsfolk, but the company has the potential to be every bit as impactful.

“We reimagined the whole process,” Deivasigamani says of approaching water heating as a non-expert. “Typically people think of [water heaters] as a device [whose] only job is to heat water. But we think of it as an energy device that can heat water, that can deliver water, that can learn your patterns … and then, as a side, it could also heat your home.”

Cutting home energy use

Water heating is typically a home’s second biggest energy drain, accounting for about 18 percent of a home’s energy use, according to the U.S. Department of Energy. In 2010, the heating of water in residential buildings emitted 170.8 million metric tons of carbon dioxide emissions, according to DOE, making up 14 percent of a home’s overall CO2 emissions.

Sridhar Deivasigamani, founder of Intellihot, stands with model IQ1001. One of these units can produce enough hot water to supply 100 hotel rooms.

Kent Kriegshauser for Midwest Energy News

Sridhar Deivasigamani, founder of Intellihot, stands with model IQ1001. One of these units can produce enough hot water to supply 100 hotel rooms.

Intellihot’s products aim to lower these figures all while making water heaters more compact and easier to maintain. The company’s “Combi” units — a dual water- and space-heater that can heat water for up to four showers simultaneously and provide 125,000 BTUs of home heating — take up 80 percent less space than a traditional water heater and have a combustion efficiency of 98 percent, according to the company.

Intellihot has backing from Hyde Park Angels and Energy Foundry, both Chicago-based investment companies. In 2014, the company took home $400,000 when it won first place in the Illinois Clean Energy Fund Awards. The company has supplied products throughout the U.S., Canada and Mexico, and it has done it all without leaving its headquarters on the prairie. Intellihot is one of three companies working in Galesburg’s Sustainable Business Center, a business incubator aimed at attracting environmentally conscious companies to the city.

“It’s a nice, quiet, Midwestern town,” Deivasigamani says of Galesburg. He says it has a good pool of talent owing to it once being home to a Maytag plant and other manufacturing sites.

Intellihot’s products are built on-site in Galesburg, making it the only tankless water heater built in the United States, according to the company. Intellihot’s commitment to west-central Illinois is a rare antidote to today’s hand-wringing over the decline of manufacturing in rural America.

A ‘seamless’ transition

Perhaps Intellihot’s greatest challenge to date was in supplying on-demand water heating technology for 340 on the Park, a 68-story high-rise in Chicago at the northern edge of Millennium Park. The building was completed in 2007 and equipped with two traditional, tank-type water heaters located near the top of the building.

But within several years, the heaters were regularly in need of repairs and replacement was a daunting and expensive enterprise. It some cases, it meant using a helicopter to air-lift equipment to the boiler room.

Amy Eickhoff, the building manager, admits she was a bit skeptical when she first considered Intellihot as a replacement. The technology had never been used in a high-rise application before and it was unclear whether it could overcome the unique demands of circulating water through 68 floors of luxury condos.

But after her vendors were given a demonstration of the technology — and after Intellihot offered a generous guarantee that their technology would work — Eickhoff gave them the green light.

Over one night in March 2015, four Intellihot iQ 1001 units — which look like simple, sleek data-center terminals — were installed in 340 on the Park.

“The transition for us was seamless … and no one noticed a thing,” Eickhoff recalls. “It’s been great for us,” she says, and the cost savings from not having to keep stored water constantly heated has been “significant.”

The new system eliminates about 2,000 gallons of storage in the building and saves 27 percent in gas bills each year, according to Intellihot.

“Hot water tends to be a critical element in businesses, and people really want something reliable first and foremost,” Deivasigamani says. “So something that has worked OK, but may not be as efficient as it could be, people leave it alone. But they’ve left it alone, unfortunately, for a very long time.”

8 thoughts on “Illinois entrepreneurs rethink water heaters to cut energy use

  1. Yes, it is good thing to put some intelligence into EVERY product nowadays to save energy since computing power is basically free now with tiny little single chip processors. Observing the behavior will allow the systems to operate more efficiently.

