CHAPTER 3 MARKET AND TECHNOLOGY ASSESSMENT

TABLE OF CONTENTS 

3.1 INTRODUCTION ........................................................................................... 3-1

3.1.1 Description of Products............................................................................ 3-1

3.1.2 Definitions................................................................................................ 3-2

3.1.3 Product Classes ........................................................................................ 3-5

3.1.4 Product Test Procedures .......................................................................... 3-7

3.2 MARKET ASSESSMENT .............................................................................. 3-8

3.2.1 Trade Associations................................................................................... 3-8

3.2.2 Manufacturer Information...................................................................... 3-10

3.2.3 Distribution Channels ............................................................................ 3-14

3.2.4 Regulatory Programs ............................................................................. 3-16

3.2.5 Voluntary Programs............................................................................... 3-20

3.2.6 Historical Shipments.............................................................................. 3-24

3.2.7 Industry Cost Structure .......................................................................... 3-28

3.2.8 Equipment Lifetime ............................................................................... 3-29

3.2.9 Market Performance Data...................................................................... 3-30

3.3 TECHNOLOGY ASSESSMENT.................................................................. 3-45

3.3.1 Baseline Equipment Components and Operation .................................. 3-45

3.3.2 Technology Options............................................................................... 3-47

3.3.3 Technologies that Do Not Affect Energy Efficiency as Measured........ 3-71

LIST OF TABLES 

Table 3.1.1 Product Classes for Residential Water Heaters ............................................ 3-5

Table 3.1.2 Product Classes for Direct Heating Equipment ............................................ 3-6

Table 3.1.3 Direct Heating Equipment Product Class Description Revision .................. 3-7

Table 3.2.1 Manufacturers Whose Products Are Included in the AHRI Directory......... 3-9

Table 3.2.2 Major and Other Residential Water Heater Manufacturers ........................ 3-10

Table 3.2.3 Residential Water Heater Manufacturers by Technology Type ................. 3-12

Table 3.2.4 Gas-Fired Direct Heating Equipment Manufacturers................................. 3-12

Table 3.2.5 Gas-Fired Pool Heater Manufacturers ........................................................ 3-13

Table 3.2.6 Small Business Manufacturers of Residential Water Heaters, Direct Heating

Equipment, and Pool Heaters......................................................................................... 3-14

Table 3.2.7 Federal Energy Conservation Standards for Residential Water Heaters .... 3-17

Table 3.2.8 Federal Energy Conservation Standards for Direct Heating Equipment*.. 3-17

Table 3.2.9 California State Efficiency Standards for Residential Water Heaters ........ 3-18

Table 3.2.10 California State Energy Conservation Standards for Pool Heaters .......... 3-19

Table 3.2.11 Canadian Efficiency Standards for Residential Water Heaters ................ 3-19

Table 3.2.12 Mexican Efficiency Standards for Water Heaters .................................... 3-20

Table 3.2.13 ENERGY STAR Residential Water Heater Criteria Issued on April 1, 2008

........................................................................................................................................ 3-22

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Table 3.2.14 FEMP Gas-Fired Water Heater Performance Requirements.................... 3-23

Table 3.2.15 FEMP Electric Water Heater Performance Requirements ....................... 3-23

Table 3.2.16 Sample Rebate Programs.......................................................................... 3-23

Table 3.2.17 AHRI Residential Water Heater Industry Estimated Shipment Data (New

Construction and Replacement)*................................................................................... 3-26

Table 3.2.18 Residential Water Heater Value of Shipments by Year ........................... 3-27

Table 3.2.19 AHRI Residential Direct Heating Equipment Industry Estimated Shipment

Data (New Construction and Replacement)* ................................................................ 3-28

Table 3.2.20 Residential Gas-fired Pool Heater Shipments* ........................................ 3-28

Table 3.2.21 Industry Cost Structure Using SEC Data.................................................. 3-29

Table 3.2.22 Equipment Lifetimes................................................................................. 3-30

Table 3.2.23 Potential Revised Product Classes for Direct Heating Equipment........... 3-44

LIST OF FIGURES 

Figure 3.2.1 2006 Market Shares for the Domestic Residential Water Heaters ........... 3-11

Figure 3.2.2 Water Heaters Distribution Channel ......................................................... 3-15

Figure 3.2.3 Direct Heating Equipment Distribution Channel ...................................... 3-15

Figure 3.2.4 Pool Heater Distribution Channel ............................................................. 3-16

Figure 3.2.5 New Privately Owned Single-Family and Multifamily Housing Unit Starts in

the United States, 1990-2006......................................................................................... 3-25

Figure 3.2.6 Residential Water Heater Industry Shipments (Domestic and Imported). 3-26

Figure 3.2.7 Distribution of Gas-Fired Storage-Type Water Heater Models by Energy

Factor for All Storage Volumes..................................................................................... 3-31

Figure 3.2.8 Distribution of Gas-Fired Storage-Type Water Heater Models by Storage

Capacity ......................................................................................................................... 3-32

Figure 3.2.9 Distribution of Oil-Fired Storage-Type Water Heater Models by Energy

Factor for All Storage Volumes..................................................................................... 3-33

Figure 3.2.10 Distribution of Oil-Fired Storage-Type Water Heater Models by Storage

Capacity ......................................................................................................................... 3-34

Figure 3.2.11 Distribution of Electric Storage-Type Water Heater Models by Energy

Factor for All Storage Volumes..................................................................................... 3-35

Figure 3.2.12 Distribution of Electric Storage-Type Water Heater Models by Storage

Capacity ......................................................................................................................... 3-36

Figure 3.2.13 Distribution of Instantaneous Gas-fired Water Heater Models by Energy

Factor ............................................................................................................................. 3-37

Figure 3.2.14 Distribution of Instantaneous Gas-fired Water Heater Models by Input

Capacity ......................................................................................................................... 3-38

Figure 3.2.15 Distribution of Wall Furnace Fan-Type Models by Input Rating and AFUE

........................................................................................................................................ 3-39

Figure 3.2.16 Distribution of Wall Furnace Gravity-Type Models by Input Rating and

AFUE ............................................................................................................................. 3-40

Figure 3.2.17 Distribution of Floor Furnace Models by Input Rating and AFUE......... 3-41

Figure 3.2.18 Distribution of Room Heater Models by Input Rating and AFUE.......... 3-42

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Figure 3.2.19 Distribution of Pool Heater Models by Input Capacity and Thermal

Efficiency....................................................................................................................... 3-44

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3.1 INTRODUCTION 

This chapter details the market and technology assessment that the U.S. 

Department of Energy (DOE) has conducted in support of the ongoing energy 

conservation standards rulemaking for residential water heaters, direct heating 

equipment, and pool heaters. 

This chapter consists of two sections: the market assessment and the technology 

assessment. The goal of the market assessment is to develop a qualitative and quantitative 

characterization of the residential water heater, direct heating equipment, and pool heater 

industries and market structures, based on publicly available information and data and 

other information that DOE received directly from manufacturers and other interested 

parties. Publicly available information includes the Air-Conditioning, Heating, and 

Refrigeration Institute (AHRI) Consumers' Directory of Certified Efficiency Ratings for 

Heating and Water Heating Equipment (formerly the Gas Appliance Manufacturers 

Association (GAMA)a equipment certification directory, as well as U.S. Census Bureau 

Current Industrial Reports (CIR) and Annual Survey of Manufactures (ASM), the 

appliance database from the California Energy Commission (CEC) , and information 

from the Federal Trade Commission (FTC). The market and technology assessment 

addresses manufacturer characteristics and market shares, existing regulatory and nonregulatory efficiency improvement initiatives, product classes, and trends in product 

markets and characteristics. DOE performs the technology assessment to develop a 

preliminary list of technologies (referred to as technology options) that could be used to 

improve the efficiency of residential water heaters, direct heating equipment, and pool 

heaters. 

