Biden administration proposes new commercial water heater efficiency rules

The Department of Energy on Thursday announced new proposed energy efficiency rules for commercial hot water heaters that would require the use of condensation technology. 

The department projects that the proposed rules could save up to $140 million in energy costs per year and up to $2.4 billion over 30 years. They are also projected to reduce carbon emissions by the equivalent of 4.8 million homes and slash methane emission by 2.3 million cars’ worth. 

Water heaters are a major driver of energy costs and most are a model that has not been meaningfully upgraded in about a century.

A 2021 report from the American Council for an Energy-Efficient Economy estimates they are particularly energy inefficient in multihousehold buildings, where they use more energy than cooling, light or space heating.

The same analysis projects that replacing those units with energy efficient hot water heaters would cut their greenhouse gas emissions by an estimated 58 percent. 

In commercial buildings, meanwhile, the cost of heating with gas-powered equipment comprises nearly 20 percent of commercial buildings’ natural gas usage, according to the Energy Information Administration.  

“Water heating accounts for a considerable share of energy costs and domestic carbon emissions,” Kelly Speakes-Backman, principal deputy assistant secretary for energy efficiency and renewable energy, said in a statement. “Modernizing commercial water heater technology will slash energy costs for schools, hospitals, and small businesses while removing carbon and methane from our atmosphere.” 

The proposal, which would take effect in 2026, is the latest move by the Biden administration to improve energy efficiency in appliances and household products, many of them reversals of Trump-era rollbacks.

In January, the administration closed a loophole that exempted quick dishwashers from energy standards. Last July, the department moved to undo a rollback of shower head flow restrictions, a common topic of complaint by former President Trump.