Proposed Water Heater Standards Could Save Consumers $11.4 Billion Annually

Households could see $1,868 cost cut over life of appliance, DOE says.

home heating oil price
An illustration of a house is in the background with a large, red-colored barrel of oil in front of it.
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Consumers would save a total of $11.4 billion annually on water and energy bills under the Department of Energy’s (DOE) newly proposed energy efficiency standards for water heaters.

The standards, which are mandated by Congress, would require replacing common-sized traditional electric resistance storage water heaters with heat pump technology and gas-fired instantaneous water heaters to achieve efficiency gains through condensing technology. The standards are expected to reduce 501 million metric tons of carbon dioxide emissions cumulatively over 30 years, the agency said.

Over the life of an appliance, the new heaters would save a consumer an average of $1,868, the DOE said. The savings would be even higher for renters and low-income households who spend a higher percentage of their income on utility bills, it added. As Kiplinger recently reported, high utility bills have forced some households to scale back on other expenses.

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Water heating is responsible for roughly 13% of both annual residential energy use and consumer utility costs, said the DOE, which last updated residential water heater efficiency standards in 2010. If this proposal is adopted, the new rule would apply to new water heater models starting in 2029.

So far this year, the DOE has issued proposed or final efficiency standards for 18 product categories, including this one. Separate standards would raise the minimum efficiency levels for gas-fired storage water heaters, gas-fired instantaneous water heaters, and oil-fired storage water heaters based on technology improvements for those products.

“Today’s actions, together with our industry partners and stakeholders, improve outdated efficiency standards for common household appliances, which is essential to slashing utility bills for American families and cutting harmful carbon emissions,” Energy Secretary Jennifer M. Granholm said in a statement.

Under various incentives in the Inflation Reduction Act, signed into law last year, homeowners can look to make green home improvements and save money on utility bills, as Kiplinger previously reported.

Homeowners and renters can visit the DOE website for energy-related tips and incentive programs aimed at cutting costs.

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Esther D’Amico
Senior News Editor

Esther D’Amico is Kiplinger’s senior news editor. A long-time antitrust and congressional affairs journalist, Esther has covered a range of beats including infrastructure, climate change and the industrial chemicals sector. She previously served as chief correspondent for a financial news service where she chronicled debates in and out of Congress, the Department of Justice, the Federal Trade Commission and the Commerce Department with a particular focus on large mergers and acquisitions. She holds a bachelor’s degree in journalism and in English.