Energy Conservation Program: Energy Conservation Standards for Consumer Water Heaters
Federal RegisterJul 28, 2023
Ask Donna
What actually matters in this document.
Text
DEPARTMENT OF ENERGY
10 CFR Parts 429 and 430
[EERE-2017-BT-STD-0019]
RIN 1904-AD91
Energy Conservation Program: Energy Conservation Standards for Consumer Water Heaters
AGENCY:
Office of Energy Efficiency and Renewable Energy, Department of Energy.
ACTION:
Notice of proposed rulemaking and announcement of public meeting.
SUMMARY:
The Energy Policy and Conservation Act, as amended (“EPCA”), prescribes energy conservation standards for various consumer products and certain commercial and industrial equipment, including consumer water heaters. EPCA also requires the U.S. Department of Energy (“DOE” or “the Department”) to periodically determine whether more-stringent standards would be technologically feasible and economically justified, and would result in significant energy savings. In this notice of proposed rulemaking (“NOPR”), DOE proposes amended energy conservation standards for consumer water heaters, and also announces a public meeting to receive comments on these proposed standards and associated analyses and results.
DATES:
Comments:
DOE will accept comments, data, and information regarding this NOPR no later than September 26, 2023.
Comments regarding the likely competitive impact of the proposed standard should be sent to the Department of Justice contact listed in the
ADDRESSES
section on or before August 28, 2023.
Meeting:
DOE will hold a public meeting via webinar on September 13, 2023, from 1:00 p.m. to 4:00 p.m. See section VII, “Public Participation,” for webinar registration information, participant instructions, and information about the capabilities available to webinar participants.
ADDRESSES:
Interested persons are encouraged to submit comments using the Federal eRulemaking Portal at
www.regulations.gov
under docket number EERE-2017-BT-STD-0019. Follow the instructions for submitting comments. Alternatively, interested persons may submit comments, identified by docket number EERE-2017-BT-STD-0019, by any of the following methods:
(1)
Email: ConsumerWaterHeaters2017STD0019@ee.doe.gov.
Include the docket number EERE-2017-BT-STD-0019 in the subject line of the message.
(2)
Postal Mail:
Appliance and Equipment Standards Program, U.S. Department of Energy, Building Technologies Office, Mailstop EE-5B, 1000 Independence Avenue SW, Washington, DC 20585-0121. Telephone: (202) 287-1445. If possible, please submit all items on a compact disc (“CD”), in which case it is not necessary to include printed copies.
(3)
Hand Delivery/Courier:
Appliance and Equipment Standards Program, U.S. Department of Energy, Building Technologies Office, 950 L'Enfant Plaza SW, 6th Floor, Washington, DC 20024. Telephone: (202) 287-1445. If possible, please submit all items on a CD, in which
case it is not necessary to include printed copies.
No telefacsimiles (“faxes”) will be accepted. For detailed instructions on submitting comments and additional information on this process, see section IV of this document.
Docket:
The docket for this activity, which includes
Federal Register
notices, comments, and other supporting documents/materials, is available for review at
www.regulations.gov
. All documents in the docket are listed in the
www.regulations.gov
index. However, not all documents listed in the index may be publicly available, such as information that is exempt from public disclosure.
The docket web page can be found at
www.regulations.gov/docket/EERE-2017-BT-STD-0019.
The docket web page contains instructions on how to access all documents, including public comments, in the docket. See section VII of this document for information on how to submit comments through
www.regulations.gov
.
EPCA requires the Attorney General to provide to DOE a written determination of whether the proposed standard is likely to lessen competition. The U.S. Department of Justice Antitrust Division invites input from market participants and other interested persons with views on the likely competitive impact of the proposed standard. Interested persons may contact the Division at
energy.standards@usdoj.gov
on or before the date specified in the
DATES
section. Please indicate in the “Subject” line of your email the title and Docket Number of this proposed rulemaking.
FOR FURTHER INFORMATION CONTACT:
Ms. Julia Hegarty, U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, Building Technologies Office, EE-5B, 1000 Independence Avenue SW, Washington, DC 20585-0121. Email:
ApplianceStandardsQuestions@ee.doe.gov
.
Ms. Melanie Lampton, U.S. Department of Energy, Office of the General Counsel, GC-33, 1000 Independence Avenue SW, Washington, DC 20585-0121. Telephone: (240) 751-5157. Email:
Melanie.Lampton@hq.doe.gov.
For further information on how to submit a comment, review other public comments and the docket, or participate in the public meeting, contact the Appliance and Equipment Standards Program staff at (202) 287-1445 or by email:
ApplianceStandardsQuestions@ee.doe.gov.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Synopsis of the Proposed Rule
A. Benefits and Costs to Consumers
B. Impact on Manufacturers
C. National Benefits and Costs
D. Conclusion
II. Introduction
A. Authority
B. Background
1. Current Standards
2. History of the Current Standards Rulemaking for Consumer Water Heaters
C. Deviation From Appendix A
III. General Discussion
A. Scope of Coverage
B. Test Procedure
C. Technological Feasibility
1. General
2. Maximum Technologically Feasible Levels
D. Energy Savings
1. Determination of Savings
2. Significance of Savings
E. Economic Justification
1. Specific Criteria
a. Economic Impact on Manufacturers and Consumers
b. Savings in Operating Costs Compared to Increase in Price (LCC and PBP)
c. Energy Savings
d. Lessening of Utility or Performance of Products
e. Impact of Any Lessening of Competition
f. Need for National Energy Conservation
g. Other Factors
2. Rebuttable Presumption
F. Interested Party Recommendations
IV. Methodology and Discussion of Related Comments
A. Market and Technology Assessment
1. Product Classes
a. Circulating Water Heater and Low-Temperature Water Heaters
b. Storage-Type and Instantaneous-Type Product Classes
c. Gas-Fired Water Heaters
d. Electric Storage Water Heaters
2. Technology Options
B. Screening Analysis
1. Screened-Out Technologies
2. Remaining Technologies
C. Engineering Analysis
1. Product Classes With Current UEF-Based Standards
a. Efficiency Analysis
b. Design Options
c. Cost Analysis
d. Shipping Costs
e. Cost-Efficiency Results
2. Product Classes Without Current UEF-Based Standards
3. Manufacturer Selling Price
D. Markups Analysis
E. Energy Use Analysis
1. Building Sample
2. Consumer Water Heater Sizing and Draw Pattern
3. Consumer Water Heater Energy Use Determination
4. Heat Pump Water Heater Energy Use Determination
F. Life-Cycle Cost and Payback Period Analysis
1. Product Cost
2. Installation Cost
a. Basic Installation Costs and Inputs
b. Gas-Fired and Oil-Fired Water Heater Installation Costs
c. Condensate Withdrawal for Higher Efficiency Design Options
d. Heat Pump Water Heater Installation Costs
3. Annual Energy Consumption
4. Energy Prices
5. Maintenance and Repair Costs
6. Product Lifetime
7. Discount Rates
8. Energy Efficiency Distribution in the No-New-Standards Case
9. Accounting for Product Switching Under Potential Standards
10. Payback Period Analysis
G. Shipments Analysis
1. Impact of Potential Standards on Shipments
a. Impact of Consumer Choice for Electric Storage Water Heaters
b. Impact of Repair vs. Replace
H. National Impact Analysis
1. Product Efficiency Trends
2. National Energy Savings
3. Net Present Value Analysis
I. Consumer Subgroup Analysis
1. Low-Income Households
J. Manufacturer Impact Analysis
1. Overview
2. Government Regulatory Impact Model and Key Inputs
a. Manufacturer Production Costs
b. Shipments Projections
c. Product and Capital Conversion Costs
d. Manufacturer Markup Scenarios
3. Manufacturer Interviews
a. Level of Investment Associated With Concurrent Technology Shifts
b. Lowboy Electric Storage Water Heaters
4. Discussion of MIA Comments
K. Emissions Analysis
1. Air Quality Regulations Incorporated in DOE's Analysis
L. Monetizing Emissions Impacts
1. Monetization of Greenhouse Gas Emissions
a. Social Cost of Carbon
b. Social Cost of Methane and Nitrous Oxide
2. Monetization of Other Emissions Impacts
M. Trial Standard Levels
N. Utility Impact Analysis
O. Employment Impact Analysis
V. Analytical Results and Conclusions
A. Economic Justification and Energy Savings
1. Economic Impacts on Individual Consumers
a. Life-Cycle Cost and Payback Period
b. Consumer Subgroup Analysis
c. Rebuttable Presumption Payback
2. Economic Impacts on Manufacturers
a. Industry Cash Flow Analysis Results
b. Direct Impacts on Employment
c. Impacts on Manufacturing Capacity
d. Impacts on Subgroups of Manufacturers
e. Cumulative Regulatory Burden
3. National Impact Analysis
a. Significance of Energy Savings
b. Net Present Value of Consumer Costs and Benefits
c. Indirect Impacts on Employment
4. Impact on Utility or Performance of Products
5. Impact of Any Lessening of Competition
6. Need of the Nation To Conserve Energy
7. Other Factors
8. Summary of Economic Impacts
B. Conclusion
1. Benefits and Burdens of TSLs Considered for Consumer Water Heater Standards
2. Annualized Benefits and Costs of the Proposed Standards
C. Test Procedure Applicability
1. Efficiency Determinations Using High Temperature Testing
2. Circulating Water Heaters
a. Storage Tank for Circulating Heat Pump Water Heaters
b. Product-Specific Enforcement Provisions for Circulating Water Heaters
3. Determination of Storage Volume for Water Heaters Less Than 2 Gallons
VI. Procedural Issues and Regulatory Review
A. Review Under Executive Orders 12866, 13563 and 14094
B. Review Under the Regulatory Flexibility Act
1. Description of Reasons Why Action Is Being Considered
2. Objectives of, and Legal Basis for, Rule
3. Description on Estimated Number of Small Entities Regulated
4. Description and Estimate of Compliance Requirements Including Differences in Cost, if Any, for Different Groups of Small Entities
5. Duplication, Overlap, and Conflict With Other Rules and Regulations
6. Significant Alternatives to the Rule
C. Review Under the Paperwork Reduction Act
D. Review Under the National Environmental Policy Act of 1969
E. Review Under Executive Order 13132
F. Review Under Executive Order 12988
G. Review Under the Unfunded Mandates Reform Act of 1995
H. Review Under the Treasury and General Government Appropriations Act, 1999
I. Review Under Executive Order 12630
J. Review Under the Treasury and General Government Appropriations Act, 2001
K. Review Under Executive Order 13211
L. Information Quality
VII. Public Participation
A. Attendance at the Public Meeting
B. Procedure for Submitting Prepared General Statements for Distribution
C. Conduct of the Public Meeting Webinar
D. Submission of Comments
E. Issues on Which DOE Seeks Comment
VIII. Approval of the Office of the Secretary
I. Synopsis of the Proposed Rule
The Energy Policy and Conservation Act,
1
as amended, Public Law 94-163 (42 U.S.C. 6291-6317, as codified) authorizes DOE to regulate the energy efficiency of a number of consumer products and certain industrial equipment. Title III, Part B of EPCA
2
established the Energy Conservation Program for Consumer Products Other Than Automobiles. (42 U.S.C. 6291-6309) These products include consumer water heaters, the subject of this proposed rulemaking.
1
All references to EPCA in this document refer to the statute as amended through the Energy Act of 2020, Public Law 116-260 (Dec. 27, 2020), which reflect the last statutory amendments that impact Parts A and A-1 of EPCA.
2
For editorial reasons, upon codification in the U.S. Code, Part B was redesignated Part A.
Pursuant to EPCA, any new or amended energy conservation standard must be designed to achieve the maximum improvement in energy efficiency that DOE determines is technologically feasible and economically justified. (42 U.S.C. 6295(o)(2)(A)) Furthermore, the new or amended standard must result in a significant conservation of energy. (42 U.S.C. 6295(o)(3)(B)) EPCA also provides that not later than 6 years after issuance of any final rule establishing or amending a standard, DOE must publish either a notice of determination that standards for the product do not need to be amended, or a notice of proposed rulemaking including new proposed energy conservation standards (proceeding to a final rule, as appropriate). (42 U.S.C. 6295(m))
In accordance with these and other statutory provisions discussed in this document, DOE proposes new and amended energy conservation standards for consumer water heaters. The proposed standards, which are expressed in terms of uniform energy factor (“UEF”), are shown in Table I.1. These proposed standards, if adopted, would apply to all consumer water heaters listed in Table I.1 manufactured in, or imported into, the United States starting on the date 5 years after the
publication of the final rule for this proposed rulemaking.
Table I.1—Proposed Energy Conservation Standards for Consumer Water Heaters
Product class
Effective storage volume and input rating *
(if applicable)
Draw pattern
Uniform energy factor
Gas-fired Storage Water Heater
<20 gal
Very Small
0.2062−(0.0020 × V
eff
)
Low
0.4893−(0.0027 × V
eff
)
Medium
0.5758−(0.0023 × V
eff
)
High
0.6586−(0.0020 × V
eff
)
≥20 gal and ≤55 gal
Very Small
0.3925−(0.0020 × V
eff
)
Low
0.6451−(0.0019 × V
eff
)
Medium
0.7046−(0.0017 × V
eff
)
High
0.7424−(0.0013 × V
eff
)
>55 gal and ≤100 gal
Very Small
0.6470−(0.0006 × V
eff
)
Low
0.7689−(0.0005 × V
eff
)
Medium
0.7897−(0.0004 × V
eff
)
High
0.8072−(0.0003 × V
eff
)
>100 gal
Very Small
0.1482−(0.0007 × V
eff
)
Low
0.4342−(0.0017 × V
eff
)
Medium
0.5596−(0.0020 × V
eff
)
High
0.6658−(0.0019 × V
eff
)
Oil-fired Storage Water Heater
≤50 gal
Very Small
0.2909−(0.0012 × V
eff
)
Low
0.5730−(0.0016 × V
eff
)
Medium
0.6478−(0.0016 × V
eff
)
High
0.7215−(0.0014 × V
eff
)
>50 gal
Very Small
0.1580−(0.0009 × V
eff
)
Low
0.4390−(0.0020 × V
eff
)
Medium
0.5389−(0.0021 × V
eff
)
High
0.6172−(0.0018 × V
eff
)
Very Small Electric Storage Water Heater
<20 gal
Very Small
Low
0.5925−(0.0059 × V
eff
)
0.8642−(0.0030 × V
eff
)
Medium
0.9096−(0.0020 × V
eff
)
High
0.9430−(0.0012 × V
eff
)
Small Electric Storage Water Heater
≥20 gal and ≤35 gal
Very Small
0.8808−(0.0008 × V
eff
)
Low
0.9254−(0.0003 × V
eff
)
Electric Storage Water Heaters
>20 and ≤55 gal (excluding small electric storage water heaters)
Very Small
Low
2.30
2.30
Medium
2.30
High
2.30
>55 gal and ≤120 gal
Very Small
2.50
Low
2.50
Medium
2.50
High
2.50
>120 gal
Very Small
0.3574−(0.0012 × V
eff
)
Low
0.7897−(0.0019 × V
eff
)
Medium
0.8884−(0.0017 × V
eff
)
High
0.9575−(0.0013 × V
eff
)
Tabletop Water Heater
<20 gal
Very Small
0.5925−(0.0059 × V
eff
)
Low
0.8642−(0.0030 × V
eff
)
≥20 gal and ≤120 gal
Very Small
0.6323−(0.0058 × V
eff
)
Low
0.9188−(0.0031 × V
eff
)
Instantaneous Gas-fired Water Heater
<2 gal and ≤50,000 Btu/h
Very Small
0.64
Low
0.64
Medium
0.64
High
0.64
<2 gal and >50,000 Btu/h
Very Small
0.89
Low
0.91
Medium
0.91
High
0.93
≥2 gal and ≤200,000 Btu/h
Very Small
0.2534−(0.0018 × V
eff
)
Low
0.5226−(0.0022 × V
eff
)
Medium
0.5919−(0.0020 × V
eff
)
High
0.6540−(0.0017 × V
eff
)
Instantaneous Oil-fired Water Heater
<2 gal and ≤210,000 Btu/h
Very Small
0.61
Low
0.61
Medium
0.61
High
0.61
≥2 gal and ≤210,000 Btu/h
Very Small
0.2780−(0.0022 × V
eff
)
Low
0.5151−(0.0023 × V
eff
)
Medium
0.5687−(0.0021 × V
eff
)
High
0.6147−(0.0017 × V
eff
)
Instantaneous Electric Water Heater
<2 gal
Very Small
0.91
Low
0.91
Medium
0.91
High
0.92
≥2 gal
Very Small
0.8086−(0.0050 × V
eff
)
Low
0.9123−(0.0020 × V
eff
)
Medium
0.9252−(0.0015 × V
eff
)
High
0.9350−(0.0011 × V
eff
)
Grid-Enabled Water Heater
>75 gal
Very Small
1.0136−(0.0028 × V
eff
)
Low
0.9984−(0.0014 × V
eff
)
Medium
0.9853−(0.0010 × V
eff
)
High
0.9720−(0.0007 × V
eff
)
Gas-fired Circulating Water Heater
≤200,000 Btu/h
Very Small
0.8000−(0.0011 × V
eff
)
Low
0.8100−(0.0011 × V
eff
)
Medium
0.8100−(0.0011 × V
eff
)
High
0.8100−(0.0011 × V
eff
)
Oil-fired Circulating Water Heater
≤210,000 Btu/h
Very Small
0.6100−(0.0011 × V
eff
)
Low
0.6100−(0.0011 × V
eff
)
Medium
0.6100−(0.0011 × V
eff
)
High
0.6100−(0.0011 × V
eff
)
Electric Circulating Water Heater
≤12 kW; for heat pump type units ≤24 A at ≤250 V
Very Small
0.9100−(0.0011 × V
eff
)
Low
0.9100−(0.0011 × V
eff
)
Medium
0.9100−(0.0011 × V
eff
)
High
0.9200−(0.0011 × V
eff
)
* Effective storage volume is the representative value of storage volume as determined in accordance with the DOE test procedure at appendix E to subpart B of 10 CFR part 430 and applicable sampling plans.
