Department of Energy Releases Final Rule on Water Heater Energy Conservation Standards

The Department of Energy (DOE) recently released its Final Rule: Energy Conservation Program: Energy Conservation Standards for Consumer Gas-fired Instantaneous Water Heaters.

The report includes an analysis of the energy conservation standards that would impact water heater technologies. The department laid out estimates of the economic impact the standards would have on manufacturers, as well as the criteria in place for determining the feasibility of replacing such technology. 

The report estimates the total cost of conversion for the industry — i.e., the cost to bring existent products into compliance with the new standards — to be approximately $20.4 million. Additionally, using a 7% discount rate, the DOE estimates the product cost of the standards to be $88 million per year, and the estimated annual benefits in reduced consumer operating costs to be $187 million. See the chart below.

However, the DOE does preface that the specifics of energy savings cannot be known for certain without knowledge of the specific circumstances in which technological conversion will take effect.

The rule has been broadly met with resistance from the gas industry, being criticized for its elimination of non-condensing tankless water heaters.