Introduction
Refrigeration systems in commercial buildings represent a significant yet often overlooked source of recoverable thermal energy. Through refrigeration heat reclamation—commonly referred to as heat reclaim—waste heat generated during the vapor compression cycle of refrigeration and space-cooling systems can be captured and re-purposed for space heating or service hot water production. Leveraging this otherwise wasted energy offers substantial opportunities to enhance overall building efficiency, reduce energy costs, and lower greenhouse gas emissions.
Although refrigeration heat reclaim has existed for decades, recent technological advancements and market drivers have renewed interest in its application. In the past, concerns about refrigerant leaks and moderate fossil fuel prices limited adoption. Today, increasing decarbonization goals and the availability of low–global-warming-potential (GWP) refrigerants have made heat reclaim far more attractive. Modern systems can now achieve full-condensing heat reclaim, capturing both superheat and latent heat from the vapor compression cycle. This increases total recoverable capacity and can significantly offset—or even eliminate—the need for separate space-heating equipment. While these systems have long been used in commercial and industrial facilities, their integration with building systems continues to evolve and is not yet fully standardized.
What is the Measure?
This measure involves installing equipment that recovers waste heat from commercial refrigeration and DX air-conditioning systems and transfers it to building heating loads such as domestic hot water (DHW) or space heating. By offsetting conventional heating energy, heat reclaim improves overall system efficiency and reduces building operating costs.
The core components of a heat reclaim system typically include the following:
- Heat Reclaim Heat Exchanger (HX): Installed in the compressor discharge line, this component transfers heat from the hot refrigerant gas to a water or glycol loop.
- 3-Way Valve and Controls: Diverts refrigerant to the heat reclaim HX when heating is required or bypasses it to the main condenser when it is not. Controls manage sequencing to ensure stable operation and prioritize reclaim when possible.
- Pumping Loop and Storage Tank: A dedicated water loop, often paired with a storage tank, circulates the reclaimed heat for DHW preheat, space heating coils, or other building uses.
- Backup/Trim Heat Source: A boiler or heat pump water heater (HPWH) is typically included to provide additional heating when reclaimed heat alone cannot meet demand.
When properly designed and integrated, heat reclaim can lower operating costs, help meet energy code requirements, and reduce carbon emissions. By reusing energy that would otherwise be wasted, facilities can improve heating performance and extend equipment life.
Heat Reclaim Configurations
Two common system configurations are partial recovery (desuperheating) and full-condensing systems. Desuperheating systems remove only the hottest portion of the refrigerant’s heat, known as “superheat”. Alternatively, full condensing systems also capture the larger amount of latent heat released as the refrigerant condenses. The latter provides a greater share of a facility’s heating or hot water demand but adds equipment cost and system complexity.
How it Works
Refrigeration heat reclaim follows a straightforward process that turns waste heat from refrigeration systems into usable building energy. This is achieved through the following:
- Heat Capture: Hot refrigerant vapor leaving the compressor rack is directed through a heat reclaim HX. Here, the refrigerant is cooled — removing either just its superheat (desuperheating) or both superheat and latent heat (full-condensing) — and transfers that energy into a separate water loop.
- Heat Transfer: A dedicated pump circulates water or a water/glycol mixture through the HX, carrying the captured heat into a storage tank or directly into DHW or hydronic heating systems.
- System Integration: A dedicated pump circulates water or a water/glycol mixture through the HX, carrying the captured heat into a storage tank or directly into DHW or hydronic heating systems.
- Backup & Balancing: If heating demand exceeds the reclaimed heat available, a boiler or HPWH provides supplemental capacity. Conversely, if heating demand is low, excess refrigerant bypasses the reclaim HX and rejects heat outdoors via the condenser.
- Outcome: By recovering waste heat, buildings reduce fuel consumption for water and space heating, lower operating costs, and cut carbon emissions — while also reducing runtime and wear on conventional heating equipment.
When to Consider This Measure
Refrigeration heat reclaim is most effective in facilities with continuous refrigeration or space-cooling loads and steady space heating or hot water demands. Typical applications include grocery and convenience stores, refrigerated warehouses, restaurants, food processing plants, and ice rinks, along with other commercial, industrial, agricultural, and multifamily buildings with significant heating needs.
