New water heater regulations and what that means for property owners

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The Department of Energy has recently updated the regulations for water heaters.  The required changes can wreak havoc on budgets for owners of multiple rental properties.  If your properties have water heaters that need to be replaced in the next few years, now is the time to do so.

Manufacturers are under orders to make changes to the basic design that will increase energy efficiency.  New water heaters will reflect the higher cost of these design changes costing 25% to 30% more.   The energy efficiency will cut down on long-term fuel costs.  But those savings will be pocketed by your tenants if they pay the fuel bills.

The initial cost of a new water heater is not the only consideration.  Installation drives the cost up much further.  With the size increase of about 2 inches in height and width, many homes will necessitate a relocation of the heater as the current water heater closet will not accommodate the new designs. If your current water heaters are in a small closet or tight attic space, you may have to create a new space for the larger designs.  This may necessitate not only a change in space, but also the cost of plumbing that new space. 
Water heaters that have already been shipped to your local box stores will continue to be sold for the time being.  But once they run out, the new designs will be all that is left.  For any home with a dated water heater that will have to be replaced soon, replace it now.

See the new Department of Energy standards below.

  • 430.32 Energy and water conservation
    standards and their effective
    dates.
    (d) Water heaters. The energy factor
    of water heaters shall not be less than
    the following for products manufactured
    on or after the indicated dates.

Product class Energy factor as of January
20, 2004 Energy factor as of April 16, 2015
Gas-fired Water Heater ………… 0.67\(0.0019 × Rated Storage
Volume in gallons).
For tanks with a Rated Storage Volume at or below 55 gallons:
EF = 0.675\(0.0015 × Rated Storage Volume in gallons).
For tanks with a Rated Storage Volume above 55 gallons:
EF = 0.8012\(0.00078 × Rated Storage Volume in gallons).
Oil-fired Water Heater ………….. 0.59\(0.0019 × Rated Storage
Volume in gallons).
EF = 0.68\(0.0019 × Rated Storage Volume in gallons).
Electric Water Heater …………… 0.97\(0.00132 × Rated Storage
Volume in gallons).
For tanks with a Rated Storage Volume at or below 55 gallons:
EF = 0.960\(0.0003 × Rated Storage Volume in gallons).
For tanks with a Rated Storage Volume above 55 gallons:
EF = 2.057\(0.00113 × Rated Storage Volume in gallons).
Tabletop Water Heater …………. 0.93\(0.00132 × Rated Storage
Volume in gallons).
EF = 0.93\(0.00132 × Rated Storage Volume in gallons).
Instantaneous Gas-fired Water
Heater.
0.62\(0.0019 × Rated Storage
Volume in gallons).
EF = 0.82\(0.0019 × Rated Storage Volume in gallons).
Instantaneous Electric Water
Heater.
0.93\(0.00132 × Rated Storage
Volume in gallons).
EF = 0.93\(0.00132 × Rated Storage Volume in gallons).
Note: The Rated Storage Volume equals the water storage capacity of a water heater, in gallons, as specified by the
manufacturer.