I recently replaced my oil furnace with a new one. I included a domestic hot water coil despite already having an existing oil fired hot water heater, figuring that when the tank went, I could use the coil. Well, like clockwork the HW tank sprung a leak about one month later and I easily isolated and bypassed the tank using the valves that were installed. I have found the coil to be not to my liking and want to install a new storage tank. My question is which system should I install?
I have been told that using the coil and a circulator pump as a closed loop to heat water in a tank fitted with controls is the longest lasting and most efficient system. However, I hear it is expensive to install and requires use of the oil burner year round as well as leaving me with no backup HW system should the burner fail. Could I get close to the same results by installing a new oil fired tank and using it as a holding tank for water from the coil during the heating season? I would valve the coil so I could divert hot water from it to the tank and then shut off the cold water feed to the tank as well as its burner. Since there would be no way to reheat water in the tank, would I lose too much heat in this way? Would adding insulation to the tank help? Since the heating season here in NY is from about October to May, wouldn't I prolong the life of the tank dramatically by not using the burner on it for these months? In short, can I get similar results to the closed loop system in this manner without the added expense? I should say that the burner gun from the existing water heater is a Beckitt high speed in good shape that can be reused. I would appreciate your help with this decision and I hope my long winded query does not overload your server.