The Biden administration is proposing to tighten energy efficiency standards for new residential water heaters–the second-largest energy-using appliances in most households. Heating and cooling are the largest residential use of energy with water heating accounting for about 13 percent of both annual residential energy use and consumer utility costs. If finalized, the proposal would take effect in 2029. Under the Department of Energy’s proposal, the most commonly-used electric water heaters would be required to use heat pump technology in place of electric resistance, while gas-fired instantaneous water heaters would be required to use condensing technology. The rule would also set standards for gas-fired storage water heaters and oil-fired water storage water heaters. The Energy Department expects the rule to reduce energy use from residential water heaters by 21 percent.


Fast Facts

  • Biden’s Energy Department has proposed a new efficiency standard for home water heaters that require 90 percent efficiency for tankless and 70 percent efficiency for tank gas-fired water heaters.
  • At least one tankless manufacturer has proclaimed the new efficiency standard impossible to meet.
  • Energy-saving mandates have historically led to more expensive but less effective appliances.
  • Increasing costs for water heating presents hardships for poorer Americans, but the Administration insists energy savings will make up for the higher upfront costs.


The proposed rule would raise standards for tankless gas-fired water heaters to 90 percent efficiency and leave the standards for tank gas-fired water heaters at 70 percent efficiency. Achieving 90 percent efficiency with non-condensing technology is “technologically impossible,” according to Rinnai America President Frank Windsor. “Consumers who rely on access to tankless water heaters will see their options limited, resulting in higher energy bills and shorter appliance lifespans, while the very environmental goals prompting this rule will go unfulfilled.” According to Rinnai America, which sells tankless water heaters, the standards will “unreasonably restrict consumer access” to some products and ultimately put domestic jobs at risk.

According to the Energy Department, the water heater standards, which were last updated in 2010, were required by Congress and had the backing of two of the largest water heater manufacturers. The water heater rule is estimated to cost manufactures more than $228 million in conversion costs to bring water heaters into compliance and $2.2 billion a year in increased product costs, resulting in $19 billion in total “incremental product costs,” making it the costliest set of energy efficiency standards thus far during the Biden Administration. But, according to the department, the rule would result in far more annual benefits. It would supposedly save consumers about $11.4 billion in energy and water costs annually, totaling $198 billion and reduce 501 million tons of carbon dioxide emissions over the rule’s 30-year lifetime.  The Biden Administration has an “all of government” approach to climate policies stemming from the president’s promise to “end fossil fuels.”

The Department of Energy is planning to hold a webinar on September 13 to hear public comment on the proposal, and will accept written comments for 60 days after the proposed rule has been published in the Federal Register. Comments regarding the competitive impact of the proposed rule should be sent to the U.S. Department of Justice within 30 days.

Other Department of Energy Actions

Energy efficiency standards for household appliances have been under political scrutiny during the Biden administration. In January, a U.S. Consumer Product Safety Commissioner wanted to ban gas stoves, drawing outrage from Congress and the public. Despite the White House issuing a statement that said the president did not support banning gas ranges, Biden’s Department of Energy issued new efficiency rules in February that would take at least 50 percent of the gas stove models off the market, and according to some, as many as 95 percent. Gas stoves are used in about 35 percent of households nationwide, or about 40 million homes. The household figure is closer to 70 percent in some states, such as California and New Jersey. Other states where many residents use gas stoves include Nevada, Illinois and New York.

In May, the Department of Energy released tighter rules for dishwashers, which would cut water use by more than one-third and energy use by 27 percent for dishwashers sold in the United States. The changes would apply to new models on sale once the new rules officially come into effect, which is expected to be in 2027. Manufacturers would be forced to limit dishwashers to using 3.2 gallons of water per cycle, far below the current federal limit of 5 gallons, and reduce their products’ energy consumption by nearly 30 percent. While most dishwashers on the market meet the Energy Star Standard of 3.5 gallons per cycle, they would still need to be redesigned to cut energy use. The result of the new rules would be higher upfront prices for the appliance, making it more difficult for lower-income Americans to afford them, hitting poor Americans especially hard. Appliance performance has historically been affected by energy regulations, with many consumers complaining of extraordinarily long cycle times and dishes that are not clean when finished.


The Biden Energy Department has issued over 100 energy efficiency rules on appliances and household equipment, which they claim will fight climate change and save consumers money. If that were true, market forces would have resulted in the same goals without needing the federal government to enforce them. Historically, appliances the Energy Department reviewed ended up performing worse and costing more. DOE rulemaking, combined with state and local efforts to ban natural gas hook-ups in new homes and buildings, is how the federal government and environmentalists plan to take gas stoves and now gas water heaters away from consumers.

Stressed families, already pressed for time and struggling to pay bills, may find Biden’s climate agenda frustrating given the continuing string of performance-robbing regulatory changes the Biden Administration is forcing upon them, for which they will be paying upfront and possibly operational costs as well.

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