Big Changes Coming for Water Heater Efficiency. Are You Ready?

New water heater efficiency standards that go into effect April 15, 2015 will require significant changes to the installation of residential water heaters – but just for those larger than 55 gallons in capacity.

The new 2015 DOE (Department of Energy) Final Rule energy efficiency mandates will require higher Energy Factor (EF) ratings on virtually all residential gas, electric, oil and tankless gas water heaters, completely altering the water heater landscape.

These mandates will require much higher Energy Factor (EF) ratings, making a huge impact on how larger water heaters are manufactured, distributed and installed. However, products manufactured before April 15 can still be bought and installed after the changeover date.

There are many factors for home builders and remodelers to consider when deciding whether to spec these new water heaters. First is the cost: Conventional, current minimum-efficiency 60-gallon gas and electric water heaters are approximately $675-$1,500, while the new high-efficiency models are about $1,200-$2,450.

New gas water heaters with a capacity of more than 55 gallons will need to be a condensing combustion design to meet the new efficiency requirements, which raises the EF from 0.55 to 0.75 for a 65-gallon model. This means you’ll need a dedicated electrical receptacle to power the exhaust fan and provide a means for condensate disposal. For venting, a dedicated line for combustion air via a lower temperature PVC pipe will typically exhaust through the wall rather than the roof with this design.

Larger electric water heaters will need to be of a heat-pump design to meet the efficiency requirements, which increases the EF from 0.88 to 1.98 for a 65-gallon model. Where a 3 feet x 3 feet closet was often the go-to location for installation for an electric water heater, these new appliances likely wont’ fit into the same space.

According to the Air Conditioning, Heating, & Refrigeration Institute, heat pump water heaters require installation in locations that remain in the 40º–90ºF range year-round and provide at least 1,000 cubic feet of surrounding air space. Because heat pump water heaters remove heat from the house to heat the water, it’s better to install them in warmer areas of the country where the cooling effect of the heat pump will reduce the air conditioning load on the house.

But even if your project needs a extra-large hot water supply, it doesn’t necessarily need these extra-large heaters, say energy advocates.

Gary Klein, managing partner of  Aim 4 Sustainability, says one alternative is to run new plumbing to two smaller water heaters (i.e., 40 gallons) at opposite sides of the home, bringing them closer to the point of use and conserving both water and energy by eliminating excess piping.

For gas water heaters there may not be much of a benefit from purchasing two appliances, the installation of another gas line, and compliance with ventilation requirements. However, not only can the two electric water heaters fit in smaller spaces, there is no need to manage the cold air expelled from the unit or for the design to account for proximity to fixtures to decrease heat loss in piping.

Another alternative: the gas or electric tankless water heater. These units take up little space and can be mounted indoors in cabinets, under sinks, and in very close proximity to fixtures, using less energy than conventional water heaters.

However, gas tankless water heaters may require a larger gas line and modifications to the vent pipe. Electric tankless models may require increasing the capacity of the electric service to the house. Hot water flow rate is limited by the size of the unit and measured in gallons per minute (GPM). Whole-house tankless hot water systems with up to 7.0 GPM can cost $600-$1,000.

It’s important for installers to become familiar with the new rules and the technology options so that they can offer customers the best solutions for placement and capacity.

Water heater manufacturers also provide detailed information on their websites to help builders and remodelers choose the best possible option for the home.

For more information, contact Cai Owens at 800-368-5242 x8563 or via email at