A. Benefits and Costs to Consumers
Table I.2 presents DOE's evaluation of the economic impacts of the proposed standards on consumers of consumer water heaters, as measured by the average life-cycle cost (“LCC”) savings and the simple payback period (“PBP”).
3
The average LCC savings are positive for all product classes, and the PBP is less than the average lifetime of consumer water heaters, which is estimated to be 15 years for storage and 20 years for instantaneous water heaters (see section IV.F of this document).
3
The average LCC savings refer to consumers that are affected by a standard and are measured relative to the efficiency distribution in the no-new-standards case, which depicts the market in the compliance year in the absence of new or amended standards (see section IV.F.8 of this document). The simple PBP, which is designed to compare specific efficiency levels, is measured relative to the baseline product (see section IV.F.9 of this document).
Table I.2—Impacts of Proposed Energy Conservation Standards on Consumers of Consumer Water Heaters
Product class
Effective storage volume and input rating
(if applicable)
Average LCC savings
(2022$)
Simple payback
(years)
Gas-fired Storage Water Heater
≥20 gal and ≤55 gal
52
7.9
Oil-fired Storage Water Heater
≤50 gal
165
6.4
Electric Storage Water Heaters *
≥20 gal and ≤55 gal (excluding Small ESWHs)
1,868
3.0
>55 gal and ≤120 gal
501
0.2
Instantaneous Gas-fired Water Heater
<2 gal and >50,000 Btu/h and <200,000 Btu/h
135
5.9
* DOE is not proposing amended standards for small electric storage water heaters (
i.e.,
electric storage water heaters greater than or equal to 20 gallons but less than 35 gallons in effective storage volume, with first-hour ratings less than 51 gallons), so those products are not impacted by the proposed rule.
DOE's analysis of the impacts of the proposed standards on consumers is described in section IV.F of this document.
B. Impact on Manufacturers
The industry net present value (“INPV”) is the sum of the discounted cash flows to the industry from the base year through the end of the analysis period (2023-2059). Using a real discount rate of 9.6 percent, DOE estimates that the INPV for manufacturers of consumer water heaters in the case without amended standards is $2,554.7 million in 2022$. Under the proposed standards, the change in INPV is estimated to range from negative 8.1 percent to positive 6.5 percent, which is a loss of $207.3 million to a gain of $165.5 million. In order to bring products into compliance with amended standards, it is estimated that the industry would incur total conversion costs of $228.1 million.
DOE's analysis of the impacts of the proposed standards on manufacturers is described in section IV.J of this document. The analytic results of the manufacturer impact analysis (“MIA”) are presented in section V.B.2 of this document.
C. National Benefits and Costs
4
4
All monetary values in this document are expressed in 2022 dollars.
DOE's analyses indicate that the proposed energy conservation standards for consumer water heaters would save a significant amount of energy. Relative
to the case without amended standards, the lifetime energy savings for consumer water heaters purchased in the 30-year period that begins in the anticipated year of compliance with the amended standards (2030-2059) amount to 27 quadrillion British thermal units (“Btu”), or quads.
5
This represents a savings of 21 percent relative to the energy use of these products in the case without amended standards (referred to as the “no-new-standards case”).
5
The quantity refers to full-fuel-cycle (“FFC”) energy savings. FFC energy savings includes the energy consumed in extracting, processing, and transporting primary fuels (
i.e.,
coal, natural gas, petroleum fuels), and, thus, presents a more complete picture of the impacts of energy efficiency standards. For more information on the FFC metric, see section IV.H.1 of this document.
The cumulative net present value (“NPV”) of total consumer benefits of the proposed standards for consumer water heaters are $56 billion at a 7-percent discount rate and $161 billion at a 3-percent discount rate. This NPV expresses the estimated total value of future operating-cost savings minus the estimated increased product and installation costs for consumer water heaters purchased in 2030-2059.
In addition, the proposed standards for consumer water heaters are projected to yield significant environmental benefits. DOE estimates that the proposed standards would result in cumulative emission reductions (over the same period as for energy savings, 2030-2059) of 501 million metric tons (“Mt”)
6
of carbon dioxide (“CO
2
”), 143 thousand tons of sulfur dioxide (“SO
2
”), 988 thousand tons of nitrogen oxides (“NO
X
”), 4,541 thousand tons of methane (“CH
4
”), 4.6 thousand tons of nitrous oxide (“N
2
O”), and 1.0 tons of mercury (“Hg”).
7
6
A metric ton is equivalent to 1.1 short tons. Results for emissions other than CO
2
are presented in short tons.
7
DOE calculated emissions reductions relative to the no-new-standards case, which reflects key assumptions in the
Annual Energy Outlook 2023
(“
AEO2023
”).
AEO2023
represents current federal and state legislation and final implementation of regulations as of the time of its preparation. See section IV.K of this document for further discussion of
AEO2023
assumptions that effect air pollutant emissions. The
AEO 2023
reflects the impact of the Inflation Reduction Act.
DOE estimates the value of climate benefits from a reduction in greenhouse gases (“GHG”) using four different estimates of the social cost of CO
2
(“SC-CO
2
”), the social cost of methane (“SC-CH
4
”), and the social cost of nitrous oxide (“SC-N
2
O”). Together these represent the social cost of GHG (“SC-GHG”).”).
8
DOE used interim SC-GHG values developed by an Interagency Working Group on the Social Cost of Greenhouse Gases (“IWG”).
9
The derivation of these values is discussed in section IV.L of this document. For presentational purposes, the climate benefits associated with the average SC-GHG at a 3-percent discount rate are estimated to be $25 billion. DOE does not have a single central SC-GHG point estimate and it emphasizes the importance and value of considering the benefits calculated using all four sets of SC-GHG estimates.
8
To monetize the benefits of reducing greenhouse gas emissions this analysis uses the interim estimates presented in the
Technical Support Document: Social Cost of Carbon, Methane, and Nitrous Oxide Interim Estimates Under Executive Order 13990
published in February 2021 by the Interagency Working Group on the Social Cost of Greenhouse Gases (IWG).
9
See Interagency Working Group on Social Cost of Greenhouse Gases, Technical Support Document: Social Coast of Carbon, Methane, and Nitrous Oxide. Interim Estimates Under Executive Order 13990, Washington, DC, February 2021 (“February 2021 SC-GHG TSD”).
www.whitehouse.gov/wp-content/uploads/2021/02/TechnicalSupportDocument_SocialCostofCarbonMethaneNitrousOxide.pdf
.
DOE estimated the monetary health benefits of SO
2
and NO
X
emissions reductions using benefit per ton estimates from the scientific literature, as discussed in section IV.L of this document. DOE estimated the present value of the health benefits would be $17 billion using a 7-percent discount rate, and $49 billion using a 3-percent discount rate.
10
DOE is currently only monetizing (for SO
2
and NO
X
) PM
2.5
precursor health benefits and (for NO
X
) ozone precursor health benefits, but will continue to assess the ability to monetize other effects such as health benefits from reductions in direct PM
2.5
emissions.
10
DOE estimates the economic value of these emissions reductions resulting from the considered TSLs for the purpose of complying with the requirements of Executive Order 12866.
Table I.3 summarizes the economic benefits and costs expected to result from the proposed standards for consumer water heaters. There are other important unquantified effects, including certain unquantified climate benefits, unquantified public health benefits from the reduction of toxic air pollutants and other emissions, unquantified energy security benefits, and distributional effects, among others.
Table I.3—Summary of Monetized Benefits and Costs of Proposed Energy Conservation Standards for Consumer Water Heaters
[TSL 2]
Billion 2022$
3% discount rate
Consumer Operating Cost Savings
198
Climate Benefits *
25
Health Benefits **
49
Total Monetized Benefits †
271
Consumer Incremental Product Costs ‡
36
Net Monetized Benefits
235
Change in Producer Cashflow (INPV ††)
(0.2)−0.2
7% discount rate
Consumer Operating Cost Savings
75
Climate Benefits * (3% discount rate)
25
Health Benefits **
17
Total Monetized Benefits †
117
Consumer Incremental Product Costs ‡
19
Net Monetized Benefits
98
Change in Producer Cashflow (INPV ††)
(0.2)−0.2
Note:
This table presents the monetized costs and benefits associated with consumer water heaters shipped in 2030-2059. These results include benefits to consumers which accrue after 2059 from the products shipped in 2030-2059.
* Climate benefits are calculated using four different estimates of the social cost of carbon (SC-CO
2
), methane (SC-CH
4
), and nitrous oxide (SC-N
2
O) (model average at 2.5-percent, 3-percent, and 5-percent discount rates; 95th percentile at 3-percent discount rate) (see section IV.L of this document). Together these represent the global SC-GHG. For presentational purposes of this table, the climate benefits associated with the average SC-GHG at a 3-percent discount rate are shown, but DOE does not have a single central SC-GHG point estimate. To monetize the benefits of reducing greenhouse gas emissions this analysis uses the interim estimates presented in the
Technical Support Document: Social Cost of Carbon, Methane, and Nitrous Oxide Interim Estimates Under Executive Order 13990
published in February 2021 by the Interagency Working Group on the Social Cost of Greenhouse Gases (IWG).
** Health benefits are calculated using benefit-per-ton values for NO
X
and SO
2
. DOE is currently only monetizing (for SO
2
and NO
X
) PM
2.5
precursor health benefits and (for NO
X
) ozone precursor health benefits, but will continue to assess the ability to monetize other effects such as health benefits from reductions in direct PM
2.5
emissions. See section IV.L of this document for more details.
† Total and net benefits include those consumer, climate, and health benefits that can be quantified and monetized. For presentation purposes, total and net benefits for both the 3-percent and 7-percent cases are presented using the average SC-GHG with 3-percent discount rate, but DOE does not have a single central SC-GHG point estimate. DOE emphasizes the importance and value of considering the benefits calculated using all four sets of SC-GHG estimates.
‡ Costs include incremental equipment costs as well as installation costs.
†† Operating Cost Savings are calculated based on the life cycle costs analysis and national impact analysis as discussed in detail below. See sections IV.F and IV.H. DOE's NIA includes all impacts (both costs and benefits) along the distribution chain beginning with the increased costs to the manufacturer to manufacture the product and ending with the increase in price experienced by the consumer. DOE also separately conducts a detailed analysis on the impacts on manufacturers (the MIA). See section IV.J. In the detailed MIA, DOE models manufacturers' pricing decisions based on assumptions regarding investments, conversion costs, cashflow, and margins. The MIA produces a range of impacts, which is the rule's expected impact on the industry net present value (INPV). The change in industry NPV is the present value of all changes in industry cash flow, including changes in production costs, capital expenditures, and manufacturer profit margins. Change in INPV is calculated using the industry weighted average cost of capital value of 9.6% that is estimated in the manufacturer impact analysis (see chapter 12 of the NOPR TSD for a complete description of the industry weighted average cost of capital). For consumer water heaters, those values are −$207 million and $166 million. DOE accounts for that range of likely impacts in analyzing whether a TSL is economically justified. See section V.A of this document. DOE is presenting the range of impacts to the industry net present value under two markup scenarios: the Preservation of Gross Margin scenario, which is the manufacturer markup scenario used in the calculation of Consumer Operating Cost Savings in this table, and the Preservation of Operating Profit Markup scenario, where DOE assumed manufacturers would not be able to increase per-unit operating profit in proportion to increases in manufacturer production costs. DOE includes the range of estimated INPV in the above table, drawing on the MIA explained further in Section IV.J, to provide additional context for assessing the estimated impacts of this proposal to society, including potential changes in production and consumption, which is consistent with OMB's Circular A-4 and E.O. 12866. If DOE were to include the industry net present value into the net benefit calculation for this proposed rule, the net benefits would be $235 billion at 3-percent discount rate and $98 billion at 7-percent discount rate. DOE seeks comment on this approach.
The benefits and costs of the proposed standards can also be expressed in terms of annualized values. The monetary values for the total annualized net benefits are (1) the reduced consumer operating costs, minus (2) the increase in product purchase prices and installation costs, plus (3) the monetized value of climate and health benefits of emission reductions, all annualized.
11
11
To convert the time-series of costs and benefits into annualized values, DOE calculated a present value in 2022, the year used for discounting the NPV of total consumer costs and savings. For the benefits, DOE calculated a present value associated with each year's shipments in the year in which the shipments occur (
e.g.,
2030), and then discounted the present value from each year to 2022. Using the present value, DOE then calculated the fixed annual payment over a 30-year period, starting in the compliance year, that yields the same present value.
The national operating cost savings are domestic private U.S. consumer monetary savings that occur as a result of purchasing the covered products and are measured for the lifetime of consumer water heaters shipped in 2030-2059. The benefits associated with reduced emissions achieved as a result of the proposed standards are also calculated based on the lifetime of consumer water heaters shipped in 2030-2059. Total benefits for both the 3-percent and 7-percent cases are presented using the average GHG social costs with 3-percent discount rate. Estimates of SC-GHG values are presented for all four discount rates in section IV.L.1 of this document.
Table I.4 presents the total estimated monetized benefits and costs associated with the proposed standard, expressed in terms of annualized values. The results under the primary estimate are as follows.
Using a 7-percent discount rate for consumer benefits and costs and health benefits from reduced NO
X
and SO
2
emissions, and the 3-percent discount rate case for climate benefits from reduced GHG emissions, the estimated cost of the standards proposed in this rule is $2,235 million per year in increased equipment costs, while the estimated annual benefits are $7,876 million in reduced equipment operating costs, $1,429 million in monetized climate benefits, and $1,805 million in monetized health benefits. In this case, the net monetized benefit would amount to $8,875 million per year.
Using a 3-percent discount rate for all benefits and costs, the estimated cost of the proposed standards is $2,420 million per year in increased equipment costs, while the estimated annual benefits are $11,357 million in reduced operating costs, $1,429 million in monetized climate benefits, and $2,798 million in monetized health benefits. In this case, the net monetized benefit would amount to $13,164 million per year.
Table I.4—Annualized Benefits and Costs of Proposed Energy Conservation Standards for Consumer Water Heaters
[TSL 2]
Billion 2022$/year
Primary
estimate
Low-net-
benefits
estimate
High-net-
benefits
estimate
3% discount rate
Consumer Operating Cost Savings
11.357
10.633
12.096
Climate Benefits *
1.429
1.412
1.446
Health Benefits **
2.798
2.764
2.832
Total Monetized Benefits †
15.584
14.809
16.374
Consumer Incremental Product Costs ‡
2.420
2.488
2.356
Net Monetized Benefits
13.164
12.321
14.018
Change in Producer Cashflow (INPV ††)
(0.021)−0.017
(0.021)−0.017
(0.021)−0.017
7% discount rate
Consumer Operating Cost Savings
7.876
7.380
8.382
Climate Benefits * (3% discount rate)
1.429
1.412
1.446
Health Benefits **
1.805
1.784
1.825
Total Monetized Benefits †
11.110
10.576
11.653
Consumer Incremental Product Costs ‡
2.235
2.290
2.183
Net Monetized Benefits
8.875
8.286
9.470
Change in Producer Cashflow (INPV ††)
(0.021)−0.017
(0.021)−0.017
(0.021)−0.017
Note:
This table presents the costs and benefits associated with consumer water heaters shipped in 2030-2059. These results include benefits to consumers which accrue after 2059 from the products shipped in 2030-2059. The Primary, Low Net Benefits, and High Net Benefits Estimates utilize projections of energy prices from the AEO2023 Reference case, Low Economic Growth case, and High Economic Growth case, respectively. In addition, incremental equipment costs reflect a medium decline rate in the Primary Estimate, a low decline rate in the Low Net Benefits Estimate, and a high decline rate in the High Net Benefits Estimate. The methods used to derive projected price trends are explained in sections IV.F.1 and IV.F.4 of this document. Note that the Benefits and Costs may not sum to the Net Benefits due to rounding.