3.1.1 Description of Products 

Residential water heaters are used primarily to provide hot water to residences for 

consumer use, appliances, and other functions. Some residential water heaters may also 

provide heated water to radiant heating systems. A basic gas storage residential water 

heater is comprised of a standing pilot ignition system, a burner, a combustion chamber, a 

flue baffle, a flue, an insulated water tank, a cold water inlet and hot water outlet, a 

sacrificial anode, a gas valve, a temperature and pressure relief valve, a thermostat, heat 

traps, and an outer case. A basic electric storage residential water heater is comprised of 

an electric resistance heating element, a sacrificial anode, an insulated water tank, a cold 

water inlet and a hot water outlet, a temperature and pressure relief valve, a thermostat 

with wire harness, heat traps, and an outer case. A basic oil storage residential water 

heater is comprised of a combustion chamber, a flue baffle, a flue, an insulated water 

tank, a cold water inlet and hot water outlet, a sacrificial anode, a power burner system, a 

thermostat, a temperature and pressure relief valve, and an outer case. A basic gas 

instantaneous residential water heater is comprised of a combustion chamber, a burner, a 

a The Air-Conditioning and Refrigeration Institute (ARI) and GAMA merged on January 1, 2008 to 

become the Air-Conditioning, Heating, and Refrigeration Institute (AHRI). For more information, please 

visit www.ahrinet.org. 

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heat exchanger, a vent, a cold water inlet and hot water outlet, a gas valve, a standing 

pilot ignition system, a burner control thermostat, a flow detector, and an outer case. 

In the United States, 99.9 percent (106.9 million) of homes have water heaters (as 

of 2001). Energy consumption attributable to water heater operation represents 1.7 

percent (1.68 quads) of total U.S. energy consumption. Within individual homes, water 

heating represents, on average, 17 percent of total annual household energy 

1 consumption. 

Direct heating equipment is typically used to provide primary or supplemental 

space heating within a single room in a building. Some direct heating equipment, 

including hearth products, serve an aesthetic purpose in addition to a heating feature. A 

basic residential gas wall fan-type heater consists of an outer case, an air circulation fan, 

a burner, a combustion chamber/heat exchanger, a standing pilot ignition system, a pilot 

light sensing control valve, a flue, a draft diverter, an air intake, and a burner control 

thermostat. A basic residential gas wall gravity-type heater consists of an outer case, a 

burner, a combustion chamber/heat exchanger, a standing pilot ignition system, a pilot 

light sensing control valve, a flue, a draft diverter, an air intake, and a burner control 

thermostat. Gravity provides air circulation as warm air rises (i.e., warm air, which is less 

dense, rises and cool air, which is more dense, descends due to buoyancy effects). A 

basic residential gas floor heater consists of an outer case, a burner, a combustion 

chamber/heat exchanger, a standing pilot ignition system, a pilot light sensing control 

valve, a flue, a draft hood, an air intake, a burner control thermostat, and a floor grate. A 

basic residential gas room heater consists of an outer case, a burner, a combustion 

chamber/heat exchanger, a standing pilot ignition system, a pilot light sensing control 

valve, a flue, a draft hood, an air intake, a burner control thermostat, and an outer case. 

Both basic residential gas floor and basic gas room heaters rely on gravity for air 

circulation. Basic residential wall gravity, floor, and room heaters differ primarily by the 

enclosure design and how they are installed. 

Residential pool heaters are used to raise the water temperature of pools, allowing 

use of the pool when ambient temperatures are low. A basic residential gas pool heater is 

comprised of an outer case, a combustion chamber with refractory, a standing pilot 

ignition system, a pilot light sensing control valve, a burner, a heat exchanger, an air 

intake, a flue/vent, a cold water inlet and hot water outlet, pressure and water safety 

switches, and a burner control thermostat with user interface. 

3.1.2 Definitions 

The National Appliance Energy Conservation Act (NAECA) established the 

definition of a “residential water heater,” (42 United States Code (U.S.C.) 6291(27)), as 

follows: 

Residential water heater means a product that uses oil, gas, or electricity to heat 

potable water for use outside the heater upon demand, “including – 

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1. Storage-type units which heat and store water at a thermostatically controlled 

temperature, including as storage water heaters with an input of 75,000 British 

thermal units [Btu] per hour [h] or less, oil storage water heaters with an input 

of 105,000 Btu per hour or less, and electric storage water heaters with an 

input of 12 kilowatts [kW] or less; 

2. Instantaneous-type units which heat water, but contain no more than one 

gallon of water per 4,000 Btu per hour of input, including gas instantaneous 

water heaters with an input of 200,000 Btu per hour or less, oil instantaneous 

water heaters with an input of 210,000 Btu per hour or less, and instantaneous 

electric water heaters with an input of 12 kilowatts or less; and 

3. Heat pump-type units, with a maximum current rating of 24 amperes at a 

voltage no greater than 250 volts, which are products designed to transfer 

thermal energy from one temperature level to a higher temperature level for 

the purpose of heating water, including all ancillary equipment such as fans, 

storage tanks, pumps, or controls necessary for the device to perform its 

function.” Section 430.2 of 10 Code of Federal Regulations (CFR). 

The definition of a residential water heater is further described in appendix E to 

subpart B of part 430 of 10 CFR as follows: 

1. Gas-Fired Storage-Type Water Heater means a water heater that uses gas as 

the energy source, is designed to heat and store water at a thermostatically 

controlled temperature of less than 180 °F [degrees Fahrenheit] (82 °C 

[degrees Celsius]), has a nominal input of 75,000 Btu (79 MJ [megajoules]) 

per hour or less, and has rated storage capacity of not less than 20 gallons (76 

liters) nor more than 100 gallons (380 liters); 

2. Oil-Fired Storage-Type Water Heater means a water heater that uses oil as the 

energy source, is designed to heat and store water at a thermostatically 

controlled temperature of less than 180 °F (82 °C), has a nominal input of 

105,000 Btu/h (110 MJ/h) or less, and has a manufacturer’s rated storage 

capacity of 50 gallons (90 liters) or less; 

3. Electric Storage-Type Water Heater means a water heater that uses electricity 

as the energy source, is designed to heat and store water at a thermostatically 

controlled temperature of less than 180 °F (82 °C), has a nominal input of 12 

kilowatts (40,956 Btu/h) or less, an has a rated storage capacity of not less 

than 20 gallons (76 liters) nor more than 120 gallons (450 liters); 

4. Tabletop Water Heater means a water heater in a rectangular box enclosure 

designed to slide into a kitchen countertop space with typical dimensions of 

36 inches high, 25 inches deep and 24 inches wide; 

5. Instantaneous Gas-fired water heater means a water heater that uses gas as the 

energy source, initiates heating based on sensing water flow, is designed to 

deliver water at a controlled temperature of less than 180 °F (82 °C), has an 

input greater than 50,000 Btu/h (53 MJ/h) but less than 200,000 Btu/h (210 

MJ/h), and has a manufacturer’s specified storage capacity of less than 2 

gallons (7.6 liters); and 

6. Instantaneous Electric Water Heater–Reserved 

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The energy conservation standards for residential water heaters are represented in 

terms of the energy factor (EF). Appendix E of subpart B, section 430 of 10 CFR. (42 

U.S.C. 6295(e)(1)) The EF is the ratio of the heat delivered to the energy consumed 

according to the specific test procedure for residential water heaters. The EF accounts for 

both recovery efficiency and standby losses at prescribed patterns of hot-water draws 

totaling 64.3 gallons per day. 

In DOE’s regulations, four types of residential heating equipment are referred to 

as direct heating equipment. DOE defines vented home heating equipment as “home 

heating equipment, not including furnaces, designed to furnish warmed air to the living 

space of a residence, directly from the device, without duct connections (except that 

boots not to exceed 10 inches beyond the casing may be permitted) and includes: vented 

wall furnace, vented floor furnace, and vented room heater.” Section 430.2 of 10 CFR. 

Section 430.2 defines a vented wall furnace (gravity type and fan type), vented 

floor furnace, and vented room heater: 

1. Vented wall furnace means a self-contained vented heater complete with 

grilles or the equivalent, designed for incorporation in, or permanent 

attachment to, a wall of a residence and furnishing heated air circulated by 

gravity or by a fan directly into the space to be heated through openings in 

the casing. 

