On April 30, 2024, the U.S. Department of Energy (DOE) finalized energy-efficiency standards for residential water heaters. These new efficiency standards for water heaters from DOE are predicted to save Americans over $7 billion in utility bills each year. Key stakeholders, including environmental advocates and a major U.S. water heater manufacturer, support these standards.

What to Expect

The new standards will likely result in manufactures adopting heat pump technology in their electric water heaters for improved efficiency, benefiting both consumers and the environment. In just 30 years, these standards are projected to save $124 billion on energy bills and cut 332 million metric tons of carbon dioxide emissions. Required compliance with the new standards begins in 2029, with over 50% of newly manufactured electric storage water heaters expected to use heat pump technology, compared to the current 3%.

Water heating accounts for 13% of annual residential energy use and costs, and the new standards aim to reduce this by 10%. These regulations mark the largest energy savings ever from a single DOE efficiency standard. Standards for gas-fired and oil-fired water heaters see moderate efficiency increases, while gas-fired instantaneous water heaters are still under consideration for amended standards.

Expanding Accessibility and Affordability

These actions align with the Biden-Harris Administration’s focus on energy efficiency and consumer savings. They are part of a broader effort projected to provide nearly $1 trillion in consumer savings over 30 years and cumulatively reduce greenhouse gas emissions by 2.5 billion metric tons.

Additionally, the Inflation Reduction Act expands accessibility and affordability of heat pump water heaters through tax credits and rebates, supporting the transition to more efficient models. Consumers can access resources like DOE’s Energy Savings Hub for information on cost-saving benefits and clean energy incentives. The DOE’s Building Technologies Office oversees energy conservation standards for various appliances and equipment, further promoting energy efficiency.

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• Heat-Pump Water Heaters
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