This is an exciting time in the water heater industry. While the average homeowner might be surprised to see “exciting” and “water heater” in the same sentence, those in the industry are experiencing significant technological advances in a relatively short time span.

Although the water heater’s basic operation had remained largely unchanged for many decades, recent years have seen many innovations that are changing the footprint and the functionality of these appliances. 

These trends are largely driven by consumer demand and government regulations, and it is important for contractors and manufacturers to stay on top of changes in the technology. Here are three trends shaping water heater advancements in 2020.



Across the industry, water heaters are becoming more efficient. The trend toward energy efficiency is driven by both consumer demand and government requirements. The 2015 National Appliance Energy Conservation Act (NAECA) set new minimum standards for water heaters in the United States. Coupled with homeowners increasingly choosing more efficient water heaters in record numbers, this legislation truly changed the direction of the industry.

Contrary to what seems like popular opinion today, energy efficiency is not limited to tankless water heaters. While it’s true that tankless water heaters are very efficient, modern tank water heaters are more efficient than ever before, with many models meeting Energy Star standards. There are applications for which each technology is best suited.

Following the energy efficiency trend, heat pump technology is a long-proven technology that is now gaining traction in the water heater industry. These products are extremely efficient, and consumers are even seeing rebates at the local level for choosing heat pump water heaters. Many energy advocates and utilities are also supportive of heat pump water heater technology due to its high efficiency and use of a renewable energy resource. It will be interesting to see how this technology develops in coming years.



Another trend driving the functionality of water heaters is connectivity. The Internet of Things has led to the smart home connecting all aspects of the home from entertainment to lighting to the home’s HVAC systems. 

The water heater is not exempt from the Internet of Things, as homeowners are searching for finer control over their homes. They can save energy and money by setting their water heaters on vacation mode while they are away or setting schedules for times of day with higher demand for hot water. If they live in areas with variable electricity rates, they can control the water heater to offset those costs.

However, the benefits of connected water heaters are not limited to the end user. This connectivity can allow service contractors to monitor the water heater and inform homeowners when it isn’t operating optimally. The contractor can also use connected water heater diagnostics to know what is wrong with the water heater before they arrive at the customer’s home, making service calls faster and more efficient.

From the manufacturer’s perspective, a connected water heater allows them to understand more about the products they design and how they operate in homes under real conditions. This information is invaluable for new product research and development. 

The possibilities here are new and evolving, and the future is not yet fully understood, but connectivity sets the groundwork for significant future innovation.



As mentioned previously, NACEA regulations set new minimum standards for water heater efficiency across the U.S., but we are also seeing increased government activity at the state and local levels to support their renewable energy and decarbonization goals. 

For instance, Washington state recently passed legislation that will require heat pump and electric resistance water heaters installed in the state to be grid-enabled over the next two years. This means that the homeowner’s utility provider can control the water heater remotely. This lets the utility manage the load on their grid and possibly reduce demand dur-ing peak times. This is truly the intersection between connectivity and energy efficiency, and it remains to be seen how widespread demand for grid-enabled water heaters will become.



In coming years, expect to see these trends impact the water heater industry even further. Water heaters are already part of the smart home ecosystem, but expect deeper integration with other appliances, more connected ability and bet-ter efficiency. As homeowners, contractors and governments continue to realize and define their goals for water heaters, the industry will continue to adapt and provide the functionality they require.