I am building a new house and planning on putting in a On Demand Hotwater heater. The Architects have return lines for the hot water and were recommending recirculating the hot water. It seems to me if you are using an On Demand Heater having the recirculating system wouldn't be a good idea?

It would be a heat loss, but from a convenience point of view you never have to wait for hot water. (Still I wouldn't do it- YMMV.)

If the location of the HW heater relative to the taps the distribution tree is reasonable in the first place the wait would never be long anyway. For the money you'd spend on recirculation you could buy a drainwater heat recovery heat exchanger and recover ~50% of the heat lost in showers, which is typically 40% of the average family's water use, in which case you've cut your energy use by ~20%. (50% of 40%) (In a showering configuration, even a typical 35kbtu tank heater can deliver and endless shower with one of those.)

Assuming the loop is entirely within conditioned space, if you put R6 or better of insulation over the recirculation loop plumbing the energy loss can be minimized. But if this is a gas or propane fired tankless on-demand, the wear & tear on the HW heater is increased significantly by repeated short-cycling (which also cuts into it's raw combustion efficiency and as-used EF numbers.) IIRC Takagi voids the warranty if the recirculation loop flow is over 2gpm. Other vendors may have similar policies. If you're roughly doubling the number of ignition cycles, that takes it's toll too- you're asking for reliability trouble on the ignition & flame detect etc. a few years down the road.

The ONLY way I'd do it (if the convenience was worth the upfront expense to me) is with 2-4 gallon well insulated buffer tanks located at the points of use. This would limit the increased number of cycles on the on-demand, increase the burn lengths to get the burner efficiency up, and abandon less hot water in the distribution plumbing. The standby losses of foam-insulated electric mini-tanks (eg. Bosch Ariston) are low, even if using it's internal heating elements (which is one non-recirc option), but if the switch is rigged to run the recirculation pump instead of the elements, it just cycles the on-demand. Figure you abandon on the order of a gallon of hot water for every 40' of 3/4" plumbing though, and the lengths are double in a recirculation loop. If the convenience factor or water-waste is important to you, it may be worth buffering the on-demand with a few strategically placed mini tanks and taking the electrical power use hit of maintaining the temp between big draws (~30-35w/tank, worst-case). If the output of the on-demand is set a few degrees higher than the setpoint on the mini-tank, the tank's elements will (almost) never turn on.

If you're heating the place with a hydronic boiler, an indirect-fired HW tank running off the boiler will as-efficient or more, and will have none of the high/low flow restrictions & cold-water-sandwich quirks of an on-demand, and usually (depending on the output rating of the boiler) deliver pretty much the same non-stop stream of hot water for spa-tub filling, etc. If you don't have large tubs to fill and usually take showers, you don't need to up-size the boiler for the hot water load if you install a drainwater heat recovery unit that's 50%+ at 2.5gpm. The short list (as tested by independent agents for the Canadian gub'mint) lives here:

http://oee.nrcan.gc.ca/residential/personal/retrofit-homes/questions-answers.cfm#q45

In any energy-conscious new construction drainwater heat recovery ought to be considered, no matter how you heat hot water. The payback is WAY faster than any solar technology. Only batch HW heating in non-freeze climates comes close. The boost in shower length capacity is a great luxury, and if it can down-size the rest of the mechanical systems, it pretty much pays for itself up front.

Wow Thanks for a great reply - I will definitely check out the DWHR units. I don't think I will have any lines longer then 40ft and most will be in the 20-30ft range so it doesn't sound like it will be a big issue. Here is a option - I am also looking at GS-GEO as a heat source not sure if I'll have the cash for it but if I do then a recirculation setup would work right.

I was looking at a smart builder's house and he used an on-demand plus a tiny electric water heater for the recirculation loop. I presume that the demand heater wasn't in the recirc loop.

I haven't seen a good cost analysis of recirc vs point-of-use vs dumping water until it gets hot. Certainly the first two are more convenient.

No matter what type of recirc you set up or heat source you use, insulate the distribution plumbing and it'll work more efficiently.  With short lines like that you'll definitely want a local buffer tank if using a tankless, otherwise the sub-1 gallon draws on the tankless will have sub-50% efficiency.  If drawing from a central tank (like your geo desuperheater storage) it won't affect efficiency much as long as you insulate the loop in both directions.

If you have at least 4' of vertical plumbing chase or basement below the primary shower you can get better than 50% energy return out of DWHR.  Both length and diameter count- more is generally better, so if you have only a short space, a 4" diameter heat exchanger will yield better performance than a 3" dia unit, lengths being equal.  It's a big hunk o' fabricated copper and priced accordingly, but it should be well under a grand. If water pressure is an issue, some have much lower pressure drop across them per unit flow than others- 3/4" piping vs. 1/2" on the potable-wrap makes a difference, as do the  designs that splits the wrap into multiples or does series-paralleled sections for lower resistance at high flow:



^^x4 split-wrap---vs---  2 section parallel slinky-wrap with sectional bypass^^

There are horizontal plate-type drainwater HXs under development, (eg. EcoDrain) but no NRCan data on performance, and I'd be a bit concerned about gunking/clogging with them:



The Eco-GFX peops claim to have a new improved design that's more effective than their earlier stuff, and cheaper/higher-performance than their competition, but independent testing has yet to confirm or refute that claim.  The  NRCan list is the only good side-by-side performance comparison between models that I'm aware of.

Just about any of 'em perform well enough to be worthwhile in the larger sizes.

Concerning recirculation, I agree that though it may be a water saver, it will also like be an energy waster if you have it running all day. However, while I have only looked at two systems (a Laing "autocirc" under the counter electric pump and a Navien tankless water heater), both have a programmable timer. The Navien actually has a remote control with the timer. So to save energy, you could set the timer to run only during the busy usage times, for example, from 6-8 am and 9-10 pm. That would give you instant hot water without much energy loss. Of course, if you live in a cold climate, you could leave it running 24 hours or even better, only during the daytime during the winter months, because any heat loss in the hot water pipes would simply contribute to the overall heating of the house. I agree with Dana1 that in any case, install a DWHR system because that reduces energy use and provides more hot water. A really smart solution.

Instead of putting a recirculating hot water pump on a timer I plan to use a D'Mand pump with a push  button. I push the button when I enter the bathroom, and by the time I'm ready to get in the shower the water is primed. The pump shuts off as soon as it senses the hot water.

Our insulated lines will be on a manifold - header hybrid system within about 40' of the water heater, so I'm not sure we even need the pump. Since we will be on a rainwater system, we're even more serious about conserving water.

Davidqxo, thanks for the tip about the D'mand pump. Looks interesting.