New insulation material could be trouble, says industry;

DOE says new standards would save billions in energy costs

The Department of Energy has released its proposal on energy conservation standards for water heaters. The proposed rule was published in the April 28 Federal Register, taking a number of water heater manufacturers and associations by surprise with its call for stricter standards of energy efficiency. The proposed rule from DOE would amend the current standards to require:

• Electric water heaters with heat traps, 2.5 inches of insulation and an insulated tank bottom;

• Gas-fired water heaters with heat traps, flue baffles that achieve a 78 percent recovery efficiency and 2 inches of insulation; and

• No change from the current standard for oil-fired water heaters.

Included in the rule, and perhaps most unsettling to manufacturers, is a requirement that all water heaters meet a proposed standard - trial standard level three - that is based on using HFC-245fa as a blowing agent in the insulation, which is projected to save an estimated 4.75 quads of energy over 27 years, according to DOE. The report projects that adopting standard level three will result in $3.4 billion in energy savings from 2003 through 2030, and a cumulative greenhouse gas emission reduction of 83 million metric tons of carbon. Additionally, the report states air pollution would be reduced during the same time period by the elimination of 229,000 metric tons of nitrous oxides.

While there are currently water heater models available with standard level three efficiency, the majority of manufacturers would sustain heavy losses on their product lines that do not meet this standard level.

"We can make products right now that meet level three efficiency, but adopting the standard will grossly lower the product offerings across the market and severely restrict water heater availability," Drew Smith, Vice President of Product Development and Research for State Industries, stated in response to the proposal. "This would eliminate a lot of manufacturers' current models," he added.

"The proposed standards are a lot more stringent than anybody in the industry expected," Joe Mattingly, Director of Government Affairs and General Counsel for the Gas Appliance Manufacturers Association (GAMA) said. "If adopted, the standards would result in extremely substantial changes in the manufacture of water heaters.

"We represent both gas-fired and electric water heater manufacturers, and it seems like they were hit pretty hard," Mattingly added. "We were really surprised by the proposed standards. They are a lot harder than any of us expected."

DOE's proposal is the product of three years of research, testing and consulting with energy efficiency groups, manufacturers, trade associations, state agencies, utilities and other interested parties. The test procedure DOE followed was designed to measure overall water heater efficiency, as well as the overall heat transfer coefficient (in Btus) and the recovery efficiency for electric, gas- and oil-fired water heaters, including instantaneous models.

DOE's proposed standard will build on the existing water heater efficiency standards that have been in effect since 1991. According to the proposal, it restricts electric water heater efficiency to an energy factor of 0.93 (0.0132 X rated volume); gas-fired water heater efficiency to 0.62 (0.0019 X rated volume); and oil-fired water heater efficiency to 0.59 (0.0019 X rated volume), in which the rated volume is the water storage capacity of a water heater in gallons, as specified by the manufacturer.

Mattingly said GAMA would be consulting with various manufacturers to present its response to the proposed standards at a public workshop scheduled for late June in Washington, D.C.