Since 2005, NEEA has worked to permanently advance the heat pump water heater (HPWH) market using a proven, holistic approach to Market Transformation. Through this unique and established process, Northwest utilities, manufacturers and energy efficiency organizations work together to bring energy-efficient technologies to the Northwest market and create the conditions for their adoption. NEEA’s end-to-end Market Transformation efforts include:
- Collaborating closely with the entire supply chain.
- Providing critical data and technical guidance to influence product development for the benefit of Northwest consumers and utilities.
- Cultivating awareness and demand among Northwest consumers and installers through training and promotion.
- Influencing the advancement of codes and standards to lock in efficiency gains, by providing energy, cost, and customer satisfaction data to represent the needs of Northwest customers.
NEEA’s work has paid off by achieving unprecedented adoption of HPWHs across the region, while also locking in efficiency advancements on a national level. By influencing the passage of a new federal water heating standard, NEEA helped to permanently raise the baseline for water heater efficiency and deliver benefits to all Northwest consumers, including both electricity and natural gas customers, and those living in colder climates. And the work is not yet done. In anticipation of the standard taking effect in 2029, NEEA will continue to work with the market to make sure installers, distributors and other market actors are informed and ready
Permanent change for the Northwest
NEEA’s Market Transformation efforts have already permanently changed the water heating market, influencing product advancements that maximize efficiency, performance and customer satisfaction for residents in all Northwest climates. Through 2023, this proven technology has delivered energy savings, while
achieving unprecedented market share compared to other regions in the country.
National influence for regional benefit
Though highly efficient HPWHs had been available for decades, the technology was unable to gain traction in the U.S. market due to a variety of barriers, including higher upfront costs, low awareness among consumers and installers, and the lack of a product specification to guide manufacturers. NEEA’s work systematically addresses each of these barriers to permanently change the market to provide lasting value to Northwest utilities and consumers. For example, to amplify the voice and reach of the Northwest, NEEA staff worked with ENERGY STAR® in 2007 to develop the nation’s first labeling system for water heaters, including HPWHs, along with the first ENERGY STAR specification. This work paved the way to motivate one of the country’s largest water heater manufacturers to build a qualifying product. With a national manufacturer on board, NEEA focused on attracting more manufacturers into the market and improving product performance. To further meet the needs of Northwest consumers, NEEA developed the Specification for Heat Pump Water Heaters Installed in Northern Climates in 2009. Collaborating closely with national stakeholders, NEEA helped evolve the specification into the Advanced Water Heater Specification (AWHS) and create a list of qualifying products. The AWHS expands upon the initial specification by introducing four product tiers representing increasing levels of efficiency. Products in the highest tier, Tier 4, are 67% more efficient than products in the lowest tier. Data now shows that 98% of Northwest HPWH sales since 2019 have been Tier 3 or better, driven largely by NEEA’s work to support manufacturers in developing more products that qualify for the higher efficiency tiers.
Improved products for happier customers
Every step of the way, NEEA has worked to make HPWHs as effective and valuable to Northwest consumers as possible. These efforts have also included guiding improvements to customer experience, such as evolving the AWHS to require increased noise reduction and improved flexibility to control cold air exhaust. Additional AWHS requirements target proper sizing and selection of HPWHs for specific applications, so that customer hot water needs are satisfied, no matter where they live in the Northwest. As part of a comprehensive effort to verify that the products operate efficiently and reliably for all Northwest climates and installation situations, NEEA partnered with manufacturers to add smart controls to Northwest-ready HPWHs. These controls make the products demand-response capable with the potential to deliver a host of other benefits—including lower utility costs and better renewable energy integration to help ensure a reliable and efficient power supply for generations to come.
Setting a new standard
On their way to elevating the federal water heating standard in 2024, the U.S. DOE used a significant amount of data from NEEA to inform the adoption of a revised test procedure for all electric water heaters. In their update, which differentiates the performance of HPWHs in cold climates, the U.S. DOE referenced NEEA’s AWHS as a de-facto industry standard.
This active engagement in the federal standards process has long been an important aspect of NEEA’s Market Transformation work. The passage of the 2024 federal water heating standard represents a major milestone in these efforts, as it is built upon decades of effort and leadership by the alliance, its market partners, and many stakeholders across the country. With the new federal standard, energy savings are now built-in for years to come, while Northwest consumers in all climates have a more efficient water heating option.
More work ahead
While the passing of this standard is a significant step, there’s more work ahead for the alliance’s Market Transformation efforts for water heaters. To ensure successful adoption of the new standard in the Northwest, NEEA will continue increasing installer and distributor familiarity with electric heat pump water heater technical capabilities, supporting customer awareness and preference, and helping the market easily respond to varying installation scenarios. At the same time, NEEA will continue its partnerships with manufacturers to guide them in the development and market release of heat pump water heater products.
HPWH transformation over the years
The below snapshot highlights some of the major milestones of NEEA’s HPWH Market Transformation work since 2005. To access the full timeline, visit neea.org/hpwh-timeline.pdf.
