U.S. Department of Energy Proposes New Energy Efficiency Standards for Water Heaters

Last week marked a milestone in the federal standards process for residential electric and gas water heaters. On Friday, July 21, the U.S. Department of Energy (DOE) published the proposed new federal efficiency standards for water heaters. The proposed standards will transition the majority of electric storage water heaters to heat pump technology and make important incremental steps to improve gas-fired water heater efficiency.

The proposed standards are generally similar to recommendations submitted to DOE last year by members of a diverse stakeholder coalition of industry partners – including NEEA. NEEA participated in this joint recommendation in October 2022 to ensure that the needs of consumers in the Northwest were met, including those in cold climates, with challenging installation locations and across all income levels.

This is a huge win for consumers in the Northwest and across the country. It is a direct result of NEEA’s leadership and the alliance's collaboration with utilities, manufacturers, and other industry partners to create a product specification that supports consumer preferences and benefits the energy system to enable a thriving Northwest. To quote the proposed rule: “DOE believes the Joint Stakeholder Agreement from a cross-section group of stakeholders provides the Department a good indication of stakeholder views on this rulemaking and provides the Department with some assurance that industry can transition to these levels and the market will see significant benefits as indicated by DOE’s analysis.”

Also in the rule, the DOE identifies the Advanced Water Heating Specification (AWHS) as a de-facto industry standard. The AWHS was originally developed by NEEA in 2009 to ensure cold-climate performance. Since creating the first version, NEEA has worked with both the region and market to iterate on the AWHS and track real world performance as product improvements were made over the last 13-14 years through voluntary programs. Incorporation of AWHS elements in the revised test procedure is an important step to ensure that federal standards for water heaters recognize Northwest climates and consumer needs. Read more about the Advanced Heat Pump Water Heater Specification.

Once the proposed rule is finalized, it will be approximately 6 years before it takes effect in 2029. DOE estimates that the new standards will result in 27 quadrillion BTUs (quads) of full-fuel-cycle (FFC) energy savings nationally over thirty years, greater than savings achieved by any DOE standard to date.

While this is a significant step, there’s more work ahead for the alliance’s Market Transformation efforts for water heaters. Once this rule passes, NEEA will continue to help the Northwest market overcome market barriers and prepare for the standard to go into effect, particularly in markets where the technology is lagging. NEEA will continue to build Northwest installer and distributor familiarity and technical capabilities, increasing customer awareness and preference, and helping the market easily respond to installation challenges.

Read more about NEEA’s success transforming the market for heat pump water heaters.