New Standards for Water Heaters: What They Mean for You

Rheem is a company that needs no introduction: it has been one of the world's leading manufacturers of heating, cooling, water heating, pool and spa heating, and commercial refrigeration products for nearly 100 years. Matthew Thornblad is the company’s Senior Public Policy and Communications Director. Tom McConahay is Senior Manager, National Plumber Support at Rheem.

CONTRACTOR: The new standards cover a wide area. Do you think the efficiency improvements proposed can be achieved at a price that consumers find acceptable?

THORN LEAF: At Rheem, we are still reviewing the rule, but with the recent release, we now have certainty about expected compliance with the rule.

We believe that the revised efficiency standards mandated by the Department of Energy are technically feasible and economically justified in many ways. We believe that the three to five year start-up period the Department of Energy has granted the industry will allow manufacturers to expand and develop water heating products that are cost-effective and meet the new efficiency standards.

As you know, the agency has mandated an efficiency standard for electric tank water heaters, which are largely achieved through heat pump technology. It has chosen to make small changes to the efficiency standards for gas tank products, which are achieved through noncondensing gas technology. And the agency has chosen to remove the standard for residential gas tankless water heaters and delay it until a later date rather than set a standard.

CONTRACTOR: Are there any other proposed legislation currently underway at the city, state or federal level that you and Rheem are keeping an eye on?

THORN LEAF: We would particularly like to draw your attention to what we are seeing in California. Several local air quality management districts are proposing low or zero NOx emission standards for commercial water heaters, boilers and residential water heaters. Specifically, they are the South Coast Air Quality Management District and the Greater Los Angeles area. This would include commercial water heaters, boilers and gas-fired pool heaters, with compliance beginning as early as January 2026.

At Reem, we believe that the decarbonization of the building sector will be accelerated by electrifying space and hot water products. However, this implementation will be more of a patchwork. In some parts of the country, this will depend on the climate or prevailing electricity prices. In the Southeast, particularly in the Carolinas, the penetration of electric heat pumps is already very high.

In other parts of the country, such as North Dakota, where gas prices have historically been low, market penetration of electric water heating and space heating may be lower.

We remain committed to our channel partners, of course, to helping them succeed and grow. We do a lot of work in the area of ​​training for design engineers, architectural and engineering firms, and of course commercial general contractors. We are developing curricula – which can be delivered in person, virtually, or via webinars – that will get our training to more installers, plumbers, and contractors faster. With product lifecycles potentially shortening due to regulatory changes, we need to make sure we can provide installers and contractors with the skills they need to develop and sell these products. This is a key part of what we will be focusing on over the next few years.

CONTRACTOR: Does this also mean that training will play an important role in the coming years for anyone working in the water heater installation and maintenance industry?

McCONAHAY: To serve their customers, plumbers need to better understand the products they sell, install and service.

Many of today's products are now connected, allowing the customer to control and monitor their water heater (from common smart devices) with the tap of a finger. This technology also benefits plumbers and contractors when it comes to troubleshooting and maintaining these smart products.

Additionally, there are several rebates available to both the installer and the consumer that make adopting these products easier. Whether it's a local, municipal, or federal rebate like the IRA (Inflation Reduction Act), there are usually several depending on where you are located. It's in the best interest of both the installer and their customer to stay up to date on what rebates are available.

The good news is that there is a wealth of information available and Rheem is committed to educating the plumbers and contractors of today and tomorrow on how to use these products.

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