In 1776, the first engines were installed and working in commercial enterprises. These first engines were used to power pumps and produced only reciprocating motion to move the pump rods at the bottom of the shaft. The design was commercially successful, and for the next five years Watt was very busy installing more engines, mostly in Cornwall for pumping water out of mines.
These early engines were not manufactured by Boulton and Watt, but were made by others according to drawings made by Watt, who served in the role of consulting engineer. The erection of the engine and its shakedown was supervised by Watt, at first, and then by men in the firm's employ. These were large machines. The first, for example, had a cylinder with a diameter of some 50 inches and an overall height of about 24 feet, and required the construction of a dedicated building to house it. Boulton and Watt charged an annual payment, equal to one third of the value of the coal saved in comparison to a Newcomen engine performing the same work.
The field of application for the invention was greatly widened when Boulton urged Watt to convert the reciprocating motion of the piston to produce rotational power for grinding, weaving and milling. Although a crank seemed the obvious solution to the conversion Watt and Boulton were stymied by a patent for this, whose holder, James Pickard, and associates proposed to cross-license the external condenser. Watt adamantly opposed this and they circumvented the patent by their sun and planet gear in 1781.
Over the next six years, he made a number of other improvements and modifications to the steam engine. A double acting engine, in which the steam acted alternately on the two sides of the piston was one. He described methods for working the steam "expansively" (i.e., using steam at pressures well above atmospheric). A compound engine, which connected two or more engines was described. Two more patents were granted for these in 1781 and 1782. Numerous other improvements that made for easier manufacture and installation were continually implemented. One of these included the use of the steam indicator which produced an informative plot of the pressure in the cylinder against its volume, which he kept as a trade secret. Another important invention, one which Watt was most proud of, was the parallel motion which was essential in double-acting engines as it produced the straight line motion required for the cylinder rod and pump, from the connected rocking beam, whose end moves in a circular arc. This was patented in 1784. A throttle valve to control the power of the engine, and a centrifugal governor, patented in 1788,[23] to keep it from "running away" were very important. These improvements taken together produced an engine which was up to five times as efficient in its use of fuel as the Newcomen engine.
Because of the danger of exploding boilers, which were in a very primitive stage of development, and the ongoing issues with leaks, Watt restricted his use of high pressure steam – all of his engines used steam at near atmospheric pressure.