Takeaways:
- The Biden administration’s new energy conservation rules will ban certain non-condensing natural gas water heaters by 2029.
- The policy aims to reduce carbon dioxide emissions and improve energy efficiency.
- Critics warn the ban may raise upfront costs for low-income and senior households.
The Biden administration has introduced a new policy that could significantly impact the water heater market. Announced in late 2024, the Department of Energy’s (DOE) new energy conservation standards will phase out certain non-condensing natural gas water heaters starting in 2029. While the move aims to reduce carbon emissions and encourage energy efficiency, it has sparked controversy over its economic implications.
Here’s everything you need to know about the upcoming changes.
Why Are These Changes Happening?
The new standards are designed to address climate change by cutting greenhouse gas emissions. According to the DOE, the revised energy conservation rules for gas-fired instantaneous water heaters will significantly reduce:
- 32 million metric tons of carbon dioxide
- 0.12 thousand tons of sulfur dioxide
- 86 thousand tons of nitrogen oxide
- 398 thousand tons of methane
“These long-awaited standards will ensure more families save with proven energy-efficient technology already used in a majority of tankless units,” said Andrew deLaski, executive director of the Appliance Standards Awareness Project.
The DOE’s analysis suggests these changes are not only environmentally justified but also economically feasible, with potential long-term savings for consumers.
What’s Being Banned?
The new rules target non-condensing natural gas water heaters, a common choice for smaller homes and apartments. By 2029, these models will no longer meet the stricter energy efficiency requirements, effectively banning their sale. The regulations apply to:
- Non-condensing gas water heaters: Less efficient, more affordable upfront
- Condensing gas water heaters: More efficient but typically more expensive
To comply, all tankless gas water heaters must use about 13% less energy than the least efficient models currently available.
Who Is Affected?
Low-income and senior households are among the groups most impacted by the new regulations. These demographics often rely on the affordability of non-condensing tankless water heaters. Critics argue the policy could force these consumers to choose between:
- Paying significantly more upfront for condensing models
- Switching to non-instantaneous storage tank water heaters, which are typically less efficient
For example, a non-condensing tankless natural gas water heater costs around $1,000 at Home Depot, while a comparable condensing model is priced at approximately $1,800.
Matthew Agen, chief counsel for energy at the American Gas Association, expressed concern: “Forcing low-income and senior customers to pay far more upfront is particularly concerning. DOE’s decision to go ahead with a flawed final rule is deeply disappointing.”
Will It Save Money in the Long Run?
The DOE estimates that consumers could save $112 in energy costs over the 20-year lifespan of a water heater under the new standards. However, critics argue these savings are negligible compared to the increased upfront costs.
Ben Lieberman, a senior fellow at the Competitive Enterprise Institute, criticized the move: “It’s one more example of an appliance regulation that raises costs and reduces choices. It bans an entire category of tankless water heaters and the ones that are most affordable.”
Industry and Environmental Perspectives
Not everyone opposes the change. Advocates of energy efficiency argue that the environmental benefits outweigh the drawbacks. The Appliance Standards Awareness Project states that these regulations will lower total household costs while significantly reducing planet-warming emissions.
“This is a commonsense step that will lower total household costs while reducing planet-warming emissions,” deLaski added.
However, industry leaders like Frank Windsor, president of Rinnai America, believe the focus should shift to improving efficiency standards for tank models instead of banning non-condensing units.
What’s Next?
The new rules are slated to take effect on March 11, 2029, barring any changes. While the policy promises environmental benefits, the debate continues over its economic and social implications. Whether these changes strike the right balance between sustainability and affordability remains to be seen.
For those considering a new water heater, it’s essential to weigh the long-term savings against the initial costs and stay informed about the evolving regulations.