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DOE Proposes New Energy Efficiency Standards for Water Heaters to Save Americans More Than $11 Billion Annually on Utility Bills

The U.S. Department of Energy (DOE) has proposed new energy standards that will save homeowners money on their energy and water bills. The amount of savings is approximately $11.4 billion.

According to the Department of Energy, water heating is responsible for roughly 13% of both annual residential energy use and consumer utility costs. DOE last updated residential water heater efficiency standards, which are required by Congress, in 2010. If adopted within DOE’s proposed timeframe, the new rule—which builds on consensus-based recommendations from a wide range of stakeholders—would apply to new water heater models starting in 2029.

Replacing common-sized traditional electric resistance storage water heaters with electric heat pump water heaters meeting the proposed levels would save consumers $1,868 on average over the life of the appliance, with savings even higher for renters and low-income households who spend a higher percentage of their income on utility bills. President Biden’s Inflation Reduction Act also expands the accessibility and increases the affordability of heat pump water heaters through tax credits, rebates, and other incentives, making it easier for families across the nation to switch to a more efficient model when deciding to replace a water heater—and benefit from years of utility bill savings as a result.

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. Overall, the proposed rule would reduce energy use from residential water heaters by 21%, which translates into $11.4 billion in consumer savings and $2.8 billion in health benefits each year.

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