* To monetize the benefits of reducing greenhouse gas emissions this analysis uses the interim estimates presented in the
Technical Support Document: Social Cost of Carbon, Methane, and Nitrous Oxide Interim Estimates Under Executive Order 13990
published in February 2021 by the Interagency Working Group on the Social Cost of Greenhouse Gases (IWG). Climate benefits are calculated using four different estimates of the global SC-GHG (see section IV.L of this document). For presentational purposes of this table, the climate benefits associated with the average SC-GHG at a 3-percent discount rate are shown, but the Department does not have a single central SC-GHG point estimate, and it emphasizes the importance and value of considering the benefits calculated using all four sets of SC-GHG estimates.
** Health benefits are calculated using benefit-per-ton values for NO
X
and SO
2
. DOE is currently only monetizing (for SO
2
and NO
X
) PM
2.5
precursor health benefits and (for NO
X
) ozone precursor health benefits, but will continue to assess the ability to monetize other effects such as health benefits from reductions in direct PM
2.5
emissions. See section IV.L of this document for more details.
† Total benefits for both the 3-percent and 7-percent cases are presented using the average SC-GHG with 3-percent discount rate, but the Department does not have a single central SC-GHG point estimate.
‡ Costs include incremental equipment costs as well as installation costs.
†† Operating Cost Savings are calculated based on the life cycle costs analysis and national impact analysis as discussed in detail below. See sections IV.F and IV.H of this document. DOE's NIA includes all impacts (both costs and benefits) along the distribution chain beginning with the increased costs to the manufacturer to manufacture the product and ending with the increase in price experienced by the consumer. DOE also separately conducts a detailed analysis on the impacts on manufacturers (the MIA). See section IV.J. In the detailed MIA, DOE models manufacturers' pricing decisions based on assumptions regarding investments, conversion costs, cashflow, and margins. The MIA produces a range of impacts, which is the rule's expected impact on the industry net present value (INPV). The change in industry NPV is the present value of all changes in industry cash flow, including changes in production costs, capital expenditures, and manufacturer profit margins. Change in INPV is calculated using the industry weighted average cost of capital value of 9.6% that is estimated in the manufacturer impact analysis (see chapter 12 of the NOPR TSD for a complete description of the industry weighted average cost of capital). For consumer water heaters, those values are −$21 million and $17 million. DOE accounts for that range of likely impacts in analyzing whether a TSL is economically justified. See section V.A of this document. DOE is presenting the range of impacts to the industry net present value under two markup scenarios: the Preservation of Gross Margin scenario, which is the manufacturer markup scenario used in the calculation of Consumer Operating Cost Savings in this table, and the Preservation of Operating Profit Markup scenario, where DOE assumed manufacturers would not be able to increase per-unit operating profit in proportion to increases in manufacturer production costs. DOE includes the range of estimated INPV in the above table, drawing on the MIA explained further in Section IV.J, to provide additional context for assessing the estimated impacts of this proposal to society, including potential changes in production and consumption, which is consistent with OMB's Circular A-4 and E.O. 12866. If DOE were to include the industry net present value into the net benefit calculation for this proposed rule, the net benefits would range from $13.143 billion to $13.181 billion at 3-percent discount rate and range from $8.854 billion to $8.892 billion at 7-percent discount rate. DOE seeks comment on this approach.
DOE's analysis of the national impacts of the proposed standards is described in sections IV.H, IV.K and IV.L of this document.
D. Conclusion
DOE has tentatively concluded that the proposed standards represent the maximum improvement in energy efficiency that is technologically feasible and economically justified, and would result in the significant conservation of energy. Specifically, with regards to technological feasibility, products achieving these proposed standard levels are already commercially available for all product classes covered by this proposal. As for economic justification, DOE's analysis shows that the benefits of the proposed standards exceed the burdens of the proposed standards.
Using a 7-percent discount rate for consumer benefits and costs and NO
X
and SO
2
reduction benefits, and a 3-percent discount rate case for GHG social costs, the estimated cost of the proposed standards for consumer water heaters is $2,235 million per year in increased product costs, while the
estimated annual benefits are $7,876 million in reduced product operating costs, $1,429 million in monetized climate benefits and $1,805 million in monetized health benefits. The net monetized benefit amounts to $8,875 million per year.
The significance of energy savings offered by a new or amended energy conservation standard cannot be determined without knowledge of the specific circumstances surrounding a given rulemaking.
12
For example, some covered products and equipment have substantial energy consumption occur during periods of peak energy demand. The impacts of these products on the energy infrastructure can be more pronounced than products with relatively constant demand. Accordingly, DOE evaluates the significance of energy savings on a case-by-case basis.
12
Procedures, Interpretations, and Policies for Consideration in New or Revised Energy Conservation Standards and Test Procedures for Consumer Products and Commercial/Industrial Equipment, 86 FR 70892, 70901 (Dec. 13, 2021).
As previously mentioned, the standards are projected to result in estimated national energy savings of 27 quad FFC. In addition, they are projected to reduce CO
2
emissions by 501 Mt, the equivalent of the annual CO
2
emissions of 2.1 million homes over 30 years. Based on these findings, DOE has initially determined the energy savings from the proposed standard levels are “significant” within the meaning of 42 U.S.C. 6295(o)(3)(B). A more detailed discussion of the basis for these tentative conclusions is contained in the remainder of this document and the accompanying technical support document (“TSD”).
DOE also considered more-stringent energy efficiency levels as potential standards, and is still considering them in this rulemaking. However, DOE has tentatively concluded that the potential burdens of the more-stringent energy efficiency levels would outweigh the projected benefits.
Based on consideration of the public comments DOE receives in response to this document and related information collected and analyzed during the course of this rulemaking effort, DOE may adopt energy efficiency levels presented in this document that are either higher or lower than the proposed standards, or some combination of level(s) that incorporate the proposed standards in part.
II. Introduction
The following section briefly discusses the statutory authority underlying this proposed rule, as well as some of the relevant historical background related to the establishment of standards for consumer water heaters.
A. Authority
EPCA authorizes DOE to regulate the energy efficiency of a number of consumer products and certain industrial equipment. Title III, Part B of EPCA established the Energy Conservation Program for Consumer Products Other Than Automobiles. These products include consumer water heaters, the subject of this document. (42 U.S.C. 6292(a)(4))
EPCA prescribed energy conservation standards for these products (42 U.S.C. 6295(e)(1)), and directed DOE to conduct two cycles of rulemakings
13
to determine whether to amend these standards. (42 U.S.C. 6295(e)(4)) EPCA further provides that, not later than 6 years after the issuance of any final rule establishing or amending a standard, DOE must publish either a notice of determination that standards for the product do not need to be amended, or a NOPR including new proposed energy conservation standards (proceeding to a final rule, as appropriate). (42 U.S.C. 6295(m)(1))
13
DOE completed the first of these rulemaking cycles on January 17, 2001, by publishing in the
Federal Register
a final rule amending the energy conservation standards for consumer water heaters. 66 FR 4474. Subsequently, DOE completed the second rulemaking cycle to amend the standards for consumer water heaters by publishing a final rule in the
Federal Register
on April 16, 2010. 75 FR 20112.
The energy conservation program under EPCA consists essentially of four parts: (1) testing, (2) labeling, (3) the establishment of Federal energy conservation standards, and (4) certification and enforcement procedures. Relevant provisions of EPCA specifically include definitions (42 U.S.C. 6291), test procedures (42 U.S.C. 6293), labeling provisions (42 U.S.C. 6294), energy conservation standards (42 U.S.C. 6295), and the authority to require information and reports from manufacturers (42 U.S.C. 6296).
Federal energy efficiency requirements for covered products established under EPCA generally supersede State laws and regulations concerning energy conservation testing, labeling, and standards. (42 U.S.C. 6297(a)-(c)) DOE may, however, grant waivers of Federal preemption for particular State laws or regulations, in accordance with the procedures and other provisions set forth under EPCA. (See 42 U.S.C. 6297(d))
Subject to certain criteria and conditions, DOE is required to develop test procedures to measure the energy efficiency, energy use, or estimated annual operating cost of each covered product. (42 U.S.C. 6295(o)(3)(A) and 42 U.S.C. 6295(r)) Manufacturers of covered products must use the prescribed DOE test procedure as the basis for certifying to DOE that their products comply with the applicable energy conservation standards adopted under EPCA and when making representations to the public regarding the energy use or efficiency of those products. (42 U.S.C. 6293(c) and 42 U.S.C. 6295(s)) Similarly, DOE must use these test procedures to determine whether the products comply with standards adopted pursuant to EPCA. (42 U.S.C. 6295(s)) The DOE test procedures for consumer water heaters appear at title 10 of the Code of Federal Regulations (“CFR”) part 430, subpart B, appendix E (“appendix E”).
DOE must follow specific statutory criteria for prescribing new or amended standards for covered products, including consumer water heaters. Any new or amended standard for a covered product must be designed to achieve the maximum improvement in energy efficiency that the Secretary of Energy determines is technologically feasible and economically justified. (42 U.S.C. 6295(o)(2)(A) and 42 U.S.C. 6295(o)(3)(B)) Furthermore, DOE may not adopt any standard that would not result in the significant conservation of energy. (42 U.S.C. 6295(o)(3))
Moreover, DOE may not prescribe a standard: (1) for certain products, including consumer water heaters, if no test procedure has been established for the product, or (2) if DOE determines by rule that the standard is not technologically feasible or economically justified. (42 U.S.C. 6295(o)(3)(A)-(B)) In deciding whether a proposed standard is economically justified, DOE must determine whether the benefits of the standard exceed its burdens. (42 U.S.C. 6295(o)(2)(B)(i)) DOE must make this determination after receiving comments on the proposed standard, and by considering, to the greatest extent practicable, the following seven statutory factors:
(1) The economic impact of the standard on manufacturers and consumers of the products subject to the standard;
(2) The savings in operating costs throughout the estimated average life of the covered products in the type (or class) compared to any increase in the price, initial charges, or maintenance expenses for the covered products that are likely to result from the standard;
(3) The total projected amount of energy (or as applicable, water) savings likely to result directly from the standard;
(4) Any lessening of the utility or the performance of the covered products likely to result from the standard;
(5) The impact of any lessening of competition, as determined in writing by the Attorney General, that is likely to result from the standard;
(6) The need for national energy and water conservation; and
(7) Other factors the Secretary of Energy (“Secretary”) considers relevant.
(42 U.S.C. 6295(o)(2)(B)(i)(I)-(VII))
Further, EPCA establishes a rebuttable presumption that a standard is economically justified if the Secretary finds that the additional cost to the consumer of purchasing a product complying with an energy conservation standard level will be less than three times the value of the energy savings that the consumer will receive during the first year as a result of the standard, as calculated under the applicable test procedure. (42 U.S.C. 6295(o)(2)(B)(iii))
EPCA also contains what is known as an “anti-backsliding” provision, which prevents the Secretary from prescribing any amended standard that either increases the maximum allowable energy use or decreases the minimum required energy efficiency of a covered product. (42 U.S.C. 6295(o)(1)) Also, the Secretary may not prescribe an amended or new standard if interested persons have established by a preponderance of the evidence that the standard is likely to result in the unavailability in the United States in any covered product type (or class) of performance characteristics (including reliability), features, sizes, capacities, and volumes that are substantially the same as those generally available in the United States. (42 U.S.C. 6295(o)(4))
Additionally, EPCA specifies requirements when promulgating an energy conservation standard for a covered product that has two or more subcategories. DOE must specify a different standard level for a type or class of product that has the same function or intended use if DOE determines that products within such group: (A) consume a different kind of energy from that consumed by other covered products within such type (or class); or (B) have a capacity or other performance-related feature which other products within such type (or class) do not have and such feature justifies a higher or lower standard. (42 U.S.C. 6295(q)(1)) In determining whether a performance-related feature justifies a different standard for a group of products, DOE must consider such factors as the utility to the consumer of the feature and other factors DOE deems appropriate.
Id.
Any rule prescribing such a standard must include an explanation of the basis on which such higher or lower level was established. (42 U.S.C. 6295(q)(2))
Finally, pursuant to the amendments contained in the Energy Independence and Security Act of 2007 (“EISA 2007”), Public Law 110-140, any final rule for new or amended energy conservation standards promulgated after July 1, 2010, is required to address standby mode and off mode energy use. (42 U.S.C. 6295(gg)(3)) Specifically, when DOE adopts a standard for a covered product after that date, it must, if justified by the criteria for adoption of standards under EPCA (42 U.S.C. 6295(o)), incorporate standby mode and off mode energy use into a single standard, or, if that is not feasible, adopt a separate standard for such energy use for that product. (42 U.S.C. 6295(gg)(3)(A)-(B)) DOE's current test procedures for consumer water heaters address standby mode and off mode energy use. In this rulemaking, DOE is proposing to apply the UEF metric (which addresses standby mode and off mode energy use) to all product classes of consumer water heaters, including those product classes for which there are no currently applicable UEF-based standards.
B. Background
1. Current Standards
As directed by EPCA (42 U.S.C. 6295(e)(4)), DOE conducted two cycles of rulemakings to determine whether to amend the statutory standards for consumer water heaters found in 42 U.S.C. 6295(e)(1). The most recent rulemaking from April 2010 resulted in amended standards using the energy factor (“EF”) metric originally prescribed by EPCA with a requirement for compliance starting on April 16, 2015. 75 FR 20112 (the “April 2010 Final Rule”). Later amendments to EPCA directed DOE to establish a uniform efficiency metric for consumer water heaters (
see
42 U.S.C. 6295(e)(5)(B)).
14
The Federal test procedure was revised to use a new metric, UEF, in a final rule published on July 11, 2014. 79 FR 40542. In a final rule published in the
Federal Register
on December 29, 2016, the existing EF-based energy conservation standards were then translated from EF to UEF using a “conversion factor” method for water heater basic models that were in existence at the time. 81 FR 96204 (“December 2016 Conversion Factor Final Rule”).
14
The requirement for a consumer water heater test procedure using uniform energy factor as a metric, as well as the requirement for DOE to undertake a conversion factor rulemaking to translate existing consumer water heater standards denominated in terms of EF to ones denominated in terms of UEF, were part of the amendments to EPCA contained in the American Energy Manufacturing Technical Corrections Act (AEMTCA), Public Law 112-210 (Dec. 18, 2012).
These standards are set forth in DOE's regulations at 10 CFR 430.32(d) and are repeated in Table II.1.