2. Vented floor furnace means a self-contained vented heater suspended from 

the floor of the space being heated, taking air from combustion from 

outside this space. The vented floor furnace supplies heated air circulated 

by gravity or by a fan directly into the space to be heated through openings 

in the casing. 

3. Vented room heater means a self-contained, free standing, nonrecessed, 

vented heater for furnishing warmed air to the space in which it is 

installed. The vented room heater supplies heated air circulated by gravity 

or by a fan directly into the space to be heated through openings in the 

casing. 

As to direct heating equipment, before the enactment of NAECA, EPCA included 

“home heating equipment” in DOE’s appliance standards program. DOE construed this 

term as covering unvented as well as vented products, and prescribed a separate test 

procedure for each. 43 FR 20128, 20132 (May 2, 1978). However, when NAECA 

replaced the term “home heating equipment” with “direct heating equipment” in 

NAECA’s amendments to EPCA in 1987 (42 U.S.C. 6295(e)(3)), the new energy 

conservation standards for this equipment only affected gas products and the statutorilyprescribed standards used the AFUE descriptor, which applies to vented, but not 

unvented, equipment. Because of the limitation imposed by the statute's use of the AFUE 

descriptor, subsequent DOE actions concerning direct heating equipment have focused 

solely on vented products. The AFUE represents the heat transferred to the conditioned 

space divided by the fuel energy supplied. 

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DOE defines “pool heaters” under NAECA as “an appliance designed for heating 

nonpotable water contained at atmospheric pressure, including heating water in 

swimming pools, spas, hot tubs and similar applications.” (42 U.S.C. 6291(25)) 

The energy conservation standard for pool heaters is represented by the thermal 

efficiency. Section 430.32(k) of 10 CFR. (42 U.S.C. 6295(e)(2)) Thermal efficiency 

represents the heat transferred to the nonpotable water divided by the fuel energy 

supplied. 

3.1.3 Product Classes 

DOE categorized the product types (i.e., residential water heaters, residential 

direct heating equipment, and pool heaters) into product classes and will formulate a 

separate energy conservation standard for each product class. The criteria for separation 

into different classes are type of energy used, capacity, and other performance-related 

features such as those that provide utility to the consumer or others deemed appropriate 

by the Secretary that would justify the establishment of a separate energy conservation 

standard. (42 U.S.C. 6295(q) and 6316(a)) For residential water heaters, the product 

classes are based on energy source (i.e., gas or electric) and design (i.e., storage-type, 

tabletop, and instantaneous or “tankless”). The product classes shown in Table 3.1.1 were 

established by the January 17, 2001, Energy Conservation Standards for Water Heaters; 

Final Rule (the January 2001 final rule) amending the energy conservation standards for 

residential water heaters and incorporated into section 430.32(d). 66 FR 4474, 4497 

(January 17, 2001). 

Table 3.1.1 Product Classes for Residential Water Heaters 

Residential Water Heater Type Characteristics 

Gas-Fired Storage Type Nominal input of 75,000 Btu/h or less; rated storage volume from 20 to 

100 gallons 

Oil-Fired Storage Type Nominal input of 105,000 Btu/h or less; rated storage volume of 50 

gallons or less 

Electric Storage Type Nominal input of 12 kW (40,956 Btu/h) or less; rated storage volume 

from 20 to 120 gallons 

Tabletop Dimensions of 36 inches high, 25 inches deep, and 24 inches wide 

Instantaneous Gas-Fired Nominal input of over 50,000 Btu/h up to 200,000 Btu/h; rated storage 

volume of 2 gallons or less 

Instantaneous Electric Input of 12 kW or less; contains no more 

than one gallon of water per 4,000 Btu/h of input 

Table 3.1.2 shows the product classes for direct heating equipment, as established 

by NAECA. (42 U.S.C. 6295(e)(3)) 

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Table 3.1.2 Product Classes for Direct Heating Equipment

Direct Heating Equipment Type Heating Capacity (Btu/h) 

Gas Wall Fan Type Up to 42,000 

Over 42,000 

Gas Wall Gravity Type 

Up to 10,000 

Over 10,000 up to 12,000 

Over 12,000 up to 15,000 

Over 15,000 up to 19,000 

Over 19,000 up to 27,000 

Over 27,000 up to 46,000 

Over 46,000 

Gas Floor 

Up to 37,000 

Over 37,000 

Gas Room 

Up to 18,000 

Over 18,000 up to 20,000 

Over 20,000 up to 27,000 

Over 27,000 up to 46,000 

Over 46,000 

Direct heating product class description. Vented hearth products, sold as either 

fireplaces, fireplace inserts, gas stoves, or log sets, can be used to provide residential 

space heating. When used to furnish heat to a living space, vented hearth products 

provide the same function and utility as vented heaters. The definition for vented home 

heating equipment (or vented heater) (10 CFR 430.2 ) states that this equipment is 

designed to furnish warmed air to the living space of the residence, directly from the 

device, without duct connections and includes vented wall furnaces, vented floor 

furnaces, and vented room heaters. Vented hearth products also furnish warmed air to the 

living space of a residence, directly from the device, without duct connections. Therefore, 

the vented heater definitions stated previously include vented hearth products. 

The energy conservation standards for direct heating equipment apply to a vented 

hearth product if the product has energy-saving features such as a blower or a thermostat, 

or if provides the same function and utility as vented heaters by supplying space heating. 

Therefore, the energy conservation standards for gas wall fan or gravity-type furnaces 

apply to recessed vented hearth products and the energy conservation standards for gas 

room heaters apply to non-recessed vented hearth products. Fireplace heaters also provide 

the same utility and function as either gas wall furnaces or gas room heaters, and they do 

not utilize any specific technologies unique to themselves. 

As a result, the direct heating equipment product class descriptions could be 

revised to reflect the inclusion of vented hearth products within direct heating equipment. 

Table 3.1.3 shows potential direct heating equipment product class description revisions 

DOE is considering in the current rulemaking. 

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Table 3.1.3 Direct Heating Equipment Product Class Description Revision

Direct Heating Equipment Type Heating Capacity (Btu/h) 

Gas Wall Fan Type 

and 

Gas, Recessed, Fan-Type Hearth Products 

Up to 42,000 

Over 42,000 

Gas Wall Gravity Type 

and 

Gas, Recessed, Gravity-Type Hearth Products 

Up to 10,000 

Over 10,000 up to 12,000 

Over 12,000 up to 15,000 

Over 15,000 up to 19,000 

Over 19,000 up to 27,000 

Over 27,000 up to 46,000 

Over 46,000 

Gas Floor 

Up to 37,000 

Over 37,000 

Gas Room 

and 

Gas, Non-Recessed Hearth Products 

Up to 18,000 

Over 18,000 up to 20,000 

Over 20,000 up to 27,000 

Over 27,000 up to 46,000 

Over 46,000 

For pool heaters, the only product class is gas-fired pool heaters, which is 

established by NAECA. (42 U.S.C. 6295(e)(2)) 

3.1.4 Product Test Procedures 

Test procedures exist for all three products covered by this rulemaking. DOE 

established test procedures for residential water heaters, residential direct heating 

equipment, and pool heaters through the rulemaking process, initially established by a 

final rule published on October 17, 1990, codified at appendix E to subpart B of 10 CFR 

Part 430. 55 FR 42163. DOE amended the residential water heater test procedure on May 

11, 1998, by adding the following provisions: (1) a revision to the method used in 

determining the first hour rating of storage-type water heaters, (2) an additional rating for 

electric and instantaneous gas-fired water heaters, and (3) a revision to the definition of a 

heat pump water heater. 63 FR 25996. On July 20, 1998, DOE published in the Federal 

Register a correction to the May 1998 final rule, which added residential water heater 

testing schematics. 63 FR 38737. Along with the amended energy conservation standards 

published in the January 2001 final rule, DOE also amended the test procedure by adding 

a definition for tabletop water heaters and reaffirming the test methods specified in 

appendix E to subpart B of 10 CFR Part 430. 66 FR 4476. 

