New federal rule targets certain gas water heaters: Here’s what you should know

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(NEXSTAR) — A new rule from the Biden administration could limit the type of water heaters available to consumers in the coming years, posing a potential price hike for some, industry experts claim.

The new standards, published the day after Christmas, are meant to reduce costs and various emissions, and lead to a “significant conservation of energy,” the Department of Energy’s Office of Energy Efficiency and Renewable Energy, said.

Here’s what to know.

What is the new rule?

Essentially, the standards call for new tankless (sometimes called instantaneous) gas water heaters to use less energy than the least efficient models currently available, according to the Appliance Standards Awareness Project. The newly manufactured or imported gas water heaters will be required to use technology that wastes less heat — which, the group said, more than 60% of new water heaters already do.

Others could be pushed toward condensing technology, ASAP projected. Condensing water heaters are better equipped to reach the standards laid out by the DOE, the Washington Free Beacon explains, which could restrict non-condensing water heaters from the market.

A DOE spokesperson tells Nexstar that data shows nearly 70% of shipments of tankless gas water heaters today already contain condensing technology.

Compliance with the new standards is required by December 26, 2029.

Condensing vs. non-condensing gas water heaters

Tankless gas water heaters heat water using either a condensing or non-condensing method. The former usually has two heat exchangers while the latter has one, manufacturer Navien explains. Condensing water heaters will use the heat from the exhaust gas it produces (non-condensing models also produce exhaust gas) to heat incoming cold water, generally making them more energy efficient.

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Condensing models are often more expensive, larger, and heavier than non-condensing models, Navien says, and require annual maintenance.

Does this mean I need a new water heater?

No, and this is not a ban on water heaters or a limit on how much you can use your water heater either, the DOE tells Nexstar. Instead, the agency intends to make newly produced tankless gas water heaters that become available for sale in 2029 more efficient.

It could help you save some money and reduce environmental impacts, as well.

Switching from a less-efficient tankless water heater to a new gas tankless model could save consumers $112 over the product’s lifetime, the DOE estimated. The agency also estimates that 0.58 quadrillion British thermal units of energy could be saved, or about 1.9% “relative to the energy use of these products in the case without amended standards.”

There may be environmental benefits as well. Overall, emissions could be reduced, the DOE reported. Carbon dioxide, in particular, could drop by 32 million metric tons in the three decades after the final rule takes effect, the DOE estimated. Sulfur dioxide, nitrogen oxides, methane, and nitrous oxide emissions could also be reduced. A “small increase in electricity use,” could, however, lead to an increase of mercury emissions, equating to about 0.0004 tons.

What do the experts say?

Some industry experts have applauded the new standards.

“This is a common sense step that will lower total household costs while reducing planet-warming emissions,” Andrew deLaski, executive director of the Appliance Standards Awareness Project, said in a statement last month. “These long-awaited standards will ensure more families save with proven energy-efficient technology already used in a majority of tankless units.” 

Water heater manufacturers A.O. Smith, Bradford White, and Rheem all supported the standards, as did a major trade organization that represents such manufacturers, a DOE spokesperson tells Nexstar.

The American Gas Association disagreed with the DOE’s rule, mainly because it could lead to a lack of non-condensing tankless gas water heaters, which it notes are more affordable.

In a statement, Matthew Agen, the AGA’s chief counsel on energy, criticized the lack of savings for consumers that the DOE estimated and called its rule “unjustifiable on legal and practical grounds.”

Speaking with the Free Beacon, Frank Windsor, president of water heater manufacturer Rinnai America, said it’s the tank water heaters that should be targeted instead of the higher-efficiency tankless models.

Every six years, the DOE is expected to revisit the standards regarding appliances — like water heaters, HVAC systems, and plumbing products — under the Energy Policy and Conservation Act. It missed the initial deadline for this particular rule, which was April 2016, but entered into a consent decree that called for the final rule to be issued in December 2024.

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