New NAECA Water Heater Requirements

New NAECA energy efficiency requirements will result in an increase in water heater efficiency as well as an increase in price.

On April 16, 2015, the Department of Energy (DOE) will make effective its new energy efficiency mandates, as part of the National Appliance and Energy Conservation Act (NAECA). Part of this efficiency standards update will require higher Energy Factor (EF) ratings on virtually all residential gas, electric, oil and tankless gas water heaters

Energy Factor is the ratio of useful energy output from the water heater to the total amount of energy delivered to the water heater. The higher the EF is, the more efficient the water heater. The new regulations translate to a mandatory increase of 3% – 30% greater efficiency vs. current models which is projected to save 3.3 quads of energy between 2015 and 2044.

In order to comply with these new federally-imposed standards, water heater manufacturers will be forced to alter their equipment designs to improve the insulation. This will mean one of two things – either the diameter of the heaters will increase significantly, or the capacity will decrease – potentially up to 10%.

How will it effect you?

Increased price. Manufactures will need to make radical changes on how water heaters are designed, manufactured, tested, and distributed which means this will increase their time and production cost. All of these changes ultimately will be reflected in a higher price for the end user. How much more will depend on the type and size of water heater. Although they are not providing specific numbers at this point, manufacturers and distributors are predicting a “substantial price increase”.
Increased installation and maintenance costs. As water heaters become more complex, they also be more difficult to install. While the operating cost of the new water heaters will be less because of their increased energy efficiency, it is likely that the maintenance costs will increase because of a more complex design, and the integration of electronics, blowers, fans, condensers, etc.
New water heaters may not fit in your current space. Both gas and electric water heaters will require more insulation which will increase the diameter and/or height of the water heater. Therefore the water heater will have to be re-located to operate properly or a smaller water heater will need to be purchased. If the later is the case, the performance of the new water heater in terms of hot water deliverability will be less than the model which was replaced.

How will gas water heaters be affected?

Gas models may require additional insulation, incorporate newer flue baffling technologies (including flue dampers), incorporate electronic ignition in lieu of the standing pilot, or a combination of these. One likely impact will be an increase in the overall product size, especially in diameter. For gas-fired products, over 55 gallons <75,000 BTU/Hr.), fully condensing combustion technology will likely be required, based on currently available technologies that are capable of meeting the new requirements. This will also mean that line voltage will have to be available, as well as a means for condensate disposal.

How will electric water heaters be affected?

Electric water heaters will likely require more insulation. This will increase the diameter and/or height of the water heater. Additional insulation may be required for piping and fittings such as drain and T&P valves. Electric water heaters over 55 gallons (< 12 kW input) will likely utilize integrated heat pumps to meet the new EF requirements, based on currently available technology.

Will oil-fired water heaters be affected?

Similar challenges are faced with the oil-fired products. Much like gas products, oil-fired water heaters will likely require additional insulation and/or completely new combustion systems.


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