DOE prescribed a test procedure for vented types of gas-fired direct heating 

equipment in a notice published in the Federal Register on May 2, 1978. 43 FR 20182. 

Thereafter, on May 12, 1997, DOE published a final test procedure rule that amended the 

test procedures for direct heating equipment, and, in particular, vented home heating 

equipment. 62 FR 26140. The May 1997 final rule included modified calculation 

procedures for the weighted-average steady-state efficiency and AFUE for certain 

manually controlled heaters, and added a procedure for calculating the annual energy 

consumption of fossil fuel and auxiliary electrical energy for these types of products. 

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On May 12, 1997, DOE published in the Federal Register a final rule that 

amended the test procedure for pool heaters. 62 FR 26140. The May 1997 final rule 

updated the referenced American National Standards Institute (ANSI) standard for pool 

heaters from ANSI Standard Z21.56-1986, Gas-Fired Pool Heaters, to ANSI Standard 

Z21.56-1994, Gas-Fired Pool Heaters. This update added a procedure for calculating the 

annual energy consumption of fossil fuel auxiliary electrical energy for pool heaters and a 

seasonal efficiency descriptor. 62 FR 26141. 

3.2 MARKET ASSESSMENT 

The following market assessment identifies the manufacturer trade associations, 

domestic and international manufacturers of residential water heaters, direct heating 

equipment and pool heaters and their corresponding market shares, and regulatory and 

non-regulatory programs. The market assessment also provides historical shipment data; 

describes the cost structure for the residential water heater, direct heating equipment, and 

pool heater industries; and summarizes relevant market performance data for each 

product type. 

3.2.1 Trade Associations 

DOE recognizes the importance of trade groups in disseminating information and 

providing growth to the industry that they support. To gain insight into the residential 

water heater, direct heating equipment, and pool heater industries, DOE researched 

various associations available to manufacturers, suppliers, and users of such equipment. 

DOE also used the member lists of these groups to construct a database of domestic 

manufacturers. 

DOE identified several trade groups that support, or have an interest in, the 

residential water heater, direct heating equipment, and pool heater industries, including 

AHRI, the Hearth, Patio & Barbecue Association (HPBA), and the Association of Pool 

and Spa Professionals (APSP). 

3.2.1.1 Air-Conditioning, Heating, and Refrigeration Institute 

AHRIb is a national trade association of manufacturers of residential, commercial, 

and industrial appliances and equipment, components and related products. AHRI was 

established in January of 2008 when the Air-Conditioning and Refrigeration Institute 

(ARI) merged with the Gas Appliance Manufacturers Association (GAMA). AHRI's 

scope includes gas-fired, oil-fired, and electric products and equipment. “[AHRI] 

members are responsible for more than 90 percent of space and water heating shipments 

in the United States” during 2007.2 “[AHRI] helps its members stay abreast of relevant 

legislative and regulatory developments; supports the development of improved products 

and installation procedures; compiles statistical reports of industry shipments; sponsors 

and coordinates advertising and consumer education programs; and sponsors efficiency 

certification programs for space heating, water heating, air-conditioning, and refrigeration 

products and equipment”3

. AHRI maintains the AHRI Efficiency Certification Program. 

b For more information, please visit www.ahrinet.org. 

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AHRI also maintains a database of products and equipment tested under its certification 

program on their website. The majority of heating products currently manufactured by c both AHRI manufacturers and non-member manufacturers are included in this database. 

Table 3.2.1 shows manufacturers of products covered by this rulemaking represented in 

AHRI’s Consumers' Directory of Certified Efficiency Ratings for Heating and Water 

Heating Equipment (from this point forward referred to as the AHRI directory). 

d Table 3.2.1 Manufacturers Whose Products Are Included in the AHRI Directory 

Residential Water Heaters Direct Heating Equipment Pool Heaters 

A.O. Smith Corporation CFM Corporation Hayward Industries, Inc. 

Bock Water Heaters, Inc. Empire Comfort Systems, 

Inc. 

Jandy Pool Products, Inc. 

Bradford White Corporation Lennox Hearth Products Lochinvar Corporation 

Bosch Water Heating Louisville Tin and Stove 

Co. 

Pentair, Inc. 

Heat Transfer Products, Inc. Rinnai Corporation Raypak 

Lochinvar Corporation Williams Furnace Company 

Rheem-Ruud 

Rinnai America 

Corporation 

Takagi Industrial Co. USA 

The majority of residential water heater, direct heating equipment, and pool heater 

manufacturers identified in section 3.2.2.1 are represented by AHRI. 

3.2.1.2 Hearth, Patio & Barbecue Association 

HPBA “includes manufacturers, retailers, distributors, manufacturers' 

representatives, service and installation firms, and other companies and individuals - all 

having business interests in and related to the hearth, patio, and barbecue products 

industries.”4e 

3.2.1.3 Association of Pool and Spa Professionals 

APSP is an “international trade association and leading industry advocate 

representing the swimming pool, spa, and hot tub industry.”5 APSP also delivers public 

relations, advertising, and water safety messages to consumers. It also maintains industry 

c For more information, please visit www.gamapower.org.

d A.O Smith Water Corporation refers to A. O. Smith Water Products Company, A. O. Smith Water

Heaters, State Water Heaters, Reliance Water Heater Company, Apollo Hydroheat and Cooling, Maytag

Water Heaters, American Water Heater Company, GSW Water Heating, and John Wood Water Heaters,

Bosch Water Heating is a division of Bosch USA which is a branch of Bosch Group, Rheem-Ruud refers to

Rheem Manufacturing Company, Ruud Water Heating, the Paloma Group, and Paloma Tankless, Rinnai

America Corporation and Rinnai Corporation are subsidiaries of Rinnai Japan, Takagi Industrial Company

USA is a division of Takagi, Lennox Hearth Products refers to Lennox International, Incorporated,

Williams Furnace Company is a subsidiary of Continental Materials Corporation, Pentair refers to Pentair

Water Pool and Spa, Incorporated, and Raypak refers to Raypak, Incorporated

e For more information, visit www.hpba.org/index.php?id=46.

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EE-2006-STD-0129 and EERE-2006-BT-STD-0129 COMMENT 32.2
data and statistics regarding the pool and spa industries. Members can obtain information 

on the products available to consumers, historical and geographical pool and spa 

installation statistics, in addition to other types of data. Additionally, the APSP offers 

pool and spa professionals resources and tools to assist in business operations. 

3.2.2 Manufacturer Information 

The following section provides information about manufacturers of residential 

water heaters, direct heating equipment, and pool heaters, including estimated market 

shares, potential small business impacts, and product distribution channels. 

3.2.2.1 Manufacturers and Market Shares 

Using publicly available data (e.g., Appliance Magazine and market assessments 

done by third parties), DOE estimates the market shares for manufacturers of each of the 

three products contained in this standards rulemaking. Manufacturers may offer multiple 

brand names. 

DOE estimates that there are approximately 26 domestic manufacturers of 

residential water heaters.6 Nearly the entire domestic market—some 98 percent—is 

controlled by three domestic manufacturers: Rheem-Rudd, A.O. Smith/State Industries, 

American Water Heater (A.O. Smith subsidiary as of 20057

), and Bradford-White.8 Of 

the remaining domestic market share, eight manufacturers hold the majority, including: 

Bock Water Heaters, Inc.; Bosch Water Heating; GSW Water Heating Company 

(subsidiary of American Water Heater Company), Heat Transfer Products, Inc., Noritz 

America, Rinnai America Corporation, State Industries, Inc. (subsidiary of American 

Water Heater Company), and Takagi Industrial Co. USA. Table 3.2.2 lists these 

manufacturers by market shares. 

Table 3.2.2 Major and Other Residential Water Heater Manufacturers 

Major Manufacturers* Other Manufacturers** 

Rheem-Ruud Bock Water Heaters, Inc. 

A. O. Smith Corporation Bosch Water Heating 

Bradford White Corporation Heat Transfer Products, Inc. 

Noritz America 

Rinnai America Corporation 

Takagi Industrial Co. USA 

* Manufacturers with 10 percent or more of market share. 