    However, we should not be so quick to abandon tank heaters. Hot water tanks represent a massive existing energy storage system that can be tapped to work better with renewable energy. When there is an excess of electricity from a lot of wind or a cool sunny day, the excess energy can be stored as heat in the hot water tanks which can then be accessed at a later time when there is not an excess of electricity.

    • How are you going to access that heat energy? you can’t make electricity out of it so you can only use it as heat…..which is exactly how it is used now. You can’t make a battery out of a water heater.

  2. It sounds great ! I do have some concerns about the technology as well as specifications. The water in Illinois is notoriously hard. Those in Chicago are using lake michigan water, so they do not face what so many of us do. Has the company addressed this issue to customers?

  3. This is funny, I have had a tankless Hotwater heater for over 10 years now, and I was not the first kid on my block to get one, We also have one in Central America that works very well. It has a heating element that turns on with the flow of water. Simple ! When hunting in Texas a friend asked me if I wanted a HOT shower, so he thru a coil of copper into the fire at the cabin, hooked it up to the water feed line and BINGO Hot shower. I put one into my condo since I do not want a tank of 40 galona to fail and dump all thet water into my apt or worse yet, downstairs neighbors. This guy may be smart, but you can get a Tankless heater for less than $500 installed or about $250.00 and install yourself

  4. The whole argument about hot water heaters misses on crucial point. The vast majority of tank water heaters are very poorly insulated. I worked for years int eh chemical industry and in power industry and we used a number of insulated tanks. In most cases, The tanks I built or installed were insulated to have a maximum heat loss of 1 to 2%. The model for this was based on a loss of power than lasted several days with outside temperatures of zero deg. F. Many chemicals are solid rocks at that point and it can take weeks to melt a40,000 gallon tank to a usable condition and lost production is serious money. I also found that things like hot water heaters could easily be insulated to a level where you could virtually eliminate heat losses. Over the life of the average water heater (15 years) the numbers are huge. Several years ago I replaced my house water heaters with a 110 commercial unit. I stripped off the foam insulation provided and installed a 4 inch thick rigid fiberglass insulation blanket and a heavy gauge aluminum metal jacket. I also heavily insulated all the piping. The heat losses were through the relieve valve line and valve and the heater element access panels which should not be insulated. I put a meter on the both the old and the new heater and the total KW usage fo 1 month was cut in half. With my electric rates the savings was $38 per month.

    Tank heaters are very efficient when properly insulated. They are simple and cheap to maintain if the anode is accessible. With proper maintenance, they can easily last 30 years. The cheap insulation jackets sold in home centers are worthless though.

    Sometimes high tech solutions are simply an expensive way to correct a simple issue. Deal with the core issue and the more expensive solution is not needed.

  5. Most houses have air conditioner. they throw away heat that could be added to the hot water tank, if you want a more efficient water heater, a compressor to a 10,000 btu air conditioner could heat water at 1/3 the cost, at a 10 amp rating, you could also have a cold water tank as a left over byproduct from your water heating. For a cooler doanstairs. We waste so much heat, even the sun can warm our water, you could put black painted plastic PVC pipes full of water to absorb the sun, laying on an almost flat roof. Hot water could flow through the PVC pipes to replace the hot water you use from your tank all day. But I do have friends that like the tankless water heaters.

  6. I know that this technology works for back in 2007 while doing a building retrofit in California I ran into a issue where the architect had not allowed enough space to meet code in the restrooms. At the time they were using a very large gas hot water system to supply the entire building. By eliminating the current system and going with a tankless natural system with a recirculating pump we were able to recover enough space for the restrooms and still have plenty of space to service the tankless system. It is great to know that these folks taken this technology to the next level.

  7. Another way to reduce energy usage for hot water is to recover heat from the water going down the drain. A drain water heat exchanger will do this quite efficiently and will warm the water going to the water heater. No matter how you heat the water, using this device will decrease the amount of energy you use. Without it you are literally throwing energy and money down the drain. Check out swing-green for information on these units.