March 26, 2018
Virtually every home across the United States and Canada uses hot water every single day; as the second largest energy load for residential customers, water heating represents about 20 percent of energy consumption in the home. But while over nine million water heaters are sold in the United States every year, high efficiency water heaters make up less than five percent of those sales, despite offerings from all major manufacturers and almost ten years of support from ENERGY STAR® product recognition.
Now, program administrators have chosen to work together through CEE to take advantage of a significant opportunity for increased impacts and savings. The new CEESM Residential Water Heating Initiative provides a binational strategy that program administrators can implement to increase the sales, availability and installation of high efficiency electric and gas water heaters, transforming the market towards efficiency.
Water heating is a key opportunity for energy savings: moving half of gas storage water heaters to even mid-level efficiency could save up to 37 million therms annually, equivalent to the carbon emissions of over 20,000 homes. Replacing electric resistance water heaters with efficient heat pump models could save up to 0.70 quads and $7.8 billion in consumer payments per year.
Three Critical Strategic Elements
In the Initiative, CEE members review challenges currently blocking increased adoption and outline a three-pronged strategy for overcoming these barriers and transforming the residential water heating market. The first element is a set of tiered energy efficiency performance criteria for both gas (storage and tankless) and electric (heat pump) products; these specifications establish clear levels for manufacturers to achieve in order to receive program support and provide a consistent definition of efficiency for consumers and program administrators alike.
The second element is an emphasis on contractor and consumer education and training regarding the benefits of high efficiency products, as well as appropriate applications and installation considerations. Since residential water heaters are often replaced on an emergency basis, consumers tend to favor readily available models in order to quickly return hot water to the home and rely heavily on contractor product recommendations in the absence of time to do their own research. Contractor familiarity with efficient products and their benefits is essential for increasing uptake. Furthermore, consumers need information on the potential benefits of choosing efficient residential water heating equipment and should be empowered to request these technologies. Initiative participation requirements include awareness and education outreach targeted at both consumers and contractors, as well as training, support, and installation guidance for contractors.
Consumer education on the benefits of efficient products is an important part of Initiative strategy; switching from an electric storage water heater to a heat pump can save a family of four over $300 annually, with lifetime savings eclipsing $3,500.
The third element is distribution chain support for high efficiency products, with efforts aimed directly at midstream players like distributors and retailers. Initiative participation explicitly requires programs or incentives that encourage retailers, distributors, wholesalers, or other trade allies to promote, buy, stock, or sell efficient models. These programs will support midstream industry actors in promoting plumber and installer uptake of new efficient options and in making efficient products more available for emergency replacement purchases.
As an extension of its market transformation strategy to increase the sales of efficient products, the Initiative supports new connected criteria to increase interoperability and provide both grid and consumer benefits. The Initiative provides insights on the potential opportunities that can be enabled though optional CEE connected criteria and highlights how market-wide consistency in the identified connected capabilities can help members achieve energy efficiency, product performance, customer satisfaction, and grid benefits. It includes a strategy, based on interoperability and open standards, for incorporating connected electric water heaters to produce real-time energy management and grid side benefit.
The CEE Residential Water Heating Initiative also provides a summary of the current residential water heating market, an overview of the technology and energy savings potential of currently available efficient products, and a discussion of challenges to increased adoption. In the binational market strategy it outlines, the Initiative discusses ways to overcome these challenges, with key roles to be played by program administrators, manufacturers, distributors, retailers and installers.
The Initiative is a product of consensus across efficiency programs and market sectors.
It was developed through discussion among the many CEE members who implement residential water heater programs, including Duke Energy, Efficiency Maine, United Illuminating, SoCalGas, Northeast Energy Efficiency Alliance, and Southern Company. It also incorporates substantial input from industry stakeholders and federal actors, including the US Environmental Protection Agency, Natural Resources Canada, the Electric Power Research Institute (EPRI), Air-Conditioning, Heating, & Refrigeration Institute (AHRI), and individual manufacturers.
Through program administrator adoption of the Initiative, administrators, manufacturers, and industry partners can gain cost-effective savings while transforming the market. Taking advantage of the Initiative doesn’t just support your own program or operation—it is also the first step toward a market consensus that will increase savings far into the future. Contact CEE today to learn more.