** Manufacturers with less than 1 percent of market share. 

Figure 3.2.1 illustrates the 2006 market shares for the domestic residential water 

heater market as depicted in the September 2007 issue of Appliance Magazine. 

3-10 

EE-2006-STD-0129 and EERE-2006-BT-STD-0129 COMMENT 32.2
Others 

Bradford-White 0.6% 

American Water 

Heater 

22.8% 

A.O. Smith/State 

Industries 

25.9% 

9 Figure 3.2.1 2006 Market Shares for the Domestic Residential Water Heaters 

The residential water heater market can be further divided into manufacturers of 

gas-fired, oil-fired, and electric storage water heaters, and gas-fired or electric 

instantaneous water heaters. Table 3.2.3 shows manufacturers that produce these types of 

residential water heaters. 

Rheem 

36.9% 

13.8% 

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EE-2006-STD-0129 and EERE-2006-BT-STD-0129 COMMENT 32.2
Table 3.2.3 Residential Water Heater Manufacturers by Technology Type

Manufacturer 

Residential Water Heater Type 

GasFired 

Storage 

Oil-Fired 

Storage 

Electric 

Storage 

Instantaneous 

Gas-Fired 

Instantaneous 

Electric 

A. O. Smith Corporation X X X 

Bock Water Heaters, Inc. X X 

Bosch Water Heating X X 

Bradford White 

Corporation 

X X X 

Heat Transfer Products, 

Inc. 

X X X 

Lochinvar Corporation X X 

Noritz X 

Rheem-Ruud X X X 

Rinnai America 

Corporation 

X 

Takagi Industrial Co. 

USA 

X 

TOTALS 6 4 5 5 1 

DOE estimates that there are 8 domestic manufacturers of direct heating 

equipment.f Table 3.2.4 lists these manufacturers. 

Table 3.2.4 Gas-Fired Direct Heating Equipment Manufacturersg 

Direct Heating Equipment Manufacturers 

Major Manufacturers Other Manufacturers 

Empire Comfort Systems, Inc. CFM Corporation 

Louisville Tin and Stove Co. Rinnai Corporation 

Williams Furnace Company Lennox Hearth Products 

Hearth and Home Technologies 

Monitor Products, Inc. 

Due to the small total size of the direct heating equipment market and 

confidentiality concerns, DOE was unable to disclose any market share data for direct 

heating equipment manufacturers. DOE divided direct heating equipment manufacturers 

into “major” and “other” based on the current industry characteristics and industry 

expertise. Major companies have larger market shares. 

DOE identified five domestic manufacturers of residential gas-fired pool heaters. 

Table 3.2.5 lists these manufacturers. 

f Estimate based on membership in AHRI (former GAMA members) and online product searches. 

g Williams Furnace Company is a subsidiary of Continental Materials Corporation, Rinnai Corporation is a 

subsidiary of Rinnai Japan, Lennox Hearth Products refers to Lennox International, Incorporated, and 

Hearth and Home Technologies is as subsidiary of HNI Corporation. 

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EE-2006-STD-0129 and EERE-2006-BT-STD-0129 COMMENT 32.2
h Table 3.2.5 Gas-Fired Pool Heater Manufacturers 

Pool Heater Manufacturers 

Major Manufacturers Other Manufacturers 

Hayward Industries, Inc. Lochinvar Corporation 

Jandy Pool Products, Inc. 

Raypak 

Pentair 

Due to the small total size of the pool heater market and confidentiality concerns, 

DOE was unable to disclose any market share data for residential pool heater 

manufacturers. DOE divided pool heater manufacturers into “major” and “other” based 

on the current industry characteristics and industry expertise. Major companies have 

larger market shares. 

3.2.2.2 Small Business Impacts 

DOE realizes that small businesses may be particularly affected by the 

promulgation of energy conservation standards for residential water heaters, direct 

heating equipment, and pool heaters. The Small Business Administration (SBA) defines 

small business manufacturing enterprises for residential water heaters, direct heating 

equipment, and pool heaters as those having 500 employees or fewer.10 SBA lists small 

business size standards for industries as they are described in the North American 

Industry Classification System (NAICS). The size standard for an industry establishes the 

largest size that a for-profit entity can be for the particular industry and still qualify as a 

small business for Federal Government programs. These size standards are generally 

expressed in terms of the average annual receipts or the average employment of a firm. 

For residential water heaters, direct heating equipment, and pool heaters, the size 

standards matched to NAICS code 335228, Other Major Household Appliance 

Manufacturing and NAICS code 333414, Heat Equipment (Except Warm Air Furnaces) 

Manufacturing. The size standard is 500 employees or fewer. 

DOE will study the potential impacts on these small businesses during the 

manufacturer impact analysis, which will be conducted as a part of the Notice of 

Proposed Rulemaking (NOPR) analysis. Table 3.2.6 lists the small business residential 

water heaters, direct heating equipment, and pool heating manufacturers that DOE has 

identified. 

h Raypak refers to Raypak, Incorporated and Pentair refers to Pentair Water Pool and Spa, Incorporated. 

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EE-2006-STD-0129 and EERE-2006-BT-STD-0129 COMMENT 32.2
Table 3.2.6 Small Business Manufacturers of Residential Water Heaters, Direct 

Heating Equipment, and Pool Heaters 

Water Heaters Direct Heating Equipment Pool Heaters 

Bock Water Heaters Empire Comfort Systems, Inc. Hayward Industries, Inc. 

Heat Transfer Products, Inc. Louisville Tin and Stove Co. Lochinvar Corporation 

Williams Furnace Company 

3.2.3 Distribution Channels 

Analysis of the distribution channels of products covered by this rulemaking is an 

important facet of the market assessment. DOE gathered information regarding the 

distribution channels for residential water heaters, direct heating equipment, and pool 

heaters from publicly available sources. 

The residential water heater market can be divided into two areas: replacement of 

existing units and new construction. Most residential water heaters (between 49 and 59 

percent) are distributed through wholesalers.11 These wholesalers then resell residential 

water heaters to contractors and plumbers, plumbing supply houses, local hardware 

stores, and other retail channels. For instantaneous gas-fired water heaters in particular, 

the wholesale distribution channel accounts for an even larger percentage. Residential 

12 water heaters are also sold through retail distribution (between 41 and 51 percent). 

These residential water heaters are sold directly by residential water heater manufacturers 

to home improvements stores, chain hardware stores, and other large retailers. For the 

replacement market, according to DOE’s 2000 water heater technical support document 

(TSD), approximately 60 percent of replacements were sold through the retail distribution 

channel.13 For new construction, new homebuilders or contractors and plumbers may 

then purchase these residential water heaters, or customers may purchase a residential 

water heater and install it themselves or hire a contractor to complete the installation. 

Appliance Magazine’s annual Share-of the-Market survey stated that 9.45 million 

residential water heaters were shipped in 2006.14 According to the Northwest Energy 

Efficiency Alliance (NEEA)’s analysis of residential water heater distribution channels, 

20 percent were purchased by homebuilders for use in new construction. The remaining 

80 percent of sales were retrofit units replacing existing residential water heaters. Of 

these retrofit units, approximately 52 percent were purchased and installed by consumers, 

15 and approximately 48 percent were installed by contractors and plumbers. 

For analysis purposes and based on the information found, DOE defined four 

distribution channels for residential water heaters. 

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EE-2006-STD-0129 and EERE-2006-BT-STD-0129 COMMENT 32.2
3-15 

Figure 3.2.2 Water Heaters Distribution Channel 

Consumer purchases and installations typically do not play role in the established 

distribution channels of direct heating equipment. For replacement applications, most 

sales go through distributors to contractors, and then to consumers. In new home 

applications, most sales go through distributors to contractors hired by the builder. Thus, 

DOE defined two distribution channels for analysis purposes. Figure 3.2.3 illustrates the 

direct heating equipment distribution channel. 

Figure 3.2.3 Direct Heating Equipment Distribution Channel 

For pool heaters in replacement applications, most sales go through distributors or 

retailers to pool service companies. In most new home applications, the pool builder 

purchases the equipment from a distributor or wholesaler. Thus, DOE defined two 

distribution channels for analysis purposes. 

