Steam can carry many orders of magnitude more thermal energy than hot water. That means much smaller piping and instantaneous hot water at the tap. Space heating with radiators can benefit from a low-pressure steam distribution setup. Pipe insulation is critical for steam piping not only to reduce thermal energy loss but for safety.
A closed-loop water-heating system is used to heat domestic water from steam at many commercial installations. Instead of circulating the water directly through a boiler, it is routed to a fluid-to-fluid heat exchanger. The domestic water, which is often full of chemical impurities, circulates through the tubes in a multi-pass, tube-in-shell heat exchanger. The tube bundle is more easily cleaned (than the boiler tubes) when precipitants clog the flow passages.
Keeping the heat-transfer surfaces clean ensures the maximum heat-transfer rate in the system at all operating conditions. The boiler maintains a constant temperature within by varying the burner combustion rate. The domestic hot water is kept at a constant temperature by varying the flow of heated water through the heat- exchanger shell. This can be done most economically by a two-way valve that mixes hot and cold water.
A common energy-saving feature for boilers is to reset the temperature of the hot water generated for domestic use according to the outside temperature. As the ambient temperature increases the hot-water temperature can be decreased to conserve energy. Also, the shell and all piping should be well insulated.
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Excerpt from Energy Conservation Projects.