Under California Title 24, Part 6, heat reclaim is required only in retail food and beverage stores larger than 8,000 ft² with refrigerated display cases or walk-ins, and only for space heating.1 The CEDA program expands beyond these code minimums by extending eligibility to additional facility types and by allowing recovered heat to serve domestic and service water-heating loads in addition to space heating. This broader scope encourages adoption in more diverse building applications, supports demonstration of varied system configurations, and provides performance data that can inform future updates to Title 24.
Sizing and Design Considerations
Available Heat (Total Heat of Rejection)
Determine design and typical total heat of rejection (THOR) per rack and in aggregate. This defines the maximum recoverable heat and verifies compliance with any capture-fraction requirements.
Coincident Heating Demand
Quantify DHW and/or space-heating loads along with the required temperature rise to setpoint. Size the heat reclaim system to match loads that coincide with refrigeration operation, or include thermal storage to balance timing differences.
Strategy (Desuperheat vs. Full-Condensing)
Select the desired approach temp and HX capacity/rating based on system type and refrigerant. Full-condensing systems require higher-rated components, especially for CO2 or other high-pressure refrigerants.
Refrigerant Selection
Consider selecting a low-GWP refrigerant early in design to support decarbonization goals and future equipment compatibility.
Secondary Loop Sizing (Water/Glycol Flow & ΔT)
Size pump and piping for the target supply/return temperature differential (ΔT). Verify friction losses and velocities, and include key components such as an air separator, expansion tank, and strainers.
Head-Pressure Management & Bypass
Maintain the minimum condensing pressure and temperature required for refrigeration stability. Size the three-way valve and bypass so the main condenser can accept the remaining load under all operating conditions.
Thermal Storage
Provide buffer or preheat volume to bridge mismatches between heating load and available reclaimed heat. Design storage for stratification and ensure adequate usable draw volume.
Trim or Backup Heat Integration
Size the boiler or HPWH to meet setpoint when recovered heat is insufficient. Include tempering or anti-scald protection and clear staging logic (heat reclaim first, trim heat second).
Seasonal & Part-Load Performance
Evaluate system capacity across ambient temperature bins and operating modes (e.g., transcritical CO2 in warm weather). Confirm summer condenser capacity and winter heating coverage under heat reclaim priority.
Pairing Considerations
Refrigeration heat reclaim performs best when it is integrated effectively with a building’s DHW and space-heating systems. Effective pairing ensures that recovered heat is used whenever heating loads are present and that the refrigeration system maintains stable operation.
Integration relies on carefully coordinated controls between the refrigeration rack and the HVAC/DHW systems. A three-way valve and temperature-based sequencing direct refrigerant flow to the heat reclaim HX when heating demand exists, prioritizing reclaimed energy before activating backup sources. If the heating load exceeds reclaim capacity, a secondary heat source—such as a condensing boiler or HPWH—automatically supplements the demand. When demand is met, the system bypasses the reclaim loop to maintain refrigeration efficiency.
This integrated control strategy maintains consistent water temperatures and stable head pressures while ensuring smooth transitions between recovered and conventional heat. The result is improved energy efficiency and reliable refrigeration performance.
System Layout
Figure 1: DHW Preheat Schematic
Figure 1 illustrates the typical operation of a desuperheating heat reclaim loop for DHW applications. When superheated vapor leaves the compressor, it flows to a three-way valve that determines whether the refrigerant should pass through the heat reclaim coil or go directly to the condenser. If the water in the heat reclaim tank is below its temperature setpoint— indicating a need for hot water—the valve diverts the discharge gas through a coil submerged in the tank. As the hot vapor travels from the top to the bottom of the coil, it transfers sensible heat to the surrounding water, warming it for domestic use. The partially cooled vapor then continues on to the condenser, where the remaining heat is rejected and the refrigerant condenses into a liquid. If the tank temperature reaches its setpoint (typically 120–140 °F), signaling low demand, the valve bypasses the coil entirely, sending the discharge vapor straight to the condenser. If the building has a recirculation loop, return water can also enter the reclaim tank to maintain steady hot-water temperatures at remote fixtures.