EE-2006-STD-0129 and EERE-2006-BT-STD-0129 COMMENT 32.2
3-16 

Figure 3.2.4 Pool Heater Distribution Channel 

3.2.4 Regulatory Programs 

The following section details current regulatory programs mandating energy 

conservation standards for residential water heaters, direct heating equipment, and pool 

heaters. Section 3.2.4.1 discusses current Federal energy conservation standards, and 

section 3.2.4.2 provides an overview of existing State standards. Sections 3.2.4.3 and 

3.2.4.4 review standards in both Canada and Mexico that may affect companies servicing 

the domestic market. 

3.2.4.1 Current Federal Energy Conservation Standards 

NAECA established energy conservation standards for residential water heaters, 

direct heating equipment,i

 and pool heaters and required that DOE conduct two cycles of 

rulemakings to determine if more stringent standards are economically justified and 

technologically feasible for these products. (42 U.S.C. 6295 (e)(1) and (4)) On February 

7, 1989 and October 17, 1990, DOE issued a final rule codifying the standards prescribed 

by NAECA, and thereby established the first set of energy conservation standards for 

residential water heaters, direct water heating equipment, and pool heaters. 54 FR 6077 

(February 7, 1989) and 55 FR 42163 (October 17, 1990). 

Pursuant to 42 U.S.C. 6295(e)(4)(A), on January 17, 2001, DOE published in the 

Federal Register the January 2001 final rule, effective on January 20, 2004, amending the 

energy conservation standards for residential water heaters. 66 FR 4474. 

 

i

 Initially, EPCA included vented and unvented home heating equipment in DOE’s appliance standards 

program. However, EPCA did not specifically use the term direct heating equipment. NAECA prescribed 

energy conservation standards for direct heating equipment instead of vented and unvented home heating 

equipment, but NAECA did not include a definition of the products covered under the direct heating 

equipment category. Since DOE has established test procedures to measure the energy efficiency of vented 

home heating equipment and the test procedures for unvented home heating equipment do not have an 

energy efficiency measure, DOE has determined that direct heating equipment only refers to vented home 

heating equipment for the purpose of this rulemaking. 

EE-2006-STD-0129 and EERE-2006-BT-STD-0129 COMMENT 32.2
Table 3.2.7 Federal Energy Conservation Standards for Residential Water Heaters

Residential Water Heater Class Minimum Energy Factor (EF) 

Gas-Fired Storage Type 0.67 – (0.0019 x Rated Storage Volume in gallons) 

Oil-Fired Storage Type 0.59 – (0.0019 x Rated Storage Volume in gallons) 

Electric Storage Type 0.97 – (0.00132 x Rated Storage Volume in gallons) 

Instantaneous Gas-Fired Type 0.62 – (0.0019 x Rated Storage Volume in gallons) 

Instantaneous Electric Type 0.93 – (0.00132 x Rated Storage Volume in gallons) 

Tabletop 0.93 – (0.00132 x Rated Storage Volume in gallons) 

DOE initially analyzed energy conservation standards for direct heating 

equipment as part of an eight-product standards rulemaking. When DOE analyzed direct 

heating equipment in these earlier proceedings, DOE only considered products 

categorized as vented home heating equipment. DOE issued a notice of proposed 

rulemaking (NOPR) on March 4, 1994, proposing to amend the energy conservation 

standards for direct heating equipment and other consumer products. 59 FR 10464. The 

Department of Interior and Related Agencies Appropriations Act for Fiscal Year 1996 

(P.L. 104-134) provided for a moratorium on proposing or issuing final rules for 

appliance standards rulemakings for the remainder of Fiscal Year 1996, thereby 

preventing DOE from finalizing the 1994 proposed standards and leaving the existing 

NAECA efficiency levels in place. Table 3.2.8 presents these energy conservation 

standards for direct heating equipment. 

Table 3.2.8 Federal Energy Conservation Standards for Direct Heating Equipment* 

Direct Heating Equipment Design Type Product Class, by Input 

Rating (Btu/h) 

AFUE (%) 

Gas Wall Fan Up to 42,000 73 

Over 42,000** 74 

Gas Wall Gravity 

Up to 10,000 59 

Over 10,000 up to 12,000 60 

Over 12,000 up to 15,000 61 

Over 15,000 up to 19,000 62 

Over 19,000 up to 27,000 63 

Over 27,000 up to 46,000** 64 

Over 46,000 65 

Gas Floor Up to 37,000 56 

Over 37,000** 57 

Gas Room 

Up to 18,000 57 

Over 18,000 up to 20,000 58 

Over 20,000, up to 27,000 63 

Over 27,000 up to 46,000 64 

Over 46,000** 65 

*Includes all of the product classes set forth in the Energy Policy and Conservation Act (EPCA) and codified

at 10 CFR Part 430.32(i).

**Representative product classes that DOE intends to explicitly analyze.

As with direct heating equipment, DOE initially analyzed standards for pool 

heaters as part of the eight-product standards rulemaking of 1994, 59 FR 10464, but 

never finalized the proposed standards (for reasons explained above). DOE has not 

amended the energy conservation standards for pool heaters since NAECA established 

them in 1987 and since the first standard went into affect in 1990. 42 U.S.C 6295 (e)(2) 

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EE-2006-STD-0129 and EERE-2006-BT-STD-0129 COMMENT 32.2
Existing energy conservation standards for residential pool heaters specify a thermal 

efficiency for pool heaters of no less than 78 percent. 10 CFR part 430.32(k). 

3.2.4.2 State Energy Conservation Standards 

The following States have established appliance energy efficiency regulations: 

Arizona, California, Connecticut, Maine, Maryland, Massachusetts, Minnesota, New 

Hampshire, New Jersey, New York, Oregon, Pennsylvania, Rhode Island, Vermont, and 

Washington. Of these, California is the only State that explicitly regulates equipment 

16 covered in this rulemaking. 

The State of California mandates energy conservation standards for residential 

water heaters. State standard levels are identical to Federal standard levels for each 

covered product. California also has regulations that extend the scope of Federal 

standards including standards for products outside of the rated storage capacity range and 

input capacity range stated for the product types covered by Federal standards. 

Additionally, California has specific regulations for instantaneous oil-fired water heaters, 

which are similar to the Federal standards for oil-fired storage water heaters.17 Table 

3.2.9 provides California’s water heater standards. 

18 Table 3.2.9 California State Efficiency Standards for Residential Water Heaters 

Appliance Energy 

Source 

Input Rating Rates 

Storage 

Volume 

(gallons) 

Minimum Energy Factor 

Storage Water 

Heaters Gas ≤ 75,000 Btu/h < 20 0.62 – (0.0019 x Volume) 

Storage Water 

Heaters Gas ≤ 75,000 Btu/h > 100 0.62 – (0.0019 x Volume) 

Storage Water 

Heaters Oil ≤ 105,000 Btu/h > 50 0.59 – (0.0019 x Volume) 

Storage Water 

Heaters Electricity ≤ 12 kW > 120 0.93 – (0.00132 x Volume) 

Instantaneous 

Water Heaters Gas ≤ 50,000 Btu/h Any 0.62 – (0.0019 x Volume) 

Instantaneous 

Water Heaters Gas ≤ 200,000 Btu/h ≥ 2 0.62 – (0.0019 x Volume) 

Instantaneous 

Water Heaters Oil ≤ 210,000 Btu/h Any 0.59 – (0.00132 x Volume) 

Instantaneous 

Water Heaters Electricity ≤ 12 kW Any 0.93 – (0.00132 x Volume) 

The State of California also mandates energy conservation standards for direct 

heating equipment. These standard levels are identical to the Federal energy conservation 

19 standard levels for direct heating equipment. 

California also mandates energy conservation standards for pool heaters. The 

State’s gas-fired pool heater standard is identical to the Federal standard level with an 

additional requirement that prohibits the use of constant burning pilots.20 California also 

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EE-2006-STD-0129 and EERE-2006-BT-STD-0129 COMMENT 32.2
issues standards for oil-fired and electric heat pump pool heaters. Table 3.2.10 provides 

21 these pool heater standards. 