Table II.1—Current UEF-Based Federal Energy Conservation Standards for Consumer Water Heaters
Product class
Rated storage
volume and input rating
(if applicable)
Draw pattern *
Uniform energy factor **
Gas-fired Storage Water Heater
≥20 gal and ≤55 gal
Very Small
0.3456−(0.0020 × V
r
)
Low
0.5982−(0.0019 × V
r
)
Medium
0.6483−(0.0017 × V
r
)
High
0.6920−(0.0013 × V
r
)
>55 gal and ≤100 gal
Very Small
0.6470−(0.0006 × V
r
)
Low
0.7689−(0.0005 × V
r
)
Medium
0.7897−(0.0004 × V
r
)
High
0.8072−(0.0003 × V
r
)
Oil-fired Storage Water Heater
≤50 gal
Very Small
0.2509−(0.0012 × V
r
)
Low
0.5330−(0.0016 × V
r
)
Medium
0.6078−(0.0016 × V
r
)
High
0.6815−(0.0014 × V
r
)
Electric Storage Water Heaters
≥20 gal and ≤55 gal
Very Small
0.8808−(0.0008 × V
r
)
Low
0.9254−(0.0003 × V
r
)
Medium
0.9307−(0.0002 × V
r
)
High
0.9349−(0.0001 × V
r
)
>55 gal and ≤120 gal
Very Small
1.9236−(0.0011 × V
r
)
Low
2.0440−(0.0011 × V
r
)
Medium
2.1171−(0.0011 × V
r
)
High
2.2418−(0.0011 × V
r
)
Tabletop Water Heater
≥20 gal and ≤120 gal
Very Small
0.6323−(0.0058 × V
r
)
Low
0.9188−(0.0031 × V
r
)
Medium
0.9577−(0.0023 × V
r
)
High
0.9884−(0.0016 × V
r
)
Instantaneous Gas-fired Water Heater
<2 gal and >50,000 Btu/h
Very Small
0.80
Low
0.81
Medium
0.81
High
0.81
Instantaneous Electric Water Heater
<2 gal
Very Small
0.91
Low
0.91
Medium
0.91
High
0.92
Grid-enabled Water Heater
>75 gal
Very Small
1.0136−(0.0028 × V
r
)
Low
0.9984−(0.0014 × V
r
)
Medium
0.9853−(0.0010 × V
r
)
High
0.9720−(0.0007 × V
r
)
* The draw pattern dictates the frequency and duration of hot water draws during the 24-hour simulated use test, and is an indicator of delivery capacity of the water heater. Draw patterns are assigned based on the first hour rating (“FHR”), for non-flow-activated water heaters, or maximum GPM rating (“Max GPM”), for flow-activated water heaters. For the specific FHR and Max GPM ranges which correspond to each draw pattern, see section 5.4.1 of appendix E to subpart B of 10 CFR part 430.
** V
r
is the rated storage volume (in gallons), as determined pursuant to 10 CFR 429.17.
In the December 2016 Conversion Factor Final Rule, DOE declined to develop conversion factors and UEF-based standards for consumer water heaters of certain sizes (by rated storage volume or input rating) and of certain types (
i.e.,
oil-fired instantaneous water heaters) where models did not exist on the market at the time to inform the analysis of the standards conversion. 81 FR 96204, 96210-96211. For consumer water heaters that did not receive converted UEF-based standards, DOE provided its interpretation that the original statutory standards—found at 42 U.S.C. 6295(e)(1) and expressed in terms of the EF metric—still applied; however, DOE would not enforce those statutorily-prescribed standards until such a time conversion factors are developed for these products and they can be converted to UEF.
Id.
Thus, the EF-based standards specified by EPCA apply to any consumer water heaters which do not have UEF-based standards found at 10 CFR 430.32(d). These EF-based standards are set forth at 42 U.S.C. 6295(e)(1) and are repeated in Table II.2.
Table II.2—EF-Based Federal Energy Conservation Standards for Consumer Water Heaters
Product class
Energy factor *
Gas water heaters
0.62−(0.0019 × V
r
)
Oil water heaters
0.59−(0.0019 × V
r
)
Electric water heaters
0.95−(0.00132 × V
r
)
* V
r
is the rated storage volume (in gallons), as determined pursuant to 10 CFR 429.17.
2. History of the Current Standards Rulemaking for Consumer Water Heaters
On May 21, 2020, DOE initiated the current rulemaking by publishing in the
Federal Register
a request for information (“May 2020 RFI”), soliciting public comment on various aspects of DOE's planned analyses to help DOE determine whether to amend energy conservation standards for consumer water heaters. 85 FR 30853 (May 21, 2020). DOE subsequently published a notice requesting feedback on its preliminary analysis and technical support document (“preliminary TSD”) on March 1, 2022 (the “March 2022 Preliminary Analysis”) with a 60-day comment period. 87 FR 11327 (Mar. 1, 2022). The comment period was extended by 14 days in a notice published on May 4, 2022. 87 FR 26303. DOE received comments in response to the preliminary analysis notice and accompanying technical support document from the interested parties listed in Table II.3.
On October 21, 2022, DOE received a set of recommendations on amended energy conservation standards for consumer water heaters from a coalition of public- and private-sector organizations, including water heater manufacturers, energy efficiency organizations, environmental groups, and consumer organizations—collectively the Joint Stakeholders. This coalition's submission is herein referred to as the “Joint Recommendation.” The Joint Recommendation addressed standards for electric storage water heaters, gas-fired storage water heaters,
and gas-fired instantaneous water heaters and is discussed in further detail in section III.F of this document.
Table II.3—Preliminary Analysis and Joint Recommendation Comments
Commenter(s)
Abbreviation
Comment No.
in the docket *
Commenter type
American Council for an Energy-Efficient Economy, Appliance Standards Awareness Project, Bradford White Corporation, Consumer Federation of America, Natural Resources Defense Council, Northwest Energy Efficiency Alliance, Rheem Manufacturing Company
Joint Stakeholders
49
Efficiency Organizations, Manufacturers, Consumer Advocacy Organization.
Air-Conditioning, Heating and Refrigeration Institute
AHRI
20, 31, 42
Trade Association.
Anonymous
Anonymous
19
Individual.
Atmos Energy Corporation
Atmos
27, 38
Utility.
Bradford White Corporation
BWC
32
Manufacturer.
California Investor-Owned Utilities (Pacific Gas and Electric Company, Southern California Edison, San Diego Gas & Electric Company)
CA IOUs
31, 39, 52
Utility Association.
Center for Energy and Environment
CEE
50
Efficiency Organization.
Benjamin Cirker
Cirker
30
Individual.
Edison Electric Institute
EEI
31, 43
Utility Association.
The American Gas Association, American Public Gas Association, National Propane Gas Association, Spire Inc., Spire Missouri Inc., and Spire Alabama Inc.
Gas Association Commenters
26, 41, 54
Utility Association.
GE Appliances
GEA
46
Manufacturer.
Gas End-Use Advocacy Group
GEAG
36
Utility Association.
Appliance Standards Awareness Project, American Council for an Energy-Efficient Economy, California Energy Commission, Consumer Federation of America, National Consumer Law Center, Natural Resources Defense Council and Northeast Energy Efficiency Partnerships
Joint Advocates
34
Efficiency Organization.
Northwest Energy Efficiency Alliance, American Council for an Energy-Efficient Economy, Northwest Power and Conservation Council
NEEA, ACEEE, and NWPCC
47
Efficiency Organization.
Northwest Energy Efficiency Alliance
NEEA
31
Efficiency Organization.
Natural Resources Defense Council and Rocky Mountain Institute
NRDC and RMI
37
Efficiency Organization.
National Rural Electric Cooperative Association
NRECA
33
Utility Association.
New York State Energy Research and Development Authority
NYSERDA
35, 51
Efficiency Organization.
ONE Gas Inc
ONE Gas
28, 44
Utility.
Plumbing-Heating-Cooling Contractors Association
PHCC
40
Trade Association.
Rheem Manufacturing Company
Rheem
45
Manufacturer.
Rinnai America Corporation
Rinnai
55
Manufacturer.
Southern Company
Southern Company
31
Manufacturer.
Southwest Energy Efficiency Project
SWEEP
53
Efficiency Organization.
Eriks Mota Vasquez
Vasquez
17
Individual.
*Comment No. 31 denotes comments recorded in the transcript of the public meeting held on April 12, 2022.
A parenthetical reference at the end of a comment quotation or paraphrase provides the location of the item in the public record.
15
To the extent that interested parties have provided written comments that are substantively consistent with any oral comments provided during the April 12, 2022 public meeting, DOE cites the written comments throughout this final rule. Any oral comments provided during the webinar that are not substantively addressed by written comments are summarized and cited separately throughout this final rule.
15
The parenthetical reference provides a reference for information located in the docket of DOE's rulemaking to develop energy conservation standards for consumer water heaters. (Docket No. EERE-2017-BT-STD-0019, which is maintained at
www.regulations.gov
). The references are arranged as follows: (commenter name, comment docket ID number, page of that document).
C. Deviation From Appendix A
In accordance with section 3(a) of 10 CFR part 430, subpart C, appendix A (“appendix A”), DOE has deviated from the provision in appendix A regarding the pre-NOPR stages for an energy conservation standards rulemaking (specifically, the publication of a framework document). As initially discussed in the March 2022 Preliminary Analysis, DOE opted to deviate from this step by publishing a preliminary analysis without a framework document. A framework document is intended to introduce and summarize the various analyses DOE conducts during the rulemaking process and requests initial feedback from interested parties. Prior to the notification of the preliminary analysis DOE published an RFI in which DOE identified and sought comment on the analyses conducted in support of the most recent energy conservation standards rulemakings for water heaters. 87 FR 11327, 11330.
For this NOPR, DOE further notes that it is deviating from the provision in appendix A regarding the NOPR stage for an energy conservation standards rulemaking. Section 6(f)(2) of appendix A specifies that the length of the public comment period for a NOPR will be not less than 75 calendar. For this NOPR, DOE has opted instead to provide a 60-day comment period. DOE is opting to deviate from the 75-day comment period because stakeholders have already been afforded multiple opportunities to provide comments on this rulemaking. As noted previously, DOE requested comment on its planned technical and economic analyses in the May 2020 RFI and provided stakeholders with a 45-day comment period. 85 FR 30853. Additionally, DOE initially provided a 60-day comment period for stakeholders to provide input on the analyses presented in the preliminary TSD. 87 FR 11327. Subsequently, in response to requests from stakeholders, DOE re-opened the comment period for an additional 14 days to provide additional time for stakeholders to provide input on the preliminary analysis. 87 FR 26303 (May 4, 2022). The analytical assumptions and approaches used for the analyses conducted for this NOPR are similar to those used for the preliminary analysis. Therefore, DOE believes a 60-day comment period is appropriate and will provide interested parties with a meaningful opportunity to comment on the proposed rule.
Section 8(d)(1) of appendix A requires that new or amended test procedures
which impact measured energy use or efficiency are finalized at least 180 days prior to the close of comment period for a NOPR proposing new or amended energy conservation standards. However, in a final rule published on December 13, 2021, discussing the provisions of appendix A, DOE noted that this 180-day period may not always be necessary. 86 FR 70892, 70896. The comment period for this NOPR will close on September 26, 2023, which is X days after the date of finalization of the most recent consumer and residential-duty commercial water heaters test procedure final rule, June 21, 2023 (this test procedure final rule is discussed in section III.B of this document). As described in that test procedure final rule, the amendments adopted therein will not alter the measured efficiency of consumer water heaters, or require retesting or recertification solely as a result of DOE's adoption of the amendments to the test procedures. 88 FR 40406, 40412. As such, the test provisions required by the most recent test procedure final rule are expected to be generally understood by stakeholders and would not impact the analysis of this standards rulemaking.
III. General Discussion
DOE developed this proposal after considering oral and written comments, data, and information from interested parties that represent a variety of interests. The following discussion provides a general overview of the approach taken to develop this proposal, with specific discussion of the methodology and comments received in section IV of this document.
A. Scope of Coverage
This NOPR covers those consumer products that meet the definition of “water heater,” as codified at 10 CFR 430.2 and as described by EPCA at 42 U.S.C. 6291(27).
Generally, DOE defines a “water heater,” consistent with EPCA's definition, as a product which utilizes oil, gas, or electricity to heat potable water for use outside the heater upon demand, including:
(a) Storage type units which heat and store water at a thermostatically controlled temperature, including gas storage water heaters with an input of 75,000 Btu per hour or less, oil storage water heaters with an input of 105,000 Btu per hour or less, and electric storage water heaters with an input of 12 kilowatts or less;
(b) Instantaneous type units which heat water but contain no more than one gallon of water per 4,000 Btu per hour of input, including gas instantaneous water heaters with an input of 200,000 Btu per hour or less, oil instantaneous water heaters with an input of 210,000 Btu per hour or less, and electric instantaneous water heaters with an input of 12 kilowatts or less; and
(c) Heat pump type units, with a maximum current rating of 24 amperes at a voltage no greater than 250 volts, which are products designed to transfer thermal energy from one temperature level to a higher temperature level for the purpose of heating water, including all ancillary equipment such as fans, storage tanks, pumps, or controls necessary for the device to perform its function.
10 CFR 430.2; (42 U.S.C. 6291(27))
In addition, at 10 CFR 430.2, DOE further defines several specific categories of consumer water heaters, as follows:
• “Electric instantaneous water heater” means a water heater that uses electricity as the energy source, has a nameplate input rating of 12 kW or less, and contains no more than one gallon of water per 4,000 Btu per hour of input.
• “Electric storage water heater” means a water heater that uses electricity as the energy source, has a nameplate input rating of 12 kW or less, and contains more than one gallon of water per 4,000 Btu per hour of input.
• “Gas-fired instantaneous water heater” means a water heater that uses gas as the main energy source, has a nameplate input rating less than 200,000 Btu per hour, and contains no more than one gallon of water per 4,000 Btu per hour of input.
• “Gas-fired storage water heater” means a water heater that uses gas as the main energy source, has a nameplate input rating of 75,000 Btu per hour or less, and contains more than one gallon of water per 4,000 Btu per hour of input.
• “Grid-enabled water heater” means an electric resistance water heater that—
⚬ Has a rated storage tank volume of more than 75 gallons;
⚬ Is manufactured on or after April 16, 2015;
⚬ Is equipped at the point of manufacture with an activation lock; and
⚬ Bears a permanent label applied by the manufacturer that—
Is made of material not adversely affected by water;
Is attached by means of non-water-soluble adhesive; and
Advises purchasers and end-users of the intended and appropriate use of the product with the following notice printed in 16.5 point Arial Narrow Bold font: “IMPORTANT INFORMATION: This water heater is intended only for use as part of an electric thermal storage or demand response program. It will not provide adequate hot water unless enrolled in such a program and activated by your utility company or another program operator. Confirm the availability of a program in your local area before purchasing or installing this product.”
• “Oil-fired instantaneous water heater” means a water heater that uses oil as the main energy source, has a nameplate input rating of 210,000 Btu/h or less, and contains no more than one gallon of water per 4,000 Btu per hour of input.
• “Oil-fired storage water heater” means a water heater that uses oil as the main energy source, has a nameplate input rating of 105,000 Btu/h or less, and contains more than one gallon of water per 4,000 Btu per hour of input.
In the June 2023 Test Procedure Final Rule, DOE amended 10 CFR 430.2 (effective on July 21, 2023), adding the following definitions for circulating, low-temperature, and tabletop water heaters:
• “Circulating water heater” means an instantaneous or heat pump-type water heater that does not have an operational scheme in which the burner, heating element, or compressor initiates and/or terminates heating based on sensing flow; has a water temperature sensor located at the inlet or the outlet of the water heater or in a separate storage tank that is the primary means of initiating and terminating heating; and must be used in combination with a recirculating pump and either a separate storage tank or water circulation loop in order to achieve the water flow and temperature conditions recommended in the manufacturer's installation and operation instructions.
• “Low-temperature water heater” means an electric instantaneous water heater that is not a circulating water heater and cannot deliver water at a temperature greater than or equal to the set point temperature specified in section 2.5 of appendix E to subpart B of this part when supplied with water at the supply water temperature specified in section 2.3 of appendix E to subpart B of part 430 and the flow rate specified in section 5.2.2.1 of appendix E to subpart B of part 430.
• “Tabletop water heater” means a water heater in a rectangular box enclosure designed to slide into a kitchen countertop space with typical dimensions of 36 inches high, 25 inches deep, and 24 inches wide.
As stated in section I of this NOPR, EPCA prescribed energy conservation standards for all consumer water heaters (
i.e.,
those that meet the definition of
“water heater” above). For the purposes of this NOPR, DOE is considering all consumer water heaters, as defined by EPCA. This includes consumer water heaters for which there are no current UEF-based standards codified at 10 CFR 430.32(d).
However, during this rulemaking, DOE has received inquiries from interested parties regarding the coverage, under current energy conservation standards, of hot water dispensing products. These products are generally used for food preparation (
e.g.,
brewing tea) and are installed in place of portable kettles. A small water-heating tank is connected to a sink's cold water supply to heat the water up to near-boiling temperatures. The hot water is piped out of the tank through a separate hot water faucet
16
specifically for use with this product. These products have very limited storage volume—often less than one gallon. All of the models that DOE has identified are all electric and run on less than 2 kilowatts of power. Note that these products are not to be confused with low-temperature electric instantaneous water heaters or point-of-use electric storage water heaters, both of which generally provide temperatures near or below 125 °F, the nominal delivery temperature in the appendix E test procedure that corresponds to normal household hot water temperatures for washing applications. Hot water dispensing products provide water at scalding-hot temperatures such as 160 °F to 210 °F.
