If you’re specifying hot water for a hotel, office, hospital or leisure centre, an electric water heater is probably on your shortlist. This guide explains what electric water heaters are, how they work, the main types available and how to pick the right one for a commercial building.
What is an electric water heater, and how does it work?
An electric water heater heats water using electricity instead of gas or oil. Inside the unit, a heating element sits in the water and warms it up, while a thermostat checks the temperature and switches the element on and off to keep the water at the level you’ve set. You’ll find electric water heaters in hotels, offices, hospitals, schools, gyms and factories, supplying hot water for showers, taps, kitchens, cleaning and, in some buildings, space heating too.
The basic process is the same across most types, even though the technology inside varies. Cold water enters the unit, either into a storage tank or straight through a heat exchanger. An electric heating element, or in a heat pump, a refrigeration cycle, raises the water to the set temperature, while the thermostat monitors and controls it so the water doesn’t overheat or run cold. From there, hot water is either stored ready for use or delivered on demand. The main difference between systems, in other words, is whether they store hot water in advance or heat it the moment you need it.
Types of electric water heaters
There are four main types of electric water heater used in commercial buildings. Each one suits a different pattern of hot water demand, so the right choice depends on your building, not just your budget.
Tank (storage) water heaters. store hot water in an insulated cylinder, ready for use. Commercial units typically hold between 75 and 375 litres, though larger bespoke tanks are available for buildings with heavier demand. As hot water is drawn off, cold water refills the tank and is reheated to the set temperature, which makes tank heaters a solid choice for hotels, restaurants and hospitals where hot water is needed steadily throughout the day. The trade off is standby heat loss: because the tank keeps a large volume of water hot around the clock, some energy is lost even when nobody’s using it, though good insulation reduces this.
Tankless (on demand) water heaters. skip the storage tank altogether. When you turn on a tap, cold water passes through a heat exchanger and is heated instantly, then delivered straight to the outlet. Because they only heat water when it’s needed, tankless heaters cut out standby heat loss and can lower running costs, especially in buildings with unpredictable hot water use. The catch is flow rate: if several taps or showers run at once, a tankless unit can struggle to keep up, and the high power draw sometimes means an expensive upgrade to your electrical supply.
Heat pump water heaters. don’t generate heat directly. Instead, they use a reverse refrigeration cycle, the same principle as a fridge or air conditioner, to pull heat from the surrounding air or ground and transfer it into the water. This makes them highly efficient: air source heat pumps can cut energy use by up to 50% compared with a standard electric element. The catch is that they perform best delivering lower temperature water, around 35°C, which suits underfloor heating well. Commercial hot water usually needs to stay above 60°C to control the risk of legionella, and heat pump efficiency drops off at that temperature, particularly in winter. For this reason, most commercial projects use a heat pump to preheat water, then finish the job with an electric top up, rather than relying on the heat pump alone.
Packaged electric water heating systems. combine an electric boiler with a storage cylinder, heating the water indirectly through a coil rather than a single immersion element. Multiple smaller heating elements work together under one set of controls, giving more even heating, longer equipment life and built-in backup if one element fails. Older commercial electric boilers, up to 100 kW, tend to be large, floor standing units. Newer packaged systems are more compact and can be wall mounted, or in the case of Adveco’s FUSION range, mounted directly onto the cylinder, which shortens the pipe run and frees up plant room space. FUSION can also be paired with an air source heat pump or solar thermal panels as a preheat source. Solar thermal alone can cut annual water heating energy demand by at least 30%, and pairing a heat pump preheat with FUSION improves the heat pump’s efficiency by reducing how hard it has to work, lowering both carbon emissions and running costs without sacrificing resilience.
Specifying the right system for a commercial building
Picking the right system comes down to five practical questions: how much hot water does the building use, and does demand come in steady streams or sudden peaks? How much plant room space is available? What’s the current electrical supply, and would a tankless or heat pump system need an upgrade? How important is resilience, given that a hospital or hotel can’t afford downtime? And what are the carbon and running cost targets, both now and against future regulation? Hotels, hospitals and leisure centres, where demand is high and constant, usually do best with tank or packaged systems. Offices and smaller sites with lighter, more sporadic use can often get away with tankless units.
Electric water heaters convert nearly all the electricity they use into heat, so they’re efficient at the point of use, and heat pump or preheat systems go further still by using ambient heat instead of generating all of it from scratch. As the UK grid draws more power from renewables, electric water heating gets cleaner over time without any changes to the equipment itself, which matters for compliance too: it already helps new build projects earn BREEAM credits and meet Part L requirements, and is increasingly the default specification for organisations working towards net zero.
The equipment is only half the job. Look for a supplier with genuine experience specifying hot water for your building type, not just residential installs, who can show real projects and real numbers rather than marketing claims, offers a proper design service that sizes the system to your actual demand, and provides aftercare and servicing so the system keeps performing once it’s installed. Adveco has been designing and manufacturing commercial hot water systems, including the FUSION packaged electric range, for buildings across the UK, and our team can talk through what will actually work for your site.
Frequently asked questions
What’s the difference between tankless and tank electric water heaters. a tank heater stores hot water in advance, so it’s ready the moment you need it, but it loses some heat while on standby. A tankless heater heats water only when a tap is opened, which saves energy but limits how much hot water can be delivered at once.
How long do electric water heaters last. a well maintained commercial electric water heater typically lasts 10 to 15 years, though packaged systems with multiple smaller elements often run longer, because a single element failing doesn’t take the whole system down.
Are electric water heaters cheaper to run than gas. it depends on your electricity and gas tariffs, and on which type of electric system you choose. Heat pump and packaged systems with renewable preheat close the gap considerably, and as gas boilers face tightening regulation, electric systems are becoming the more future proof choice.
Can electric water heaters work with solar or heat pumps. yes. Packaged systems like FUSION are designed to accept a heat pump or solar thermal preheat, cutting both carbon emissions and running costs while keeping the resilience of a storage cylinder.
Every building has different hot water demands. If you’re planning a new project or replacing an ageing system, get in touch with Adveco to talk through what will work best for your site.