22 Table 3.2.10 California State Energy Conservation Standards for Pool Heaters 

Residential Pool Heater Type Standard Level 

Oil-Fired 78% Thermal Efficiency 

Heat Pump 3.5 Average Coefficient of Performance 

3.2.4.3 Canadian Standards Association 

The Canadian Standards Association (CSA) is an independent standards-setting 

agency that establishes test procedures and efficiency standards that are typically adopted 

by the Canadian government. 

Residential Water Heaters 

CSA has specified energy conservation standards for residential water heaters. 

The CSA standards divide residential water heaters into several categories and 

subcategories, summarized in Table 3.2.11 below. 

23 Table 3.2.11 Canadian Efficiency Standards for Residential Water Heaters 

Water Heater Type Product Class Efficiency Standard 

Description 

Gas-Fired Storage Input rating ≤ 21.98 kW 

(75,000 Btu/h) and storage 

capacity 76 to 380 liters 

Minimum EF 

0.67 – 0.0005V 

Oil-Fired Storage Input rating ≤ 30.5 kW 

(107,000 kJ/h) and storage 

capacity ≤ 190 liters 

Minimum EF 

0.59 – 0.0005V 

Electric Storage Bottom Inlet 

50 to 270 liters Maximum Standby Loss 

40 + (0.20V) 

> 270 to 454 liters Maximum Standby Loss 

(0.472V) – 33.5 

Top Inlet 

50 to 270 liters Maximum Standby Loss 

35 + (0.20V) 

> 270 to 454 liters Maximum Standby Loss 

(0.472V) – 38.5 

Note: V=rated storage capacity in liters; EF=energy factor as defined by CSA P.3-04 for gasfired water heaters and CAN/CSA-B211-00 for oil-fired water heaters. 

Direct Heating Equipment 

Canada has product classes for vented gas fireplaces and fireplace heaters. Vented 

gas fireplaces are primarily used for aesthetic purposes, while vented gas fireplace 

heaters are designed to provide heat to the space where they are installed. Canada has not 

issued energy conservation standards for either of these products classes and has no plans 

24 to issue standards as of February 2008. 

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EE-2006-STD-0129 and EERE-2006-BT-STD-0129 COMMENT 32.2
Pool Heaters 

CSA has specified energy conservation standards for gas pool heaters similar to 

Federal energy conservation standards. This standard sets a minimum thermal efficiency 

of 78 percent. This standard only covers gas-fired pool heaters. 

3.2.4.4 Mexico 

Mexico has specified energy conservation standards for gas-fired water heaters. 

The Mexican standards divide gas-fired water heaters into domestic and commercial 

categories, summarized in Table 3.2.11 below. 

25 Table 3.2.12 Mexican Efficiency Standards for Water Heaters 

Water Heater Type Product Class Efficiency Standard 

Description 

Gas-Fired Domestic Hot Water Heaters Minimum Thermal Efficiency 

72% 

Commercial Hot Water Heaters Minimum Thermal Efficiency 

77% 

3.2.5 Voluntary Programs 

DOE reviewed several voluntary programs promoting energy-efficient residential 

water heaters, direct heating equipment, and pool heaters in the United States, including 

the American Council for an Energy Efficiency Economy (ACEEE), the Consortium for 

Energy Efficiency (CEE), the Environmental Protection Agency (EPA) ENERGY STAR 

program, the Federal Energy Management Program’s (FEMP) procurement program for 

energy-efficient products, various rebate programs offered by local utilities, and the 

Super Efficient Gas Water Heating Appliance Initiative (SEGWHAI). 

3.2.5.1 American Council for an Energy Efficient Economy 

ACEEE j is “dedicated to advancing energy efficiency as a means of promoting 

both economic prosperity and environmental protection.” ACEEE conducts technical and 

policy assessments, advises policy makers and program managers, works collaboratively 

with businesses and public interest groups, organizes conferences, publishes books, 

26 conference proceedings, and reports, and educates consumers and businesses. 

ACEEE works with industry to maintain a database of high efficiency residential 

water heaters and offers guidance to consumers on how to improve the efficiency of their 

residential water heaters. 

3.2.5.2 Consortium for Energy Efficiency 

CEEk, “a nonprofit public benefits corporation, develops initiatives for its North 

American members to promote the manufacture and purchase of energy-efficient 

j For more information, please visit www.aceee.org. 

k For more information, please visit www.cee1.org. 

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EE-2006-STD-0129 and EERE-2006-BT-STD-0129 COMMENT 32.2
products and services. The goal of the organization is to induce lasting structural and 

behavioral changes in the marketplace, resulting in the increased adoption of energyefficient technologies.”27 

CEE organizes a summary of utility sponsored rebate and incentive programs for 

efficient residential water heaters. This summary is available for free online in order to 

encourage consumers to purchase efficient residential water heaters, and take advantage 

of existing utility rebates. 

3.2.5.3 ENERGY STAR 

l ENERGY STAR, a voluntary labeling program backed by the U.S. 

Environmental Protection Agency (EPA) and DOE, identifies energy-efficient products 

through a qualification process. To qualify, a product must exceed Federal energy 

efficiency standards by a specified amount, or if no Federal standard exists, exhibit 

selected energy-saving features. The ENERGY STAR program qualifies the top quartile 

of products on the market, meaning that approximately 25 percent of products on the 

market meet or exceed the ENERGY STAR levels. On April 1, 2008, ENERGY STAR 

set requirements for gas-fired storage water heaters, whole-home gas tankless water 

heaters, gas condensing water heaters, heat pump water heaters, and solar water heaters. 

ENERGY STAR released the criteria on April 1, 2008 and it will go into effect on 

January 1, 2009. The requirements are summarized in Table 3.2.13. 

l For more information, please visit www.energystar.gov. 

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EE-2006-STD-0129 and EERE-2006-BT-STD-0129 COMMENT 32.2
Table 3.2.13 ENERGY STAR Residential Water Heater Criteria Issued on April 1, 

200828 

Product Type Criteria 

Gas Storage Water Heater 

• Minimum EF of 0.62 (0.67 beginning 

September 1, 2010) 

• Minimum first hour rating of 67 gallons 

• Minimum 6 year warranty on sealed 

system 

Whole-Home Gas Tankless Water Heater 

• Minimum EF of 0.82 

• Minimum Gallons per Minute of 2.5 over a 

77oF rise 

• Minimum 10 year warranty on heat 

exchanger and 5 years on parts 

Gas Condensing Storage Water Heater 

• Minimum EF of 0.80 

• Minimum first hour rating of 67 gallons 

• Minimum 8 year warranty on sealed 

system 

Heat Pump Water Heater 

• Minimum EF of 2.0 

• Minimum first-hour rating of 50 gallons 

per hour 

• Minimum 6 year warranty on sealed 

system 

Solar Water Heater 

• Minimum Solar Fraction of 0.5 

• OG-300 certification from the SRCC 

(Solar Rating and Certification 

Corporation) 

• Minimum 10 year warranty on solar 

collector, 6 years on storage tank, 2 years 

on controls, and 1 year for piping and parts 

3.2.5.4 Federal Energy Management Program 

“DOE’s FEMP m works to reduce the cost and environmental impact of the 

Federal Government by advancing energy efficiency and water conservation, promoting 

the use of distributed and renewable energy, and improving utility management decisions 

at Federal sites.”29 FEMP helps Federal buyers identify and purchase energy-efficient 

equipment. 

FEMP designates standards for water heaters purchased by the Federal 

Government. The designated FEMP gas-fired water heater standards levels appear in 

Table 3.2.14, and the FEMP electric water heater standards appear in Table 3.2.15. 

m For more information, please visit www.eere.energy.gov/femp. 

