DOE regulations threaten a popular product
Eighteen months ago, Rinnai American Corp. opened a $72 million manufacturing facility in Griffin, Georgia. Today, energy-efficient non-condensing tankless water heaters are rolling off the assembly line.
Now the product line and the factory are facing an unexpected threat in the shape of what Rinnai calls an “unreasonable” Department of Energy proposal that would effectively ban non-condensing tankless water heaters, despite the environmental benefits that the category brings to the table. Rinnai says the rule would effectively remove existing affordable and efficient products from the market, as well as put American jobs at risk.
“It’s a head scratcher,” Rinnai’s President Frank Windsor told HBSDealer. “Any decision that would eliminate a product category that lasts longer, is more efficient, is half the size of regular tank, and only makes hot water for you when you want it makes no sense to us at all.”
The DOE’s draft rule would raise standards for tankless gas-fired water heaters to over 91 percent efficiency, while leaving the standards for tank gas-fired water heaters relatively untouched at 70 percent efficiency. While tankless water heaters are the more environmentally friendly option, achieving 91 percent efficiency with non-condensing technology is technologically impossible.
The draft ruling was introduced about six weeks ago. The DOE promoted the congressionally mandated appliance standards as a way to “accelerate deployment of heat pump water heaters, saving Americans nearly $200 billion while avoiding more than 500 million tons of greenhouse gas emissions over 30 years.”
Windsor said he understands the effort to improve efficiency of electric water heaters. But the stance on efficient and environmentally friendly tankless water heaters defeats the purpose of the proposal.
The comment period will close Sept. 26. And it is expected that the DOE will look at the feedback and issue a final ruling in the next three to four months.
Rinnai’s Windsor told HBSDealer he was hopeful that the draft rule could be amended.
Rinnai set up a web site to make it easy for people to submit comments to their representatives in congress. [Visit the page here.]
Since the launch of a landing page, 11,700 people have come to the web site to fill out a letter to their representative—an encouraging number, Windsor said. “We thought we might get a thousand,” he added.
Moreover, Rinnai said he has received a sympathetic ear from regulators and elected officials in Georgia.
In 2014 gas tankless accounted for 6 percent of the gas water heater market, according to Rinnai’s tally. That figure has grown to 20 percent, as consumers, many of whom were introduced to the benefits of the technology through home improvement television shows such as “This Old House,” welcomed the technology into their homes.
In the end, if the proposal remains unchanged, it’s the consumer who gets hurt by fewer choices and higher costs. The DOE’s proposal, created with the intention of increasing efficiency, would actually lead to increased use of gas-fired tank water heaters that are less energy efficient, Windsor said.
It’s unclear what would happen to the Rinnai manufacturing facility in Griffin, in the event that the product made there would fall victim to regulation. The facility opened with the support of numerous state officials in May of 2022.
The DOE explained in an announcement that its proposal would require the most common-sized electric water heaters to achieve efficiency gains with heat pump technology and gas-fired instantaneous water heaters to achieve efficiency gains through condensing technology.
These standards, which would take effect in 2029 if finalized, are expected to save Americans approximately $198 billion and reduce 501 million metric tons of harmful carbon dioxide emissions cumulatively over 30 years—roughly equivalent to the combined annual emissions of 63 million homes, or approximately 50 percent of homes in the United States.
In a recent press release, Windsor summed up Rinnai’s position: “Consumers who rely on access to tankless water heaters will see their options limited, resulting in higher energy bills and shorter appliance lifespans, while the very environmental goals prompting this rule will go unfulfilled.”