16
“Low-pressure water dispenser” means a terminal fitting that dispenses drinking water at a pressure of 105 kPA (15 psi) or less. (10 CFR 430.2) Low-pressure water dispensers operate at lower water pressures than conventional kitchen faucets (by definition) and are used for the purpose of gently filling a relatively small vessel (
e.g.,
a glass).
DOE does not currently have energy conservation standards that cover hot water dispensing products and DOE's test procedure is not representative of an average use cycle for these products. Hot water dispensing products operate in a unique manner compared to the other consumer water heaters such as much higher temperatures, have smaller storage capacities, and can provide hot potable water at lower flow rates than typical consumer electric water heaters. While DOE has the authority to set standards for products that meet the definition of a consumer water heater (42 U.S.C. 6292(a)(4)), this rulemaking is not currently considering standards for hot water dispensing products.
See section IV.A.1 of this document for discussion of the product classes analyzed in this NOPR.
B. Test Procedure
EPCA sets forth generally applicable criteria and procedures for DOE's adoption and amendment of test procedures. (42 U.S.C. 6293) Manufacturers of covered products must use these test procedures to certify to DOE that their product complies with energy conservation standards and to quantify the efficiency of their product. DOE's current energy conservation standards for consumer water heaters are expressed in terms of UEF. (
See
10 CFR 430.32(d)).
DOE recently amended the test procedure for these products at appendix E to subpart B of 10 CFR 430 in the consumer and residential-duty commercial water heater test procedure final rule published on June 21, 2023 (“June 2023 TP Final Rule”) pursuant to the 7-year review requirement as specified by EPCA. (42 U.S.C. 6293(b)(1)(A) and 42 U.S.C. 6314(a)(1)(A)) In the June 2023 TP Final Rule, DOE added definitions and where necessary additional test procedure provisions for circulating water heaters, low-temperature water heaters, and tabletop water heaters, as well as provisions for high temperature testing. DOE also established effective storage volume as a metric and provided additional optional ambient test conditions for heat pump water heaters. The test procedure for consumer water heaters incorporates by reference current versions of industry standards ASHRAE 41.1, ASHRAE 41.6, ASHRAE 118.2, ASTM D2156, and ASTM E97 and harmonizes various aspects of the test procedure with industry test procedures ASHRAE 118.2-2022 and NEEA Advanced Water Heating Specification v8.0. The effective date of the June 2023 TP Final Rule is July 21, 2023, 30 days after the date of its publication in the
Federal Register.
Changes to the test procedure made by the June 2023 TP Final Rule are mandatory for consumer water heater testing starting December 18, 2023, 180 days after publication. Subsequent references in this NOPR to the “appendix E test procedure” refer to the test procedure which will go in effect on July 21, 2023.
DOE received comments in response to the March 2022 Preliminary Analysis regarding the consumer water heater test procedure that were relevant to the test procedure rulemaking.
Cirker provided comments suggesting that, based on personal in-home monitoring of three heat pump water heaters, different designs exhibit different performance (
i.e.,
delivery temperature, delivery capacity, and energy consumption) under winter conditions, when the consumer uses a higher setpoint temperature, has a lower ambient temperature, and a lower supply water temperature. Cirker suggested that DOE include a method to determine the efficiency and first hour rating of heat pump water heaters under cold climate conditions. (Cirker, No. 30 at pp. 1-2)
In the June 2023 TP Final Rule, DOE adopted additional test conditions—including those simulating cold climates—for manufacturers to be able to make voluntary optional representations for heat pump water heaters. 88 FR 40406.
NYSERDA commented that rated storage volume is no longer an appropriate representation of the capacity of a storage water heater volume due to the use of mixing valves and higher tank temperatures, suggesting that first hour rating (“FHR”) be used instead. (NYSERDA, No. 35 at p. 6) DOE agreed that increasing the temperature of the water stored in a water heater above the nominal delivery temperature is a way to increase the capacity of the water heater, as the hotter water can be tempered with cool water using a mixing valve to provide a larger volume of hot water than when the water is stored at the relatively cooler nominal temperature. For water heaters that are capable of storing water at such an elevated temperature, the effective storage volume metric represents a measure of the true storage capacity of the water heater based on the maximum temperature at which it can store water, as compared to storing water at the nominal temperature of 125 degrees Fahrenheit (“°F”) specified in appendix E. DOE agreed, therefore, that rated storage volume alone is not an adequate representation of the storage capacity of water heaters that are capable of heating and storing water at high temperatures (
i.e.,
at a temperature well above the typical setpoint temperature of 125 °F), and established effective storage volume to better represent the storage capacity of such water heaters in the June 2023 TP Final Rule. 88 FR 40406. DOE specified in appendix E that effective storage volume is determined by multiplying the measured storage volume by a scaling factor which represents the ratio of the thermal energy stored in the tank when at its maximum storage temperature as compared to the thermal energy stored in the tank when at the nominal temperature of 125 °F.
Id.
The appendix E test procedure, as amended by the June 2023 TP Final Rule, does not require water heaters to test in the highest heat mode (
i.e.,
the
high temperature test method). In the June 2023 TP Final Rule, DOE deferred the implementation of high temperature testing provisions to this energy conservation standards rulemaking. 88 FR 40406, 40448.
DOE further agrees with NYSERDA that storage volume is not an adequate representation of the storage capacity of water heaters that are capable of heating and storing water at high temperatures (
i.e.,
at a temperature well above the typical setpoint temperature of 125 °F). In the June 2023 TP Final Rule, DOE established effective storage volume as a metric to better represent the storage capacity of such water heaters. 88 FR 40406. Consequently, DOE is now addressing the implementation of effective storage volume provisions in this NOPR. In this NOPR, DOE is proposing that high temperature test provisions be required for electric storage water heaters that have a permanent (
i.e.,
non-temporary) mode or setting to heat and store water above 135 °F and that do not meet the definition of “heat pump-type” water heater (
i.e.,
this proposal applies to storage water heaters utilizing only electric resistance technology). Further, these provisions would not apply to water heaters that either store water at an elevated temperature only for a temporary period or to water heaters that are capable of storing at elevated temperatures only in response to instructions from a utility or third-party demand response program. DOE expects that, especially in the case of small electric storage water heaters, these products will be installed at an elevated temperature setpoint with a mixing valve in order to match the performance of larger water heaters. The high temperature test provisions are therefore expected to be representative of the average use cycle of electric resistance water heaters.
DOE's proposal is detailed further in section V.C.1 of this document.
BWC commented in response to the March 2022 Preliminary Analysis regarding product classes for products that do not currently have UEF-based standards, stating that DOE refrain from considering them until the test procedure rulemaking is finalized and DOE determines whether these product classes will be necessary. BWC also noted that a study of the simulated use test completed by Davis Energy Group, Inc. suggests that EF ratings for instantaneous gas-fired water heaters are inflated in comparison to those for gas-fired storage water heaters. BWC acknowledged that this effect should be smaller for UEF ratings, but still urged DOE to consider its potential impact. (BWC, No. 32 at p. 6)
In response to BWC, DOE disagrees that its test procedure provides an unfair advantage to gas-fired instantaneous models over gas-fired storage models. DOE's 24-hour simulated use test, as defined at appendix E, is designed to emulate typical in-field usage patterns for consumer water heaters and includes periods of standby during which no water is being withdrawn from the water heater. Storage water heaters maintain a significant volume of stored water, which loses heat to the cooler surrounding air. This results in the water heater consuming energy to heat the stored water to offset these standby losses, in addition to the energy required to heat the water from the supply water temperature to the setpoint temperature. By contrast, because instantaneous-type water heaters do not typically maintain a significant volume of stored water, the standby losses they experience are generally much lower and do not require additional energy to offset. Instantaneous-type water heaters may therefore achieve higher UEF ratings compared to storage-type water heaters. However, DOE reiterates that this difference in efficiency is not a result of an unfair test procedure, but rather a result of the differences in design between gas-fired storage and gas-fired instantaneous water heaters and is indeed representative of an average use cycle or period of use. See section IV.A.1 of this document for discussion regarding whether storage-type and instantaneous-type product classes should be combined together under uniform standards.
The June 2023 TP Final Rule additionally expanded coverage of the appendix E test procedure to additional consumer water heaters under the scope of coverage of standards. As discussed in that final rule, DOE revised the test procedure to provide additional instructions for testing circulating water heaters and low-temperature water heaters for UEF. 88 FR 40406. A circulating water heater is defined at 10 CFR 430.2 as an instantaneous or heat pump-type water heater that does not have an operational scheme in which the burner, heating element, or compressor initiates and/or terminates heating based on sensing flow; has a water temperature sensor located at the inlet or the outlet of the water heater or in a separate storage tank that is the primary means of initiating and terminating heating; and must be used in combination with a recirculating pump and either a separate storage tank or water circulation loop in order to achieve the water flow and temperature conditions recommended in the manufacturer's installation and operation instructions. A low-temperature water heater is defined at 10 CFR 430.2 as an electric instantaneous water heater that is not a circulating water heater and cannot deliver water at a temperature greater than or equal to the set point temperature specified in section 2.5 of appendix E when supplied with water at the supply water temperature specified in section 2.3 of appendix E and the flow rate specified in section 5.2.2.1 of appendix E.
Treatment of circulating water heaters and low temperature water heaters as potential product classes is discussed in section IV.A.1.a of this document.
In response to the March 2022 Preliminary Analysis, Rinnai provided comments indicating that gas-fired instantaneous water heaters with integrated recirculating pumps may have an additional benefit to water conservation. (Rinnai, No. 55 at pp. 1-2) However, while DOE may consider the energy use associated with increased or decreased water use, DOE does not have the authority to establish water conservation standards for circulating water heaters or instantaneous water heaters. (
See
42 U.S.C. 6291(6))
C. Technological Feasibility
1. General
In each energy conservation standards rulemaking, DOE conducts a screening analysis based on information gathered on all current technology options and prototype designs that could improve the efficiency of the products or equipment that are the subject of the rulemaking. As the first step in such an analysis, DOE develops a list of technology options for consideration in consultation with manufacturers, design engineers, and other interested parties. DOE then determines which of those means for improving efficiency are technologically feasible. DOE considers technologies incorporated in commercially-available products or in working prototypes to be technologically feasible. Sections 6(b)(3)(i) and 7(b)(1) of appendix A to 10 CFR part 430 subpart C.
After DOE has determined that particular technology options are technologically feasible, it further evaluates each technology option in light of the following additional screening criteria: (1) practicability to manufacture, install, and service; (2) adverse impacts on product utility or availability; (3) adverse impacts on
health or safety; and (4) unique-pathway proprietary technologies. Sections 6(b)(3)(ii)-(v) and 7(b)(2)-(5) of appendix A. Section IV.B of this document discusses the results of the screening analysis for consumer water heaters, particularly the designs DOE considered, those it screened out, and those that are the basis for the standards considered in this rulemaking. For further details on the screening analysis for this rulemaking, see chapter 4 of the NOPR TSD”.
2. Maximum Technologically Feasible Levels
When DOE proposes to adopt an amended standard for a type or class of covered product, it must determine the maximum improvement in energy efficiency or maximum reduction in energy use that is technologically feasible for such product. (42 U.S.C. 6295(p)(1)) Accordingly, in the engineering analysis, DOE determined the maximum technologically feasible (“max-tech”) improvements in energy efficiency for consumer water heaters using the design parameters for the most efficient products available on the market or in working prototypes. The max-tech levels that DOE determined for this rulemaking are described in section IV.C.1.a of this proposed rule and in chapter 5 of the NOPR TSD.
D. Energy Savings
1. Determination of Savings
For each trial standard level (“TSL”), DOE projected energy savings from application of the TSL to consumer water heaters purchased in the 30-year period that begins in the year of compliance with the proposed standards (2030-2059).
17
The savings are measured over the entire lifetime of consumer water heaters purchased in the previous 30-year period. DOE quantified the energy savings attributable to each TSL as the difference in energy consumption between each standards case and the no-new-standards case. The no-new-standards case represents a projection of energy consumption that reflects how the market for a product would likely evolve in the absence of amended energy conservation standards.
17
Each TSL is composed of specific efficiency levels for each product class. The TSLs considered for this NOPR are described in section V.A of this document. DOE conducted a sensitivity analysis that considers impacts for products shipped in a 9-year period.
DOE used its national impact analysis (“NIA”) spreadsheet model to estimate national energy savings (“NES”) from potential amended or new standards for consumer water heaters. The NIA spreadsheet model (described in section IV.H of this document) calculates energy savings in terms of site energy, which is the energy directly consumed by products at the locations where they are used. For electricity, DOE reports national energy savings in terms of primary energy savings, which is the savings in the energy that is used to generate and transmit the site electricity. For natural gas, the primary energy savings are considered to be equal to the site energy savings. DOE also calculates NES in terms of FFC energy savings. The FFC metric includes the energy consumed in extracting, processing, and transporting primary fuels (
i.e.,
coal, natural gas, petroleum fuels), and thus presents a more complete picture of the impacts of energy conservation standards.
18
DOE's approach is based on the calculation of an FFC multiplier for each of the energy types used by covered products or equipment. For more information on FFC energy savings, see section IV.H.1 of this document.
18
The FFC metric is discussed in DOE's statement of policy and notice of policy amendment. 76 FR 51282 (Aug. 18, 2011), as amended at 77 FR 49701 (Aug. 17, 2012).
2. Significance of Savings
To adopt any new or amended standards for a covered product, DOE must determine that such action would result in significant energy savings. (42 U.S.C. 6295(o)(3)(B))
The significance of energy savings offered by a new or amended energy conservation standard cannot be determined without knowledge of the specific circumstances surrounding a given rulemaking.
19
For example, some covered products and equipment have most of their energy consumption occur during periods of peak energy demand. The impacts of these products on the energy infrastructure can be more pronounced than products with relatively constant demand. Accordingly, DOE evaluates the significance of energy savings on a case-by-case basis, taking into account the significance of cumulative FFC national energy savings, the cumulative FFC emissions reductions, and the need to confront the global climate crisis, among other factors. DOE has initially determined the energy savings from the proposed standard levels are “significant” within the meaning of 42 U.S.C. 6295(o)(3)(B).
19
The numeric threshold for determining the significance of energy savings established in a final rule published on February 14, 2020 (85 FR 8626, 8670), was subsequently eliminated in a final rule published on December 13, 2021 (86 FR 70892, 70906).
E. Economic Justification
1. Specific Criteria
As noted previously, EPCA provides seven factors to be evaluated in determining whether a potential energy conservation standard is economically justified. (42 U.S.C. 6295(o)(2)(B)(i)(I)-(VII)) The following sections discuss how DOE has addressed each of those seven factors in this proposed rulemaking.
a. Economic Impact on Manufacturers and Consumers
In determining the impacts of a potential amended standard on manufacturers, DOE conducts an MIA, as discussed in section IV.J of this document. DOE first uses an annual cash-flow approach to determine the quantitative impacts. This step includes both a short-term assessment—based on the cost and capital requirements during the period between when a regulation is issued and when entities must comply with the regulation—and a long-term assessment over a 30-year period. The industry-wide impacts analyzed include (1) INPV, which values the industry on the basis of expected future cash flows, (2) cash flows by year, (3) changes in revenue and income, and (4) other measures of impact, as appropriate. Second, DOE analyzes and reports the impacts on different types of manufacturers, including impacts on small manufacturers. Third, DOE considers the impact of standards on domestic manufacturer employment and manufacturing capacity, as well as the potential for standards to result in plant closures and loss of capital investment. Finally, DOE takes into account cumulative impacts of various DOE regulations and other regulatory requirements on manufacturers.
For individual consumers, measures of economic impact include the changes in LCC and PBP associated with new or amended standards. These measures are discussed further in the following section. For consumers in the aggregate, DOE also calculates the national net present value of the consumer costs and benefits expected to result from particular standards. DOE also evaluates the impacts of potential standards on identifiable subgroups of consumers that may be affected disproportionately by a standard.
An anonymous commenter indicated that the benefits of making water heaters more energy-efficient would likely outweigh the costs. The commenter stated that many households have either
very old water heaters or water heaters that consume a significant amount of energy, and that energy conservation standards can be helpful in guiding customer choices. (Anonymous, No. 19)
b. Savings in Operating Costs Compared to Increase in Price (LCC and PBP)
EPCA requires DOE to consider the savings in operating costs throughout the estimated average life of the covered product in the type (or class) compared to any increase in the price of, or in the initial charges for, or maintenance expenses of, the covered product that are likely to result from a standard. (42 U.S.C. 6295(o)(2)(B)(i)(II)) DOE conducts this comparison in its LCC and PBP analysis.
