ACEEE Evaluates High Efficiency Water Heating, Utility Incentive Programs

Image courtesy Stephanie Hicks, Hub Pages

In a new study released Jan. 18th, the American Council for an Energy-Efficient Economy (ACEEE) exposed the identities and energy-efficiency values of a number of cutting-edge water heating technologies in order to further leverage the most recent water heating innovations and assist consumers in choosing best value.

The study, called "Market Transformation Efforts for Water Heating Efficiency," builds on last year’s study, which found that there were a number of under-utilized types of water heating which could deliver up to a 50 percent energy savings over federal minimum standards for water heating.

Most homes and businesses today still rely on tank-style gas or electric hot water heating. Even tankless water heating, first brought to the U.S. about a decade ago, hasn’t seen significant consumer uptake, though it is more and more the focus of utility programs which aim to get consumers to lower their energy use.

Moreover, the newest study concludes, these utility-sponsored programs are themselves failing to get the heavy lifting done by promoting the minimal efficiency upgrades offered by more familiar systems like tankless water heating and overlooking the more significant, but less familiar, sources of energy savings like heat-pump water heaters (the leader, at about 55 percent energy savings), condensing gas storage water heaters (39 percent), condensing tankless water heaters (36 percent), and hybrid condensing models at 30 percent energy savings.

Finally, none of the utility-based incentives to save water-heating energy include improvements in hot water distribution systems, which is where much of the energy (in the form of heat) is lost. And, as the report highlights, gas storage water heaters – even though the most efficient of the older technologies at up to 12 percent increased efficiency – have clearly become the dinosaurs of the water heating era as technology evolves.

To address the distribution issue, the study also evaluated improved hot water distribution methods like demand-controlled recirculation and drain water heat recovery, which was the more efficient of the two at 30 percent energy savings.

Failure to include these initiatives in utility-sponsored hot water heating efficiency programs – which the study reviewed using the DSIRE database– has the effect of delaying consumer acceptance and uptake of such non-mainstream technologies as heat pump, condensing and solar-assisted water heating. It also wastes an important avenue of financial savings for homeowners, since water heaters typically operate (and deliver their energy and dollar savings) for about 13 years.

One interesting note is a Southern California Gas Company program which has targeted manufacturers, in addition to consumers, to promote awareness and greater uptake of solar water heating – an incentive which insures that water heaters are installed by factory-trained professionals and therefore continue to meet advertised energy savings in both the near- and long-term.

The program is reportedly one that Georgia Power (NYSE: GAR) – working with one manufacturer and its supply chain – has had good success at, and may represent the wave of the future, in that it allows utilities to more closely monitor the effects of their spending. Florida Power & Light Company, or FPL (NYSE: NEE-PC)

The study's authors assure, however, that the report isn’t a blanket recommendation for abandoning consumer financial incentives, but rather expanding them vertically to cover both maker and buyer.

On May 11 of last year, the Lawrence Berkeley National Laboratory, or LBNL, published a residential water heating overview of the U.S. which shows gas tankless water heaters occupying only 1.8 percent of market share. Gas storage water heaters, on the other hand, represented the lion’s share of equipment replacements, beating out electric at 55.5 percent compared to 39.7 percent (a figure which no doubt reflects the current availability and affordability of natural gas).