Have many houses 240-Voltage sockets for electric clothes dryers or central air conditioning. Some parts of the country use many older electric heating systems that also require these outlets, making these homes easier targets for heat pump water heater replacement. But most houses lack it 240-Volt wiring in the closets, basements and other places where water heaters go.
Khanolkar estimated that the cost of upgrading these homes could range from $1,000 to run a new circuit to several thousand dollars more, if the house electrical panel also needs to be upgraded. “Even in the most cost-effective areas” – like the Midwest – “Trivial wiring upgrades would be $500minimum,” she said.
Meanwhile, advances in heat pump technology have made it possible to run on less electricity and still provide enough hot water on demand to keep customers happy, she said. “If you size it right then 120-Volt is a perfect solution for homes with fewer residents and lower needs.”
The new ProTerra models cost between $1,900 and $3,150depending on the capacity of the water tank and the compressor power needed to heat the water.
Rheem has taken some careful engineering measures to ensure this is the case 120-Volt model would work as promised, Pincott said. The company also conducted training and outreach to contractors and plumbers, who are ultimately responsible for selling and installing a product that meets homeowners’ expectations, she said. On that front, feedback has been positive, even from contractors who don’t work in mandated locations like the one in California, she said.
“One of them saw that 120-Volt plug-in and he said: ‘Wow, I don’t have to do any electrical work, I don’t have to do a gas line. This would be great for a home addition. Just drop, plug, plug and go.”
Coordination of public policies and the private sector
However, none of this guarantees that a multi-year investment in the development, manufacture and marketing of a brand new product line will pay off for manufacturers.
“This technology, like any new technology, had this chicken and egg problem,” said Khanolkar. “Without a real product, utilities would not offer incentives to cover the additional upfront cost of heat pump water heaters compared to gas-fired versions. And without the demand generated by incentives, manufacturers would not fully invest in the product.
That’s why the Building Decarbonization Coalition chose it “engage early”. 2018 with Rheem and other water heater manufacturers to prepare for California’s electrification policy push, Bartholomy said. “They saw that the right people were at the table who would ensure the policy changes were made and the program deployed in a way that ensured the demand was there for them.”
California’s ongoing policies helped keep pace “the confidence … to stick with the project,” he added. These policies included heat pump incentive programs aimed at both contractors and homeowners, and a statewide building code that sets heat pump water heaters as the efficiency standard.
Now with the first 120-Volt water heaters are installed in test homes, the Advanced Water Heating Initiative is working with utilities and state agencies on a field study to determine how well the systems are performing and how much money they can save over time, Khanolkar said. Demonstrating the cost-saving and load-shifting capabilities of these new water heaters will be important in persuading policymakers, regulators, utilities, retailers and contractors in other states to support them.
Cost savings depend heavily on utility companies’ electricity and gas tariffs, as well as whether customers can be paid for making their electric water heaters available to reduce the load on the grid, she noted. “Don’t forget that water heaters act like thermal batteries,” she said, using cheap electricity to heat water and then turning off and using the stored hot water when power is scarce and prices are higher.
Utility companies in California and across the country take advantage of this water heater storage capacity through tariffs and incentives. The latest water heaters, like Rheem’s ProTerra, are equipped with digital communication ports to support finer-grained control, Pincott noted. That could make them valuable tools for reducing grid loads as buildings and vehicles switch from fossil fuels to electricity, which needs to happen to reduce carbon emissions fast enough to forestall the most catastrophic damage from climate change, Khanolkar said.
In the meantime, the type of public-private cooperation has emerged 120-Volt water heaters on the market will expand to broader home electrification projects, according to Bartholomy. He quoted a recent letter signed by a large water heater HVAC manufacturers, as well as a list of climate change and environmental justice groups that are asking California regulators to work with them “Complementary Financial, Human Resources and Housing Policies” to support new device standards expected to come into force in the second half of the decade.
“Manufacturers typically work in five-year cycles,” he said. “How can you build trust and respond to the market and policy changes necessary to give them the confidence to move forward?”