Effective April 16, 2015, there will be significant changes to water heater energy factor requirements as the result of updates to the National Appliance Energy Conservation Act (“NAECA”). The new requirements call for higher energy factor ratings on virtually all residential gas, electric, and oil water heaters. NAECA also affects some light-duty commercial water heaters.

According to the Obama administration, the new mandatory standards will save approximately 3.3 quads of energy and result in substantial savings … over the next 20-40 years.

Increased efficiency and long-term savings are great. Industry leaders, however, estimate that the installation price of the new tanks will likely double. That, combined with modest yearly savings from operation of the new units, means your Obama-mandated water heater may need to outlive you by a substantial period, to break even on upfront costs.

Plumbing contractors with water heaters that comply with existing standards are working around the clock to install them for residential and small commercial customers with existing units that are more than 10-years old.

Building contractors should be aware that NAECA-compliant water heaters are larger and heavier than traditional units. The space traditionally allotted to these products may have to change. Some of the new products will also require changes in venting, power, and condensate removal, which will also have to be factored into the design of water heater space. And finally, some added features or new technologies, such as heat pumps, will introduce noise levels that did not have to be considered in the past when selecting product placement.

In sum, those who wish to replace existing units with currently compliant new units must act swiftly. For those looking to future installations, significant planning could be required.