Figure 2: Mixed Air Heating Schematic
(Desuperheating Mode)
Figure 2 illustrates the typical operation of a desuperheating heat reclaim loop for space-heating applications. The configuration is similar to that of DHW heat reclaim, except that the refrigerant heat reclaim coil is installed inside an Air Handling Unit (AHU) rather than inside a water tank.
Figure 3: Outdoor Air Preheat Schematic
(Full Condensing Mode)
Figure 3 illustrates the typical operation of a fully condensing heat-reclaim loop for space heating applications. A three-way valve on the compressor discharge line directs hot refrigerant gas to a water-cooled reclaim condenser positioned above the main condenser. Within this coil, the refrigerant releases heat and may desuperheat, partially condense, or fully condense before continuing to the regular condenser, where any remaining condensation occurs. A water loop transfers the recovered heat from the reclaim condenser to a coil in an AHU, enabling space or air-heating even when the air handler is located remotely.
Note: The schematics provided in this guide are for informational purposes only. Project teams should always consult with a licensed professional to evaluate and design systems appropriate to their specific applications.
Benefits of Refrigeration Heat Reclaim
- Reduces overall energy use by supplying recovered heat for domestic hot water and space heating.
- Reduces utility costs by offsetting gas or electric heating energy with recovered heat.
- Improves system efficiency when integrated with HVAC equipment, supporting low-carbon and high-performance building design.
- Cuts greenhouse gas emissions by offsetting fossil-fuel heating and contributing to decarbonization goals.
- Extends equipment life by reducing boiler runtime and cycling.
- Offers design flexibility through compatibility with multiple end uses, including DHW, space heating, and dehumidification.
- Supports cost-effective integration when coordinated early among refrigeration, plumbing, and HVAC design teams.
What Are the Challenges/Constraints?
- Higher upfront costs for equipment, design, and commissioning, though long-term savings often offset these expenses.
- Complex design and controls are needed to balance refrigeration and heating performance while maintaining stable head pressure and reliable heat delivery.
- Ongoing maintenance is required to prevent fouling, valve issues, or pump wear and ensure consistent performance.
- Variable heating demand or limited overlap with refrigeration loads can reduce recovery potential and increase reliance on backup heating.
- Knowledge gaps among design teams and operators— combined with limited field data and broader industry awareness—can create uncertainty around optimal operation, control strategies, and system reliability, slowing market adoption.
What Are the Qualifications for CEDA Inducements?
For a project to be eligible for refrigeration heat reclaim inducements, it must meet the following requirements:
- Enrolled in CEDA
- Be located within SCE, SoCal Gas, PG&E, or SDG&E territory
- Provide a sequence of operations for the AC/refrigeration heat reclamation system design
- Each contributing system must provide a minimum of 50,000 Btu/h of design heat rejection for heat recovery
- Provide equipment cost information
- Participate in on-site verification and possible data logging of the system
- If multifamily, the building must be classified as non-residential and be a high-rise with four or more floors above grade
- Participate in equipment data collection effort if selected
Notes:
- Project may be selected by PG&E for a future case study
- For more details on qualification criteria, reference the high-performance measure details on the CEDA website. https://californiaeda.com/high-performance-measures/
- Measure requirements are subject to change; this guide reflects information available as of October 2025—for the most current measure requirements, contact CEDA@willdan.com
References:
- California Energy Commission. (2025, July). CEC-400-2025-010-F_0 [PDF]. https://www.energy.ca.gov/sites/default/files/2025-07/CEC-400-2025-010-F_0.pdf
- Copeland (Vilter). (2021, April). How to leverage heat recovery in your industrial refrigeration system [White paper]. https://media.copeland.com/05aa2593-774b-42b1-b5a4-b16d004e86b4/C011%20Heat%20Recovery%20white%20paper%2013257-EMR-Vilter_WhitePaper_LR2.pdf
- National Renewable Energy Laboratory. (2015). Refrigeration Playbook: Heat Reclaim Optimizing Heat Rejection and Refrigeration Heat Reclaim for Supermarket Energy Conservation (NREL/TP-5500-63786) [PDF]. https://docs.nrel.gov/docs/fy15osti/63786.pdf
