The Biden Administration, on the day after Christmas and without so much as a press release, issued a final rule from the Department of Energy that will eliminate certain natural-gas water heaters. The ones targeted are the ones used by more than 55% of current American households, and the rule is expected to drastically increase the cost of water heaters in the future, and have the greatest impact on low-income Americans and seniors.
The regulations target non-condensing, natural gas-fired water heaters, mandating higher efficiency standards that can only be met by condensing models.
These newer models use technology designed to waste less heat, but have a significantly higher price tag. By the time the rule goes into effect, some 40% of available tankless gas water heaters will no longer meet the DOE’s efficiency requirements.
The rules also require new tankless gas water heaters to use about 13% less energy than the least efficient models available today. While proponents argue that the regulations will help curb carbon dioxide emissions—a key contributor to global warming—industry experts warn that consumers will face increased costs.
Some economists say that new water heaters complying with the rules will cost an average of $450 more than current models.
“A full 40% of customers directly impacted by the rule would see a net cost increase from this rule, rather than even minimal savings. DOE’s estimate of increased cost to customers is not reflective of real-world situations, with direct pricing information from a manufacturer suggesting that the difference in average product price alone is approximately $450 – 200% greater than the $231 difference claimed by DOE to justify the rule. Moreover, the customers most likely to opt for more affordable non-condensing water heaters tend to be low-income and senior households,” the American Gas Association said.
“DOE‘s decision to ban an entire segment of instantaneous water heaters is deeply concerning and irresponsible. The final rule is a violation of the Energy Policy and Conservation Act (EPCA) … To make matters worse, DOE‘s own analysis claims that the average life-cycle cost savings would amount to barely $112 over the entire 20-year average product life. DOE‘s final rule is unjustifiable on legal and practical grounds,” said Matthew Agen, American Gas Association chief counsel for energy.
It’s unclear how quickly the incoming Trump Administration will be able to undo the 11th-hour rule, but during the Trump Administration, there was a concerted effort to prevent this type of regulation from passing in the future.
