Furnaces don't dry the air any more than hydrocoil or hydronic baseboard. The only thing that matters is the dew point of the air and the final room temperature. Dry indoor air in the winter is a result of leaks in the house envelope and, especially, leaks in ducts that lie outside of the home's envelope (attic or crawlspace location). That is, areas not coupled to the living space. Heating appliances that take combustion air directly from the living space, as opposed to the outdoors, exacerbate this problem sucking in at least as much air as bathroom fan moves while a flame is lit.

What kind of water heater do you have, sealed combustion. modulating? If you are going to go with the hydrocoil, I like HTPs Versa-Flame and Versa-Hydro modulating/condensing boilers. Note that they are very similar differing in which "side" uses the heat exchanger. That is an important difference as the water after the heat exchanger is cooler. That means that if the HX drives your heat, you will need a bigger coil or more radiation. If the HX drives your hot water, you have less hot water. They are not cheap in any sense of the word.

For a low cost alternative, Westinghouse markets versions of the HTP Phoenix light duty modulating water heater that operates much in the same manner but modulate less (3:1 rather than, 5:1). You'd have to install your own HX here too. They only put out 76 kBTU. (They can be had for $2400 for 60 gal and $3000 for 80 gal.) By the time you add an HX, additional controls (to make DHW the primary and the heating to be subservient demand) and plumbing for the demand WH, you may be way over the cost of adding the Westinghouse.

Lastly, you must have very low electricity rates to consider using a heat pump rather than natural gas. Where the latter is available, it is almost always less expensive to use than a heat pump. One thing to consider in comparing a boiler as a heat source vs. furnace with the same fuel is the relative efficiency of the two sources. I've learned a lot about condensing boilers in the last few years, but I know little about comparisons between condensing boilers and condensing furnaces.

I mis-spoke about the dryness of air. I really meant the "temp" of the air. The way I've been reading it, hydronic heat transfer can be managed at different set points, but NG burns at only one temp and that's the temp you're basically heating the air to. Some like the "burst" of hot air. Some like gradual temp increase over time.

I have a Rheem Prestiege 94% (Paloma) condensing demand water heater in use now. I know Rheem makes an air handler with hydronic coil that's partnered with the same one (with bypass controls for peak demand, DHW, etc.)

With regard to AC vs HP, the cost for the units was minimally different and when paired with a modulating NG furnace, the set-points are adjustable. I plan on keeping an eye on rates and adjusting accordingly after the first year with some datapoints.

Mostly, I'm intrigued by not having to buy another combustion appliance, run more gas lines, look at up-sizing the meter, cutting another hole in the basement wall for the intake/exhaust lines, etc. If my climate is temperate and there's not a heavy need for simultaneous hot air and peak hot water, is it reasonable to think a high-end residential tankless system with the proper FPHE, circulation pumps, and a hydronic coil in a traditional air handler (trane/lennox/rheem/...) that supports one can keep up with a condensing furnace sized for the same load?

Dan

A variable speed 2-stage or modulating gas furnace has a gas valve will increase and decrease the amount of natural gas being burned. This type of furnace will not give a "burst" of hot air. At the lowest stage you may not even know the furnace is operating.

You already have a large gas line coming into the house to service your tankless hot water heater. I doubt you will need to increase the gas meter or the main gas service line. This assumes it is currently properly sized.

I think equipment that combines domestic hot water and heating becomes overly complicated. That's just my opinion. Those type of systems are a good solution when space is tight. I think you are better served getting a 95% efficient furnace. If your electric rates are low, you could consider upgrading the AC to a heat pump and creating a dual fuel system.

Thanks, Mike. That's the "conventional wisdom" I've been playing devil's advocate with myself on. The upstairs system is exactly as you describe and I've been happy with it. I have to assume my current gas supply in my way-oversized 5 ton will be more than enough for a smaller, more efficient replacement. The only real drawback is the necessity of new building penetrations for intake/exhaust on a condensing system, but in the grand scheme of things, it's not a huge deal. The one technology fear I did have with hydronic is the complexity of plumbing interaction between the heating loop and DHW. The small energy savings I would get would probably be heavily outweighed by the expense of adding pumps, heat exchangers, control circuits, etc.

"The small energy savings I would get would probably be heavily outweighed by the expense of adding pumps, heat exchangers, control circuits, etc."

That is what I am thinking. In addition to that, you add the continued cost of running the pump in addition to an air handler blower and the cost of maintaining the pump. it seems like picking an efficient heating method for the Atlanta area is much less important than the cooling method or picking an efficient heating method in, say, Minnesota or Vermont.

For deist, the following might be of academic interest since short cycling what instant water heaters seem to be designed to do in a way. For Mike, this explains why I am partial to a very special type of combination boiler in retrofits..

I have first hand (amateur) experience with, trying to retrofit the more common combination boilers to existing hydronic (convector/radiatior) systems. It can be very difficult. If not done right, you end up paying high efficiency boiler price and maintenance costs with mid efficiency results.

The problem is that you need very high output to supply DHW at the same time you need to match the boiler to the smallest zone. I'll bet that 9 times out of 10, in a boiler retrofit, if such a low mass modcon is installed, a buffer tank should be installed to add mass and curtail short cycling of the boiler. It is even difficult with a, low mass, hight efficiency boiler without DHW. This is especially true with the hydronic systems that were cut up into zones when oil prices started going up in the 1970s and people thought that it would save them some fuel. Sometimes the alternative to a buffer tank is recombining the zones to get into the minimum firing range of the low mass boilers.

I believe that the HTP Versa boilers can be relatively easily dropped in to replace very common hot start hydronic heat boilers with DHW coils with little or no changes to controls and piping. They have built in temperature buffering. It appears to me that the natural polarization of the water temp in the tank is a key to heat exchanger operation.

deist, going over this in my mind again, by adding hydronic coil/controls, you might be adding more complexity than an added furnace. Think about it.

Yes...and I thought I stated that: "The one technology fear I did have with hydronic is the complexity of plumbing interaction between the heating loop and DHW. The small energy savings I would get would probably be heavily outweighed by the expense of adding pumps, heat exchangers, control circuits, etc."

:)