Department of Energy (DOE) Moves on Residential Gas Instantaneous Water Heater Efficiency Rule

On December 26, 2024, DOE published a Final Rule in the Federal Register setting more stringent minimum efficiency standards for gas-fired instantaneous water heaters, which will apply to any such product manufactured on or after December 26, 2029. In this action the Department maintains their initial proposal from July 2023 that will require all these products to utilize condensing technology. More specifically, residential gas-fired instantaneous water heaters in the medium draw pattern will be required to meet or exceed a Uniform Energy Factor (UEF) of 0.91, while products in the high draw pattern will be required to meet or exceed a minimum UEF of 0.93.

Getting to this point has been a bit of a winding road as far as DOE rulemakings are concerned. While the Department finalized more stringent minimum efficiency standards for residential tank-type water heaters on May 6, 2024, they also made the surprising decision to separate gas-fired instantaneous water heaters out of that particular decision, pledging to address these products in a further rulemaking. DOE made good on this pledge in July 2024 by issuing a Notice of Data Availability (NODA) that pertained specifically to gas-fired instantaneous water heaters. 

The Department made no formal proposals in the NODA, but the information presented in the document suggested that DOE was considering setting the minimum efficiencies for these products at a much higher level than what they had initially proposed a year earlier. BWC, along with several other stakeholders in both our industry and the environmental community, pushed back on the NODA’s findings claiming that the Department’s initial analysis in 2023 for these products was more accurate. The Final Rule issued late last month seems to indicate that DOE was persuaded by these comments, finding that their initial proposal for these products was technologically feasible and economically justified.

While some will undoubtedly suggest that this rule should be overturned, this is not a simple process. As discussed in previous columns, federal law prohibits DOE from adopting minimum efficiency standards that are more lenient that what is already on the books for a particular product. As such, the Department’s determination in this Final Rule cannot simply be undone by the incoming Trump Administration, and only a determination by courts, or Congressional action can nullify it.

BWC’s Government and Regulatory Affairs staff is committed to continual monitoring of this, and any future decisions by the Department. If you have any questions about these actions, or any other matters pertaining to government and regulatory affairs in our industry, please do not hesitate to reach out to our team directly at BWCGovReg@bradfordwhite.com.