The LCC is the sum of the purchase price of a product (including its installation) and the operating expense (including energy, maintenance, and repair expenditures) discounted over the lifetime of the product. The LCC analysis requires a variety of inputs, such as product prices, product energy consumption, energy prices, maintenance and repair costs, product lifetime, and discount rates appropriate for consumers. To account for uncertainty and variability in specific inputs, such as product lifetime and discount rate, DOE uses a distribution of values, with probabilities attached to each value.
The PBP is the estimated amount of time (in years) it takes consumers to recover the increased purchase cost (including installation) of a more-efficient product through lower operating costs. DOE calculates the PBP by dividing the change in purchase cost due to a more-stringent standard by the change in annual operating cost for the year that standards are assumed to take effect.
For its LCC and PBP analysis, DOE assumes that consumers will purchase the covered products in the first year of compliance with new or amended standards. The LCC savings for the considered efficiency levels are calculated relative to the case that reflects projected market trends in the absence of new or amended standards. DOE's LCC and PBP analysis is discussed in further detail in section IV.F of this document.
c. Energy Savings
Although significant conservation of energy is a separate statutory requirement for adopting an energy conservation standard, EPCA requires DOE, in determining the economic justification of a standard, to consider the total projected energy savings that are expected to result directly from the standard. (42 U.S.C. 6295(o)(2)(B)(i)(III)) As discussed in section III.D of this document, DOE uses the NIA spreadsheet models to project national energy savings.
d. Lessening of Utility or Performance of Products
In establishing product classes and in evaluating design options and the impact of potential standard levels, DOE evaluates potential standards that would not lessen the utility or performance of the considered products. (42 U.S.C. 6295(o)(2)(B)(i)(IV)) Based on data available to DOE, the standards proposed in this document would not reduce the utility or performance of the products under consideration in this rulemaking.
e. Impact of Any Lessening of Competition
EPCA directs DOE to consider the impact of any lessening of competition, as determined in writing by the Attorney General, that is likely to result from a proposed standard. (42 U.S.C. 6295(o)(2)(B)(i)(V)) EPCA also directs the Attorney General to determine the impact, if any, of any lessening of competition likely to result from a proposed standard and to transmit such determination to the Secretary within 60 days of the publication of a proposed rule, together with an analysis of the nature and extent of the impact. (42 U.S.C. 6295(o)(2)(B)(ii)) DOE will transmit a copy of this proposed rule to the Attorney General with a request that the Department of Justice (“DOJ”) provide its determination on this issue. DOE will publish and respond to the Attorney General's determination in the final rule. DOE invites comment from the public regarding the competitive impacts that are likely to result from this proposed rule. In addition, stakeholders may also provide comments separately to DOJ regarding these potential impacts. See the
ADDRESSES
section for information to send comments to DOJ.
f. Need for National Energy Conservation
DOE also considers the need for national energy and water conservation in determining whether a new or amended standard is economically justified. (42 U.S.C. 6295(o)(2)(B)(i)(VI)) The energy savings from the proposed standards are likely to provide improvements to the security and reliability of the Nation's energy system. Reductions in the demand for electricity also may result in reduced costs for maintaining the reliability of the Nation's electricity system. DOE conducts a utility impact analysis to estimate how standards may affect the Nation's needed power generation capacity, as discussed in section IV.M of this document.
DOE maintains that environmental and public health benefits associated with the more efficient use of energy are important to take into account when considering the need for national energy conservation. The proposed standards are likely to result in environmental benefits in the form of reduced emissions of air pollutants and greenhouse gases (“GHGs”) associated with energy production and use. DOE conducts an emissions analysis to estimate how potential standards may affect these emissions, as discussed in section IV.K of this document; the estimated emissions impacts are reported in section V.X of this document. DOE also estimates the economic value of emissions reductions resulting from the considered TSLs, as discussed in section IV.L of this document.
g. Other Factors
In determining whether an energy conservation standard is economically justified, DOE may consider any other factors that the Secretary deems to be relevant. (42 U.S.C. 6295(o)(2)(B)(i)(VII)) To the extent DOE identifies any relevant information regarding economic justification that does not fit into the other categories described previously, DOE could consider such information under “other factors.”
2. Rebuttable Presumption
As set forth in 42 U.S.C. 6295(o)(2)(B)(iii), EPCA creates a rebuttable presumption that an energy conservation standard is economically justified if the additional cost to the consumer of a product that meets the standard is less than three times the value of the first year's energy savings resulting from the standard, as calculated under the applicable DOE test procedure. DOE's LCC and PBP analyses generate values used to calculate the effects that proposed energy conservation standards would have on the payback period for consumers. These analyses include, but are not limited to, the 3-year payback period contemplated under the rebuttable-presumption test. In addition, DOE routinely conducts an economic analysis that considers the full range of impacts to consumers, manufacturers, the Nation, and the environment, as required under 42 U.S.C. 6295(o)(2)(B)(i). The results of this analysis serve as the basis for DOE's evaluation of the economic justification
for a potential standard level (thereby supporting or rebutting the results of any preliminary determination of economic justification). The rebuttable presumption payback calculation is discussed in section IV.X of this proposed rule.
F. Interested Party Recommendations
As discussed in section II.B.2 of this document, DOE received a Joint Stakeholder Recommendation for amended standards pertaining to electric storage water heaters, gas-fired storage water heaters, and gas-fired instantaneous water heaters. Specifically, the Joint Stakeholder Recommendation recommended that DOE adopt the standards shown in Table III.1 through Table III.3. (Joint Stakeholders, No. 49 at pp. 9-10)
Table III.1—Joint Stakeholder Recommendation Levels for Electric Storage Water Heaters
Draw pattern
First hour rating
(FHR)
DOE rated storage volume
≥20 to ≤30 gallons
>30 to ≤35 gallons
>35 to ≤55 gallons
>55 to 120 gallons
Low
≥18 to <51 gallons
Current Standard *
Height ≤36 inches: Current Standard *
2.3 UEF
2.5 UEF
Height >36 inches: 2.0 UEF
Medium
≥51 to <75 gallons
2.0 UEF
2.0 UEF
High
≥75 gallons
* Current Standard: UEF = 0.9254−0.0003 × V
r
, where V
r
is the DOE rated storage volume.
Table III.2—Joint Recommendation Recommended Levels for Gas-Fired Storage Water Heaters
Draw pattern
First hour rating (FHR)
DOE rated storage volume ≥20 to ≤55 gallons
Low
≥18 to <51 gallons
UEF = 0.6451−0.0019 * V
r
Medium
≥51 to <75 gallons
UEF = 0.7046−0.0017 * V
r
High
≥75 gallons
UEF = 0.7424−0.0013 * V
r
Note:
V
r
= DOE rated storage volume. These recommended levels are for gas-fired storage water heaters including standard, low NO
X,
and ultra-low NO
X
burners. The levels shown are equivalent to DOE's preliminary TSD Efficiency Level 2 (EL2).
Table III.3—Joint Recommendation Recommended Levels for Gas-Fired Instantaneous Water Heaters
Draw pattern
Recommended efficiency level
Medium
0.91 UEF
High
0.93 UEF
Note:
These recommended levels are for gas-fired instantaneous water heaters with a DOE rated storage volume of <2 gallons and an input rating of >50,000 BTU per hour. The levels shown are equivalent to DOE's preliminary TSD Efficiency Level 2 (EL2).
In support of the recommended levels, the Joint Stakeholders stated that, if adopted, the recommendation would transition the majority of electric water heaters to heat pump technology and make incremental steps to improve gas-fired water heater efficiency. The Joint Stakeholders also stated that the recommended levels would provide significant reductions in national water heating energy use and their associated greenhouse gas emissions, save consumers money on their utility bills, provide manufacturers more business certainty with room to innovate, and offer manufacturers, consumers, and professional installers flexibility for certain applications where heat pump technology is not currently a viable replacement option. (Joint Stakeholders, No. 49 at p. 1 and pp. 5-6)
DOE has included an analysis of the benefits and burdens of the Joint Stakeholder Recommendation as part of its analyses of amended energy conservation standards for this NOPR. The Joint Stakeholder Recommendation is discussed in further detail, as applicable, throughout section IV of this document. Following the submission by the Joint Stakeholders, three other commenters, SWEEP, CEE and NYSERDA, submitted comments in support of the efficiency level proposals recommended by the Joint Stakeholders. (SWEEP, No. 53 at p. 1; CEE, No. 50 at p. 1; NYSERDA, No. 51 at pp. 1-2)
The CA IOUs provided a recommendation similar to the Joint Stakeholder Recommendation, suggesting that all electric storage water heaters between 20 and 120 gallons in rated storage volume would have to meet heat pump standards roughly equivalent to Efficiency Level (“EL”) 2 analyzed in the March 2022 Preliminary Analysis, except for products 20-30 gallons in the low draw pattern (based on FHR). The CA IOUs justified their recommendation by stating that it sought to maximize the share of the future residential water heater market that will be high-efficiency, while allowing less-efficient products to fill applications that are challenging for currently available heat pump water heaters. (CA IOUs, No. 52 at p. 6-7) The CA IOUs' recommendation is shown in Table III.4.
Table III.4—CA IOUs Recommended Levels for Electric Storage Water Heaters
Draw pattern
First hour rating
(FHR)
Rated storage volume
≥20 to ≤30 gallons
>30 to ≤120 gallons
Low
≥18 to <51 gallons
0.93 UEF
3.30 UEF
Medium
≥51 to <75 gallons
3.35 UEF
High
≥75 gallons
3.47 UEF
The Gas Association Commenters submitted a request for DOE to follow the normal notice and comment procedure for proposing standards prior to a final rule, rather than promulgating a direct final rule in response to the Joint Stakeholder Recommendation and the CA IOUs recommendation. The Gas Association Commenters suggested that DOE publish an advance notice of proposed rulemaking (“ANOPR”) prior to a NOPR in order to solicit feedback. The Gas Association Commenters also argued that DOE does not have the grounds for utilizing the direct final rule process based on the provisions in EPCA and relevant precedent. (Gas Association Commenters, No. 54 at pp. 2-3)
To this, DOE notes that it is proposing standards for consumer water heaters and seeking public comment. As for issuing an ANOPR to solicit feedback, DOE has already solicited public comment through the May 2020 RFI and the March 2022 Preliminary Analysis. Further, the March 2022 Preliminary Analysis details the analytical methods and preliminary results DOE has used in this NOPR. As such, DOE does not believe an ANOPR is necessary or appropriate.
NYSERDA agreed with DOE's analysis that supports heat pump water heater (“HPWH”) technology. NYSERDA noted that the HPWH market has seen significant improvement in cost and efficiency in the last decade, and they are pleased to see this reflected through DOE's analysis as part of this rulemaking. (NYSERDA, No. 35 at p.2) NYSERDA also recommended that all products use condensing and heat pump technology as justified and appropriate based on DOE's final analysis. (NYSERDA, No. 35 at p. 6) In response, DOE notes that most energy conservation standard levels proposed for electric storage water heaters in this NOPR effectively require the use of heat pump technology. However, DOE cannot and does not establish standards to explicitly require certain technologies. All standards proposed by DOE must be both technologically feasible and economically justified, and the standards proposed in this NOPR are consistent with that requirement.
Rheem urged DOE to propose and then finalize an EL for gas-fired storage water heaters that requires electricity and is achievable with a Category I venting solution to moderate the installation costs associated with this rulemaking, as well as the next, in anticipation of future electrification efforts. Rheem argued that doing so would ensure that 120 V electrical power already exists at the water heater for the next replacement and provide consumers with the option of choosing a drop-in 120 V heat pump water heater replacement or high efficiency condensing water heater. (Rheem, No. 45 at p. 4) In addition, Rheem stated that it did not recommend amending the standard for gas-fired instantaneous water heaters to EL 3. (Rheem, No. 45 at p. 7) Rinnai recommended that gas-fired storage water heater standards be set at 0.80 UEF
20
because this efficiency level appears to be feasible and could result in significant energy savings because gas-fired storage water heaters may comprise 42 percent of the overall market. Rinnai stated that EL 2 would continue to allow lower efficiency products to be used in the market. (Rinnai, No. 55 at p. 1)
20
In the March 2022 Preliminary Analysis, 0.80 was the UEF value for EL 4 for a representative 48-gallon gas-fired storage water heater in the high draw pattern.
After weighing the benefits and burdens of various potential standard levels, DOE is proposing to amend the standards to those in trial standard level 2, which consists of efficiency level 2 for both gas-fired storage water heaters and gas-fired instantaneous water heaters. Additional discussion of DOE's rationale is discussed in section V.C of this document.
One Gas and the Gas Association Commenters strongly endorse use of non-regulatory alternatives as a means for addressing energy efficiency and greenhouse gas emissions from gas-fired consumer appliances such as the current review of ENERGY STAR for consumer water heaters. One Gas also recognizes that the non-regulatory alternatives available to the Department provide it with the most efficient and effective means of addressing most market failure causes, such as purchase decisions not being made available to consumers inhabiting a dwelling. (ONE Gas, No. 44 at p. 8; Gas Association Commenters, No. 41, attachment 6, at p. 11) A full discussion of the non-regulatory alternatives considered by DOE is presented in chapter 17 of the TSD for this proposed rule. DOE is required to establish amended energy conservation standards for consumer water heaters if an amended standard would result in significant conservation of energy and would be both technologically feasible and economically justified.
BWC strongly discourages DOE from considering regional standards or specifications as part of their analysis. While these are employed in certain parts of the U.S., they encompass non-energy efficiency related elements but do not account for all product types or approach things from a national perspective. (BWC, No.32 at p.6) DOE is not proposing any regional standards in this NOPR.
IV. Methodology and Discussion of Related Comments
This section addresses the analyses DOE has performed for this rulemaking with regard to consumer water heaters. Separate paragraphs address each component of DOE's analyses.
DOE used several analytical tools to estimate the impact of the standards proposed in this document. The first tool is a spreadsheet that calculates the LCC savings and PBP of potential amended or new energy conservation standards. The national impacts analysis uses a second spreadsheet set that provides shipments projections and calculates national energy savings and net present value of total consumer costs and savings expected to result from potential energy conservation standards. DOE uses the third spreadsheet tool, the Government Regulatory Impact Model (“GRIM”), to assess manufacturer impacts of potential standards. These three spreadsheet tools
are available on the DOE website for this proposed rulemaking:
www1.eere.energy.gov/buildings/appliance_standards/standards.aspx?productid=32
. Additionally, DOE used output from the latest version of the Energy Information Administration's (“EIA's”)
Annual Energy Outlook
(“
AEO”
), a widely known energy projection for the United States, for the emissions and utility impact analyses.
A. Market and Technology Assessment
DOE develops information in the market and technology assessment that provides an overall picture of the market for the products concerned, including the purpose of the products, the industry structure, manufacturers, market characteristics, and technologies used in the products. This activity includes both quantitative and qualitative assessments, based primarily on publicly-available information. The subjects addressed in the market and technology assessment for this rulemaking include (1) a determination of the scope of the rulemaking and product classes, (2) manufacturers and industry structure, (3) existing efficiency programs, (4) shipments information, (5) market and industry trends; and (6) technologies or design options that could improve the energy efficiency of consumer water heaters. The key findings of DOE's market assessment are summarized in the following sections. See chapter 3 of the NOPR TSD for further discussion of the market and technology assessment.
In the preliminary analysis, DOE sought comment on whether the manufacturer model counts from publicly available databases accurately reflect manufacturer market shares on a model- or sales-weighted basis. In response, AHRI and Rheem indicated that manufacturer model counts in publicly available databases do not accurately reflect manufacturer market shares. (AHRI, No. 31 at p. 16; Rheem, No. 45 at pp. 3-4) AHRI commented that the model count in a certification directory does not reflect sales volume and will provide an inaccurate view of the market. AHRI added that a manufacturer with a large number of models does not necessarily have a larger market share compared to a manufacturer with a smaller number of models. (AHRI, No. 42 at p. 2) DOE agrees with these comments and therefore did not consider database model counts alone to be representative of manufacturer market share in this NOPR's analyses. DOE considered market research
21
as well as market share feedback from confidential interviews with manufacturers to determine more accurate values. Additional details can be found in chapter 3 of the TSD.
21
Market shares data were found from Statista report
Residential water heater market share by vendor in the United States from 2018 to 2021,
available online at:
www.statista.com/statistics/700257/us-residential-water-heater-market-share/
(Last accessed May 1, 2023).
