For the past few years, the water heater has been part of a simmering battle that pitted energy efficiency against demand response. On Tuesday, that fight was settled when the U.S. House of Representatives passed the Energy Efficiency Improvement Act of 2015 with bipartisan support. It passed the Senate a few weeks ago and now awaits the president’s signature.
The conflict was related to qualifying technologies. Under new U.S. Department of Energy efficiency standards, large electric water heaters over 55 gallons will be required to have an energy factor of at least 2.057, about double the efficiency of a high-efficiency electric storage water heater. The new standard could only be met with heat-pump water heaters, instead of the classic electric resistance water heaters.
The increase in efficiency is good news for the second-largest energy hog in the house; the DOE estimated the new standards would save about 3.3 quads of energy and $63 billion for consumers through 2044. But the new rules would hurt demand response programs that use the old-school hot water heaters as grid assets when power is at its highest demand.
“Electric co-ops across the country appreciate the incredible perseverance of Senators Portman, Shaheen, and many others for their leadership in passing S. 535,” said Jo Ann Emerson, CEO of the National Rural Electric Cooperative Association, in a statement. "The bill helps save consumers money, promotes reliability of the grid and helps integrate renewable energy -- truly a win-win-win piece of legislation.”
The group estimates that co-op utilities save about 500 megawatts through demand response using electric resistance water heaters. Thirty-five states have utilities (of all sizes) with water heater load control programs.
The bill allows for grid-enabled water heaters of 75 gallons or more that have an energy factor of at least 1.061 to still be sold. Utilities will have to report annually on how many water heaters are used in their territory for demand response.
If the DOE finds that grid-enabled water heater sales are 15 percent greater than the amount used by utility demand response programs in that area, they will have to establish further procedures to prevent the products from being diverted for other uses. The fix is more generous than some of the other solutions that had been proposed, such as one- or five-year waivers for these types of water heaters.
It’s not just utilities that are using water heaters for capacity demand response which are celebrating. Hot water heaters are also increasingly being tested as grid-balancing assets. In Hawaii, water heaters are being tested for frequency regulation and contingency reserves, while in the Pacific Northwest they are being tested to balance wind resources in five-minute intervals.
Grid-enabled smart water heaters were not the only beneficiaries of the legislation making its way through both chambers of Congress; benchmarking received a boost too. Federal agencies will now have to perform energy benchmarking audits on any commercial building without an Energy Star label that they lease.
“At long last, Congress is finally going to deliver bipartisan energy efficiency legislation to the President’s desk,” Senator Jeanne Shaheen (D-N.H.) said in a statement. “Persistence has paid off, and this legislation is a small but significant victory over legislative gridlock.”
The basement-dwelling electric resistance hot water heater has had its day on Capitol Hill -- and it has been victorious.