During a public meeting held on April 12, 2022, related to this rulemaking, NEEA noted that UEF ratings have increased over the last decade in products ranging from 40 to 80 gallons. (NEEA, No. 31, p. 7-8) DOE agrees that UEF ratings have generally increased over the last decade, and the latest efficiency distribution data were used to inform this NOPR analysis.
1. Product Classes
When evaluating and establishing energy conservation standards, DOE shall establish separate standards for a group of covered products (
i.e.,
establish a separate product class) if DOE determines that separate standards are justified based on the type of energy used, or if DOE determines that the group of covered products has a capacity or other performance-related feature that other products do not have and such feature justifies a different standard. (42 U.S.C. 6295(q)) In making a determination whether a performance-related feature justifies a different standard, DOE must consider such factors as the utility of the feature to the consumer and other factors DOE determines are appropriate. (
Id.
)
EPCA, as amended by the National Appliance Energy Act (NAECA; Pub. L. 100-12), established initial energy conservation standards, expressed as EF, that were based on three product classes differentiated by fuel type: (1) gas-fired, (2) oil-fired, and (3) electric. (42 U.S.C. 6295(e)(1)) These standards applied to consumer water heaters manufactured on or after January 1, 1990.
DOE subsequently amended these EF standards twice, most recently in the April 2010 Final Rule. 75 FR 20112. In the April 2010 Final Rule, DOE further divided consumer water heaters into product classes based on fuel type (gas-fired, oil-fired, or electric), product type (storage, instantaneous, tabletop), storage volume, and input rate.
The Energy Efficiency Improvement Act of 2015 (“EEIA 2015”) (Pub. L. 114-11), enacted on April 30, 2015, added a definition of “grid-enabled water heater” and a standard in terms of EF for such products to EPCA's energy conservation standards. (42 U.S.C. 6295(e)(6)(A)(ii)) DOE codified the definition for grid-enabled water heater and the associated energy conservation standards in a final rule published on August 11, 2015. 80 FR 48004.
Most recently, the December 2016 Conversion Factor Final Rule translated the EF-based standards to UEF-based standards for certain classes of consumer water heaters, which are shown in Table IV.1. Although the classes of consumer water heaters with UEF-based standards have limitations on the stored volume and (if applicable) fuel input rate, as discussed in that final rule, the standards established in EPCA do not place any limitation on the storage volume of consumer water heaters and do not define a minimum fuel input rate for gas-fired instantaneous water heaters. Therefore, the original standards established by EPCA in terms of EF remain applicable to all products without UEF-based standards. 81 FR 96204, 96209-96211.
The 36 product classes for which DOE has currently established UEF-based standards are summarized in Table IV.1. The product classes without UEF-based standards, for which EF-based standards from EPCA apply, are shown in Table IV.2.
Table IV.1—Consumer Water Heater Product Classes With Current UEF-Based Standards
Product type
Rated storage volume and input rating
(if applicable)
Draw patterns
Gas-Fired Storage Water Heater
≥20 gal and ≤55 gal
Very Small, Low, Medium, High.
Gas-Fired Storage Water Heater
>55 gal and ≤100 gal
Very Small, Low, Medium, High.
Oil-Fired Storage Water Heater
≤50 gal
Very Small, Low, Medium, High.
Electric Storage Water Heater
≥20 gal and ≤55 gal
Very Small Low, Medium, High.
Electric Storage Water Heater
>55 gal and ≤120 gal
Very Small, Low, Medium, High.
Tabletop Water Heater
≥20 gal and ≤120 gal
Very Small, Low, Medium, High.
Instantaneous Gas-Fired Water Heater
<2 gal and >50,000 Btu/h
Very Small, Low, Medium, High.
Instantaneous Electric Water Heater
<2 gal
Very Small, Low, Medium, High.
Grid-Enabled Water Heater
>75 gal
Very Small, Low, Medium, High.
Table IV.2—Consumer Water Heater Product Classes Without Current UEF-Based Standards
Product class
Rated storage volume and input rating
(if applicable)
Gas-fired Storage
<20 gal.
>100 gal.
Oil-fired Storage
>50 gal.
Electric Storage
<20 gal.
>120 gal
Tabletop
<20 gal.
>120 gal.
Gas-fired Instantaneous
<2 gal and ≤50,000 Btu/h.
≥2 gal.
Oil-fired Instantaneous
<2 gal.
≥2 gal.
Electric Instantaneous
≥2 gal.
In the March 2022 Preliminary Analysis, DOE used the conversion factor calculations applied in the December 2016 Conversion Factor Final Rule to translate EPCA's EF-based standards to equivalent UEF-based standards for the product classes in Table IV.2. The methodology and assumptions used for this conversion are described in detail in the preliminary TSD and in the NOPR TSD (see chapter 5). DOE is proposing to adopt UEF-based standards for these classes, which is further discussed in section IV.C.2 of this document.
a. Circulating Water Heater and Low-Temperature Water Heaters
As discussed in section III.B of this document, in the June 2023 TP Final Rule, DOE established definitions for “circulating water heater” and “low temperature water heater” in 10 CFR 430.2, and also established test procedures to determine the UEF of these types of water heaters. 88 FR 40406. DOE has identified three potential classes of circulating water heater based on fuel type, which are shown in Table IV.3. The input ratings associated with each product class are derived from the instantaneous water heater definitions in EPCA for each fuel type. (42 U.S.C. 6291(27))
Table IV.3—Proposed Classes of Circulating Water Heaters
Product class
Characteristics
Gas-fired Circulating Water Heater
A circulating water heater with a nominal input of 200,000 Btu/h or less; contains no more than one gallon of water per 4,000 Btu/h of input.
Oil-fired Circulating Water Heater
A circulating water heater with a nominal input of 210,000 Btu/h or less; contains no more than one gallon of water per 4,000 Btu/h of input.
Electric Circulating Water Heater
A circulating water heater with an input of 12 kW or less; contains no more than one gallon of water per 4,000 Btu/h of input (including heat pump-only units with power inputs of no more than 24 A at 250 V).
DOE is proposing to add these terms (“gas-fired circulating water heater,” “oil-fired circulating water heater,” and “electric circulating water heater”) to the definitions found at 10 CFR 430.2.
As discussed in the June 2023 TP Final Rule, DOE has determined that circulating water heaters with input ratings below 200,000 Btu/h (for gas-fired), 210,000 Btu/h (for oil-fired), or 12 kW (for electric) meet the definitional criteria for instantaneous consumer water heaters. As such, these products are subject to the applicable energy conservation standards; however, DOE previously provided an enforcement policy for circulating water heaters.
22
Because an amended test procedure that includes new provisions for testing circulating water heaters was recently finalized in the June 2023 TP Final Rule, DOE is proposing to establish updated UEF standards that reflect the new test method as discussed further in section IV.C.2 of this document. DOE did not consider amended standards for such products as part of this NOPR analysis in order to allow manufacturers time to test their products according to the updated test method and to develop sufficient data upon which to base future rulemaking analysis. As discussed in section V of this document,
DOE proposes to update the standards for other types of gas-fired instantaneous water heaters. Therefore, DOE also proposes to establish separate classes for circulating water heaters in order to maintain the standards at their current stringency.
22
Prior to the June 2023 TP Final Rule, DOE became aware of gas-fired instantaneous water heaters meeting the definition of consumer water heaters which operated differently than those DOE had previously considered in test procedure rulemakings. On September 5, 2019, DOE issued an enforcement policy for consumer water heaters meeting the definition of gas-fired “circulating water heater” as described in said enforcement policy in which DOE stated that it would not seek civil penalties for failing to certify these products, or if these products failed to comply with applicable standards, on or before December 31, 2021. The June 2023 TP Final Rule has since addressed this issue by establishing test procedures to determine UEF ratings for circulating water heaters.
AHRI expressed concern regarding DOE's coverage of gas-fired circulating water heaters as consumer products, stating that most are used in commercial applications. AHRI requested that DOE reinstate the enforcement policy on circulating water heaters, which was issued on September 5, 2019, and expired on December 31, 2021. (AHRI, No. 42 at pp. 5-6)
As discussed, DOE has previously determined that these products are appropriately classified under EPCA as consumer water heaters. In addition, as discussed in the June 2023 TP Final Rule, DOE has identified circulating water heaters compatible with residential applications, and the establishment of a test method to determine the UEF of these products removes the need for any further enforcement policy. 88 FR 40406.
DOE requests comment on its proposed deferral of consideration of amended, more-stringent standards for circulating water heaters.
Regarding low temperature water heaters, DOE notes that they are covered as electric instantaneous water heaters. As discussed in section III.A of this document, DOE is not considering updated standards for electric instantaneous water heaters for this NOPR. Therefore, although low temperature water heaters are tested in a slightly different manner as other electric instantaneous water heaters, DOE is proposing to maintain low temperature water heaters within the broader electric instantaneous water heater product class and is not proposing a separate class for them at this time.
b. Storage-Type and Instantaneous-Type Product Classes
In the March 2022 Preliminary Analysis, DOE addressed comments received in response to the May 2020 RFI that suggested that DOE should consider eliminating the separate product classes for instantaneous water heaters. For the preliminary analysis, DOE analyzed separate classes for instantaneous water heaters, but sought feedback from stakeholders on whether storage-type and instantaneous-type water heaters product classes should be combined. (See section 2.3 of the preliminary TSD.)
In response, AHRI, BWC, and Rheem urged DOE not to combine storage and instantaneous product classes, commenting that this would be inconsistent with EPCA. (AHRI, No. 31 at p. 15; AHRI, No. 42 at p. 2; BWC, No. 32 at p. 1; Rheem, No. 45 at p. 2) AHRI stated that storage and instantaneous water heaters each provide unique utility to consumers due to their smaller footprint, and storage water heaters provide unique utility in that they allow consumers to participate in demand-response programs. AHRI asserted that combining the two product classes could decrease consumer utility if standards were set such that either storage or instantaneous water heaters were precluded from the market. (AHRI, No. 42 at p. 2) BWC requested that DOE not merge the storage and instantaneous product classes of gas-fired water heaters because they have different installation requirements and are useful in different situations. (BWC, No. 32 at p. 1) BWC stated that instantaneous water heaters are typically wall-hung, reducing the required floor space, and models are available for installation outdoors. BWC stated that storage water heaters, unlike instantaneous water heaters, maintain a volume of water available use immediately once a draw commences (whereas instantaneous water heaters take additional time to heat the water). BWC asserted that storage water heaters also provide hot water utility for applications which require large “dump loads” such as large tubs or multiple, concurrent, hot water draws by baths, showers, laundry, and/or dishes. Lastly, BWC also noted that storage water heaters can be utilized in demand response programs to store hot water for use when utility rates are high. (
Id.
)
Rheem suggested that combining storage and instantaneous product classes will lead to UEF standards that are not technologically feasible for some volume and input ranges because the standard cannot be lowered. Rheem also stated that combining storage and instantaneous water heaters into the same products class could result in one type of water heater being regulated out of existence or prevent DOE from amending standards to the maximum technologically feasible and economically justified level. (Rheem, No. 45 at p. 2) Rheem stated that the ability to store heated water is a performance-related feature that justifies a separate analysis for storage and instantaneous due to differences in operation, installation, and application. Rheem cited electric instantaneous as an example of a product ideal for hand-washing and low continuous flow point-of-use applications, while electric storage water heaters are better suited for higher flow rates with shorter draws such as to fill a bathtub or supply a shower. Rheem also noted that electric instantaneous water heaters require significant electrical panel capacity to serve an entire home, whereas electric storage water heaters use a much lower panel capacity. Finally, Rheem noted that the ability of storage water heaters to operate in thermal storage programs further differentiates their utility from instantaneous water heaters. (
Id.
)
DOE has tentatively determined that the existing separate product classes for storage and instantaneous water heaters—both electric and gas-fired—should be maintained. Storage and instantaneous water heaters offer distinct utilities to a consumer. For example, instantaneous water heaters provide a continuous supply of hot water, up to the maximum flow rate, while storage water heaters are often better suited to handle large initial demands for hot water as opposed to continuous draws. The ability of an instantaneous water heater to supply hot water continuously is directly attributed to its input rate and storage volume (
i.e.,
the input rate to storage volume ratio). Statutorily, consumer storage water heaters are limited to ratios of no more than 4,000 Btu/h per gallon and consumer instantaneous water heaters are greater than 4,000 Btu/h per gallon. 42 U.S.C. 6291(27)(B). Therefore, instantaneous water heaters possess an inherently distinct capacity to provide a continuous supply of hot water to the consumer. Additionally, storage water heaters have associated standby energy losses that instantaneous water heaters do not. Due to these differences in consumer utility and operational characteristics, DOE has tentatively determined that different product classes and standards for storage and instantaneous water heaters are necessary.
c. Gas-Fired Water Heaters
In response to the March 2022 Preliminary Analysis, several interested parties provided recommendations for the product classes for gas-fired water heaters.
Atmos urged DOE to consider the impact that not distinguishing between condensing and non-condensing water heaters will have on whether Category I venting
23
water heaters remain on the
market. (Atmos, No. 38 at p. 5) The Gas Association Commenters urged DOE to reconsider the conclusions reached in the December 2021 Venting Interpretive Final Rule,
24
specifically with regard to gas-fired instantaneous water heaters, for which a condensing-level standard may be economically justifiable. The Gas Association Commenters Indicated that a condensing-level standard would lead to product unavailability for atmospherically vented gas-fired water heaters. (Gas Association Commenters, No. 41 at pp. 3-4)
23
A Category I vented appliance is defined by the National Fire Protection Association (NFPA) and the American National Standards Institute (ANSI) in chapter 3 of NFPA 54-2021/ANSI Z223.1, the National Fuel Gas Code, as “an appliance that operates with a nonpositive vent static pressure and
with a vent gas temperature that avoids excessive condensate production in the vent.”
24
On December 29, 2021, DOE published a final interpretive rule (“December 2021 Venting Interpretive Final Rule”) reinstating its long-standing interpretation that the heat exchanger technology and associated venting used to supply heated air or hot water is not a performance-related “feature” that provides a distinct consumer utility under EPCA. 86 FR 73947.
ONE Gas recommended DOE maintain its breakout of the gas-fired storage water heater analysis in the preliminary TSD by Category I, III, and IV
25
products and consider subdividing analysis of Category I into subcategories that require electric power (such as for induced draft and power damper models) and those that do not, as this split in the analysis would support compliance with 42 U.S.C. 6295(q)(1). ONE Gas also requested that DOE clarify why gas-fired products which require electricity to operate are not considered to “consume a different kind of energy.” (ONE Gas, No. 44 at p. 8) The Gas Association Commenters urged DOE to consider separate product classes for gas-fired water heaters that do not require an external electrical power supply, which they claimed could be eliminated by amended energy conservation standards achievable only by condensing products. The Gas Association Commenters added that all products which do not require electricity have a standing pilot and are noncondensing, and hence would become unavailable. These commenters also indicated that such products have a unique utility to be able to operate during outages or entirely off the grid. (Gas Association Commenters, No. 41 at p. 4)
25
The National Fuel Gas Code, NFPA 54-2021/ANSI Z223.1, defines a category III vented appliance as “an appliance that operates with a positive vent static pressure and with a vent gas temperature that avoids excessive condensate production in the vent.” It defines a category IV vented appliance as “an appliance that operates with a positive vent static pressure and with a vent gas temperature that can cause excessive condensate production in the vent.”
As discussed at the beginning of this section, DOE shall establish separate product classes for a covered product based on: (1) fuel source; and (2) whether a type of product offers a unique capacity or other performance-related feature that justifies a different standard. (
See
42 U.S.C. 6295(q)(1))
In response to commenters' suggestions that DOE further consider whether to distinguish between non-condensing and condensing water heaters (or associated venting) for the purposes of establishing a separate product class, DOE reiterates its position stated in the March 2022 preliminary analysis that, consistent with the December 2021 Venting Interpretive Final Rule, non-condensing technology does not constitute a performance-related “feature” that provides a distinct utility to consumers as prescribed by EPCA at 42 U.S.C. 6295(q)(1). (
See
chapter 2 of the preliminary analysis TSD; 86 FR 73947.) In short, the type of technology (non-condensing or condensing) or venting used by the appliance, does not provide any utility to the consumer that is accessible to the layperson, which is based upon the consumer's operation of or interaction with the appliance. Therefore, there is no difference in the utility derived from the appliance based on these factors. 86 FR 73947, 73951, 73953. As explained in the Venting Interpretive Final Rule, DOE considers any additional costs associated with venting as part of its determination that an energy conservation standard is economically justified.
Id.
at 86 FR 73960. Because neither non-condensing operation, nor atmospheric, category I venting (which is associated with non-condensing operation) meet the requirements to be considered a performance-related “feature” as outlined at 42 U.S.C. 6295(q)(1), DOE is not proposing separate product classes specifically to preserve this capability in gas-fired water heaters. DOE similarly finds that other venting categories (
e.g.,
category IV venting) are also not a performance-related feature under EPCA.
Regarding the recommendations that DOE separate product classes based on whether or not a gas-fired water heater uses auxiliary electricity, DOE has long held that use of auxiliary electric power in gas-fired products does not constitute “consuming a different kind of energy” from those that do not use auxiliary electric power under EPCA. EPCA defines “energy” as meaning electricity, or fossil fuels.
26
(42 U.S.C. 6291(3)) EPCA initially separated water heaters by fuel type into only gas-fired, oil-fired, and electric water heaters product classes. (42 U.S.C. 6295(e)(1)) Although commenters have suggested that products that use both gas and electricity could be thought of as being gas-fired water heaters and electric water heaters, the usage of electricity in gas-fired water heaters is only a means to power auxiliary components and not to heat the water. Therefore, DOE has historically considered these products to be only gas-fired water heaters.
26
The definition of “energy” also provides that the Secretary may, by rule, include other fuels within the meaning of the term “energy” if he determines that such inclusion is necessary or appropriate to carry out the purposes of this chapter. (42 U.S.C. 6291(3))
As for whether use of auxiliary electricity constitutes a unique performance-related feature, DOE notes that, in an April 8, 2009 final rule, DOE declined to define separate product classes for gas cooking products that do not require electricity because DOE was unable to identify any unique utility associated with gas cooking products equipped with standing pilot ignition, compared to those with electronic ignition. While DOE considered that the ability to operate in the case of an atypical event such as the loss of line power was of benefit to consumers, DOE determined that battery-powered electronic ignition systems could provide ignition in the absence of line power and noted that such ignition systems already had been implemented in other products including portable gas-fired instantaneous water heaters. As such, consumer water heaters with standing pilot lights are not unique in the ability to operate during outages or entirely off the grid. Thus, DOE has tentatively determined that a separate product class for consumer water heaters with standing pilot lights is not warranted under 42 U.S.C. 6295(q)(1).
d. Electric Storage Water Heaters
In the March 2022 Preliminary Analysis, DOE tentatively determined not to separate heat pump electric storage water heaters from the electric storage water heater product class. DOE noted that to the extent that heat pump electric storage water heaters use electricity to heat, they meet EPCA's definition of an electric storage-type water heater (see 42 U.S.C. 6291(27)(A)) and are subject to the current standards for electric storage water heaters at 10 CFR 430.32(d). (See chapter 2 of the preliminary TSD.) This position is also consistent with the April 2010 Final Rule. In that rule, DOE found that heat pump water electric storage water heaters did not meet the requirements for establishing a separate product class. 75 FR 20112, 20135. As stated previously, DOE establishes separate product classes based on two criteria: (1) fuel source; and (2) whether a type
of product offers a unique capacity or other performance-related feature that justifies a different standard. (
See
42 U.S.C. 6295(q)(1)) In the April 2010 Final Rule, DOE noted that both heat pump electric storage water heaters and electric resistance storage water heaters use electricity as the fuel source. 75 FR 20112, 20135. As for capacity, DOE observed that heat pump electric storage water heaters were being offered as direct replacements for electric resistance storage water heaters.
Id.
DOE also noted that rated storage volumes and first hour ratings of heat pump electric storage water heaters were comparable to electric resistance storage water heaters.
Id.
Finally, DOE did not identify any other performance-related features that were unique to either heat pump electric storage water heaters or electric resistance storage water heaters.
Id.
EEI disagreed with DOE's decision in the preliminary analysis not to create a separate product class for heat pump electric storage water heaters and expressed concern over expanding heat pump-level standards to more electric storage water heaters than they currently apply to. (EEI, No. 31 at p. 35)
Cirker also commented that DOE should consider separating out product classes for electric resistance storage water heaters from heat pump electric storage water heaters on the basis of personal experience with three heat pump water heaters installed within the commenter's home exhibiting a wider range of performance characteristics, including, at times, lower delivery capacity. (Cirker, No. 30 at p. 1)
Based on its current market assessment, DOE has tentatively determined that the conclusions reached in the April 2010 Final Rule remain valid. Heat pump electric storage water heaters and electric resistance water heaters use electricity as the fuel source. They both offer similar capacities as evidenced by first hour ratings certified to DOE, which range between 29 gallons and 80 gallons for electric resistance storage water heaters and between 41 gallons and 95 gallons for heat pump electric storage water heaters. Finally, DOE has not identified any unique performance-related features offered by either heat pump electric storage water heaters or electric resistance storage water heaters. As discussed in the Venting Interpretive Final Rule, DOE considers performance-related features to be those aspects of the appliance with which the consumer interacts during operation of the product. 86 FR 73947, 73955.
For consumer water heaters, which are products that traditionally do not receive daily consumer interaction, storage capacity and delivery capacity are the main performance features that impact consumer utility. Water heater capacity reflects that amount of hot water available to the consumer for use, and this also impacts the efficiency of the product. Hence, DOE has currently-established standards which take into account capacity ranges for consumer water heaters. On the other hand, the technology used to heat the water, heat pump or electric resistance, is not something a consumer would interact with during operation of the water heater. As a result, DOE maintains its position from the April 2010 Final Rule and the March 2022 Preliminary Analysis that heat pump electric storage water heaters and electric resistance storage water heaters do not warrant separate product classes.
Plug-In and Split-System Heat Pump Electric Storage Water Heaters
While DOE has tentatively determined that heat pump electric storage water heaters do not warrant their own product class, NYSERDA also recommended that DOE create additional definitions and product classes for plug-in (120 volt (V)/15 ampere (A)) and split-system heat pump electric storage water heaters to allow these products to enter the market and increase market share. (NYSERDA, No. 35 at pp. 6-7) NEEA, ACEEE, and NWPCC also urged DOE to consider plug-in heat pump water heaters in its analysis and to consider whether a separate standard for them would be warranted, given that they are expected to be commercially available by the end of 2022. (NEEA, ACEEE, and NWPCC, No. 47 at p. 7) The CA IOUs requested DOE create a separate product class (or lower efficiency levels if a separate product class is not possible) for split-system heat pump water heaters and plug-in heat pump water heaters because of their unique ability to serve installation scenarios that would be difficult or impossible for unitary (240 V) heat pump water heaters. (CA IOUs, No. 39 at p. 2)
In response to these comments, DOE first notes that it did not consider plug-in heat pump water heaters in the March 2022 Preliminary Analysis as they were not commercially available in the U.S. market at the time. (
See
Chapter 2 of the preliminary TSD). While there are now a limited number of plug-in heat pump water heaters available in the U.S. market, DOE still does not have sufficient information to determine how use of plug-in voltage (120 V) and current (15 A) affects performance and efficiency. As a result, even if DOE were to make a determination that use of plug-in voltage and current constitutes a unique performance-related feature, the Department would be unable to make the necessary finding that a higher or lower efficiency standard is justified for these types of water heaters. DOE may consider establishing a separate product class for plug-in heat pump electric storage water heaters in a future rulemaking.
With respect to establishing a separate product class for split-system heat pump electric storage water heaters, DOE notes the analysis is very similar to what was discussed for heat pump electric storage water heaters. Split-system heat pump water heaters use the same fuel source, electricity, as other electric storage water heaters. DOE also has not identified any unique performance-related features offered by split-system heat pump water heaters that would warrant a separate product class consideration at this time. And, as DOE stated previously, the type of technology used to heat the water, in this case a split-system heat pump, is not something a consumer would interact with during operation of the water heater.
Grid-Enabled Water Heaters
NYSERDA urged DOE to further define grid-enabled water heaters for consistency on connectedness. (NYSERDA, No. 35 at p. 7) In response, DOE notes that grid-enabled water heaters are defined in EPCA. (see 42 U.S.C. 6295(e)(6)(A)(ii)) DOE has not found it necessary at this time to further define connectivity.
Small Electric Storage Water Heaters and Tabletop Water Heaters
Current product classes for electric storage water heaters are based on rated storage volume (capacity) and draw pattern.
See
10 CFR 430.32(d). There are product classes for electric storage water heaters with storage volumes greater than 20 gallons and less than or equal to 55 gallons, and product classes for electric storage water heaters with storage volumes greater than 55 gallons and less than or equal to 120 gallons. As discussed in section III.F of this document, DOE received a Joint Stakeholder Recommendation for amended water heater standards, that included recommended standard levels for electric storage water heaters. In particular, the Joint Stakeholder Recommendation suggested setting different standards for smaller electric storage water heaters.
In response, DOE notes that the efficiency of an electric storage water heaters is typically increased by adding
insulation to the water heater or by incorporating a new technology into the design, such as a heat pump. When implementing these technology options, the water heater's outer dimensions typically are increased to maintain the same internal tank size (and hold the same volume of water). DOE reviewed its existing product classes for electric storage water heaters with storage volumes less than or equal to 55 gallons and greater than 20 gallons to determine whether further subdividing these product classes is warranted. DOE's market data for electric storage water heaters suggests there is a certain category of electric storage water heaters that are limited in their physical size due to the places they are typically installed. Some of these water heaters are commonly referred to as “lowboy” water heaters and have restrictions on their physical size to facilitate installation in crawl spaces, in attics, and under staircases, which have finite space constraints that define physical size limitations for the water heater. The physical size limitation of the unit restricts the amount of hot water that can be provided to the household.
In order to determine how to best characterize these “small water heaters,” DOE looked at the amount of hot water they produce and their effective storage volumes. DOE found that most “small electric storage water heaters” in the market today offer an effective storage volume greater than or equal to 20 gallons and less than or equal to 35 gallons and deliver first-hour ratings less than 51 gallons. Due to their low capacities “small electric storage water heaters” fall into the very small or low usage draw patterns.
Thus, DOE tentatively concludes that this restriction is a performance-related feature affecting energy efficiency that would warrant a separate product class. In addition, the physical size limitation constrains the technology options that can be considered to increase the efficiency of these water heaters. For example, the maximum technologically feasible efficiency level for electric storage water heater utilizes heat pump water heater technology. For those water heaters that are physically space-constrained, the max-technology efficiency level must be a split-system heat pump water heater since integrating the heat pump into the top of the tank is physically prohibited by the constraints of the installation. This is discussed further in sections IV.C.1.a and IV.C.1.b of this NOPR.
In this proposed rulemaking, DOE has analyzed splitting the existing 20-55 gallon product classes for electric storage water heaters by establishing new “small electric storage water heater” product classes.
The proposed electric storage product classes would be: (1) electric storage water heaters with an effective storage volume greater than or equal to 20 gallons and less than or equal to 35 gallons, with first-hour ratings less than 51 gallons (“small electric storage water heaters”); and (2) electric storage water heaters with an effective storage volume greater than or equal to 20 gallons and less than or equal to 55 gallons (excluding small electric storage water heaters). The electric storage product classes analyzed in this NOPR are summarized below in Table IV.4.
Table IV.4—Electric Storage Water Heater Product Classes
Current Product Class Structure
≥20 gallons, ≤55 gallons, All draw patterns
>55 gallons, ≤120 gallons, All draw patterns.
New Product Class Structure Being Considered
Small Electric Storage Water Heaters ≥20 gallons, ≤35 gallons, Very small and low draw patterns *
≥20 gallons, ≤55 gallons, All draw patterns, excluding “small electric storage water heaters”
>55 gallons, ≤120 gallons, All draw patterns.
* These products are collectively referred to as “small electric storage water heaters.”
Tabletop water heaters, which typically have around 35 gallons of rated storage volume, also have very particular dimensions in order to be used as a kitchen workspace. DOE is not proposing to amend the standards for tabletop water heaters in this rulemaking based on the market assessment for these products (see section IV.C.1.a for details). There are only two basic models of tabletop water heaters on the market currently. Because of the similarities between tabletop water heaters and small electric storage water heaters, DOE is proposing to create alignment between the standards for these types of products. Specifically, in this NOPR, DOE proposes to amend the definition of “tabletop water heater” to specify that the tabletop designation of electric storage water heaters is only applicable to products in the very small or low draw pattern. As a result of this proposal (if finalized), any tabletop water heaters in the medium and high draw patterns would henceforth be considered in the broader electric storage water heater product classes. Out of the two basic models of tabletop water heaters certified to DOE, one is in the low draw pattern and will not be affected by the proposal. The other is in the medium draw pattern. DOE expects that this medium draw pattern tabletop model can be redesigned to meet the low draw pattern requirements with limited product conversion cost to the manufacturer.
DOE requests comment on its proposal to limit the tabletop water heater designation to products in the very small and low draw patterns.
2. Technology Options
As described in section III.C.1 of this document, DOE conducts a technology assessment to identify a complete list of technologies for consumer water heaters (“technology options”) with the potential to improve the UEF ratings of products. Section IV.B of this document describes the process by which technology options are screened in a separate screening analysis that aims to determine which technology options could feasibly be adopted based on five screening criteria. Finally, in the engineering analysis (section IV.C of this document), DOE selects the technology options that are most likely to constitute the design pathway to higher efficiency levels in a standards-case scenario (thereafter referred to as “design options”). Thus, after DOE identifies a comprehensive list of technologies for the technology assessment, the subsequent analysis focuses only on those technologies that are the most likely to be implemented in response to amended standards.
In the preliminary market analysis and technology assessment, DOE
identified numerous technology options that would be expected to improve the efficiency of consumer water heaters, as measured by the DOE test procedure. These technology options were presented in chapter 3 of the preliminary TSD. DOE requested feedback on the technology options identified and on whether there are additional technologies available that may improve consumer water heater performance.
In response to the March 2022 Preliminary Analysis, the Joint Advocates requested that DOE evaluate 120 V/15 A heat pump water heaters because their commercial availability is expected to increase throughout 2022. (Joint Advocates, No. 34 at pp. 2-3) Rheem commented that there will be 120 V electric water heaters, including heat pump water heaters, on the market during the 30-year analysis timeframe. (Rheem, No. 45 at p. 4) In response, DOE has included 120 V HPWHs in its technology assessment for electric storage heat pump water heaters in this NOPR. However, as described further in chapter 3 of the NOPR TSD, there are currently very few models of 120 V heat pump water heaters available on the market, and DOE has not analyzed these designs directly in the engineering analysis due to the lack of information on these models and whether these designs would constitute the most cost-effective pathway to improved energy efficiency for electric storage water heaters. DOE's initial findings on the potential efficiency of 120 V heat pump water heaters are detailed in chapter 3 of the NOPR TSD.
DOE requests comment on the outlook for the emergence of 120 V heat pump water heaters, information regarding how their design and operation may differ from 240 V heat pump water heaters, and data on performance characteristics and efficiencies.
Rheem recommended DOE add an inlet damper to the list of technology options but indicated that this technology option may not be suitable for the entire gas-fired storage water heater product class. Rheem stated that it has concerns that the technology may have limitations for some installation applications. (Rheem, No. 45 at p. 3) Based on its independent research and discussions with manufacturers, DOE understands the technology in question to be gas-actuated flue dampers, which are installed at the air intake inlet (hence the term used by the commenter, “inlet damper”). The Joint Advocates urged DOE to evaluate gas-actuated, non-powered dampers, which require no external power source and instead use a self-powered gas valve to generate the power needed to operate, for gas-fired storage water heaters as a potentially lower-cost alternative to other damper technology options. (Joint Advocates, No. 34 at p. 2) As discussed further in chapter 3 of the NOPR TSD, DOE agrees with Rheem and the Joint Advocates that gas-actuated flue dampers are a viable technology option for gas-fired storage water heaters and has therefore included them in its updated analyses for this NOPR.
AHRI and BWC opposed DOE's inclusion of modulating burners as a technology option for gas-fired storage, oil-fired storage, and gas-fired instantaneous water heaters because modulating burners are, to their knowledge, used only in gas-fired instantaneous water heaters in the consumer market. (AHRI, No. 42 at p. 3; BWC, No. 32 at p. 3) BWC added that adjusting the fuel-to-air ratio is typically done only in commercial applications (with the possible exception of consumer gas-fired instantaneous water heaters) as it is very sophisticated and costly. (BWC, No. 32 at p. 3)
In response to comments from AHRI and BWC, DOE notes that it is technologically feasible to use modulating burners in fossil fuel-fired products, and therefore, it has been included in the list of technology options available for consumer water heaters. However, in the engineering analysis of the March 2022 Preliminary An
This text is long and has been trimmed here. Open the source document for the complete record.
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.