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30 Table 3.2.14 FEMP Gas-Fired Water Heater Performance Requirements 

Storage Tank Volume Energy Factor 

50 gallons or less 0.62 or higher 

31 Table 3.2.15 FEMP Electric Water Heater Performance Requirements 

Storage Tank Volume Energy Factor 

Less than 60 gallons 0.93 or higher 

60 gallons or more 0.91 or higher 

3.2.5.5 Rebate Programs 

Several local utilities offer rebate programs for high-efficiency residential water 

heaters. A small sample of these programs is listed in Table 3.2.16. 

Table 3.2.16 Sample Rebate Programs 

State Utility Product Requirement Value 

California 

Pacific Gas and 

Electric Company 

(PG&E)32 

Water Heaters 

Gas Storage: EF ≥ 0.62 and 

Capacity ≥ 30 gallons 

Electric Storage: EF ≥ 0.93 and 

Capacity ≥ 40 gallons 

$30 

Florida Central Florida 

Gas 33 

Gas Water 

Heaters 

Storage and tankless installation 

or replacement $350-$525 

Illinois City Water Light 

and Power 34 

Water Heaters Electric installation or 

replacement $200-$400 

Texas Austin Energy 35 Water Heaters New replacement $100 

3.2.5.6 Super-Efficient Gas Water Heating Appliance Initiative 

SEGWHAI “will develop and implement the next generation of cost-effective and 

high-efficiency storage-type gas-fired water heater. SEGWHAI will facilitate the 

development and commercialization of this next generation of standard water heater. 

SEGWHAI will develop a well funded incentive program to make mass 

commercialization possible for gas-fired storage water heater units that meet SEGWHAI 

performance specifications.”36 

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EE-2006-STD-0129 and EERE-2006-BT-STD-0129 COMMENT 32.2
3.2.6 Historical Shipments 

Annual product shipment trend data is an important aspect of the market 

assessment and the development of the standards rulemaking. Such data are used in the 

shipments analysis (chapter 9 of this TSD). As the number of new home starts and the 

percentage of consumers with multiple units of some appliances increases, unit shipments 

of most appliances are expected to increase as well. 

3.2.6.1 New Home Starts 

Trends in new home starts may directly affect shipments of residential water 

heaters, direct heating equipment, and pool heaters. While there is certainly both a 

replacement and remodeling market for some of these products, residential water heaters 

are fixtures in virtually all new homes. 

Figure 3.2.5 presents the number of new single-family and multifamily housing 

units started in the United States from 1990 to 2006. Over the 5-year period from 2000 to 

2005, single-family home starts increased 39.4 percent and peaked at 1,716,000 units 

annually. That increase settled to a 19.1 percent rise when home starts decreased to 

1,465,000 units in 2006. Multifamily unit starts have remained relatively flat over the 

37 past 7 years, hovering around 350,000 units annually. 

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EE-2006-STD-0129 and EERE-2006-BT-STD-0129 COMMENT 32.2
2000 

1800 

1600 

1400 

1200 

1000 

800 

600 

400 

200 

0 

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 

Single-Family Units 

Multi-Family Units 

Year 

Figure 3.2.5 New Privately Owned Single-Family and Multifamily Housing Unit 

Starts in the United States, 1990-200638 

3.2.6.2 Shipments 

Information about annual equipment shipment trends allows DOE to estimate the 

impacts of energy conservation standards on the residential water heater, direct heating 

equipment, and pool heater industries. DOE has examined unit shipments and value of 

shipments for residential water heaters, direct heating equipment, and pool heaters using 

publicly available data from the U.S. Census Bureau’s Annual Survey of Manufactures 

(ASM) and Current Industrial Reports (CIR), and the American Society of Heating, 

Refrigerating, and Air-Conditioning Engineers (ASHRAE) and AHRI estimates. 

3.2.6.3 Water Heater Unit Shipments 

The U.S. Census Bureau’s annual CIR provides annual unit shipments and value 

of shipments for various industries, including the residential water heater industry. The 

CIR however, does not separate shipments by new construction and replacement units. 

Figure 3.2.6 presents the annual shipments of the residential water heater industry 

39 (domestic and imported shipments) from 2001 to 2006 based on the annual CIRs. 

The numbers show two trends that impact the residential water heater industry. 

Overall, shipments of both electric water heaters and non-electric water heaters have 

declined since 2001. However, shipments of non-electric water heaters have declined 

more rapidly than shipments of electric water heaters, and in 2006, shipments of electric 

water heaters exceeded shipments of non-electric water heaters. Housing Units Started (thousands) 

3-25 

EE-2006-STD-0129 and EERE-2006-BT-STD-0129 COMMENT 32.2
10,000,000 Non-electric Water Heaters 

Electric Water Heaters 

9,000,000 Total 

8,000,000 

7,000,000 

6,000,000 

5,000,000 

4,000,000 

3,000,000 

2001 2002 2003 2004 2005 2006 

Year 

Figure 3.2.6 Residential Water Heater Industry Shipments (Domestic and 

Imported)40 

Table 3.2.17 presents the annual shipments of the residential water heater industry 

from 2003 to 2007 as estimated by AHRI. 

Table 3.2.17 AHRI Residential Water Heater Industry Estimated Shipment Data 

(New Construction and Replacement)*41 Units Shipped 

Year Electric, 

Storage 

Water 

Heaters 

(units) 

Gas-Fired, 

Storage 

Water 

Heaters 

(units) 

Oil-Fired, 

Storage Water 

Heaters** 

(units) 

Instantaneous 

Gas-Fired 

Water Heaters † 

(units) 

Total 

(units) 

2007 4,470,000 4,384,000 24,000 322,000 9,200,000 

2006 4,792,000 4,654,000 22,000 242,000 9,710,000 

2005 4,519,000 4,801,000 26,000 156,000 9,502,000 

2004 4,573,000 5,054,000 23,000 85,000 9,735,000 

2003 4,430,000 5,124,000 24,000 N/A 9,578,000 

* Shipments rounded to nearest 1,000 units 

** Only showing shipments for 30 and 32 gallon models 

† Shipment data not available for all years 

3.2.6.4 Water Heater Value of Shipments 

Table 3.2.18 provides the value of shipments for the residential water heater 

industry from 2000 to 2006 using the U.S. Census Bureau CIRs.42 The CIR expresses all 

dollar values in current dollars (i.e., 2003 data are expressed in 2003$, etc.). Using the 

3-26 

EE-2006-STD-0129 and EERE-2006-BT-STD-0129 COMMENT 32.2
Gross Domestic Product (GDP) Deflator, DOE converted each year’s value of shipments 

to 2007$; 2006 was the last year included in the CIR data set. 

43 Table 3.2.18 Residential Water Heater Value of Shipments by Year 

Year 

Value of Shipments 

($ Millions) 

Value of Shipments in 2007$ 

($ Millions) 

Non-Electric Electric Total Non-Electric Electric Total 

2006 902.8 651.9 1,554.8 924.3 667.4 1,591.7 

2005 970.2 638.4 1,608.6 1,024.7 674.2 1,698.9 

2004 884.1 545.3 1,429.4 971.4 599.2 1,570.6 

2003 985.6 569.5 1,555.1 1,109.7 641.2 1,750.9 

2002 842.0 576.0 1,418.0 965.3 660.4 1,625.7 

2001 799.3 555.7 1,355.0 931.5 647.6 1,579.1 

2000 843.6 572.7 1,416.3 1,006.7 683.5 1,690.2 

According to the data, non-electric and electric water heaters have had a relatively 

constant value of shipments between 2000 and 2006. Although the number of shipments 

of electric water heaters exceeded the number of shipments of non-electric water heaters 

in 2006, the value of non-electric water heater shipments continued to exceed the value of 

electric water heater shipments even as the number of shipments of non-electric water 

heaters declined. 

3.2.6.5 Direct Heating Equipment Shipments 

The direct heating industry does not report information about direct heating 

equipment shipments in as many details as the water heater industry due to 

confidentiality concerns. DOE received shipment data from AHRI regarding direct 

heating equipment. Information was not available for every year, and some information is 

omitted for confidentiality concerns. Generally, the direct heating product industry sees 

small volumes and a decline in shipments over this range of years. Some products, e.g., 

floor furnaces, are sold strictly as replacement products and expansion of the consumer 

base to increase shipments is not likely because more consumers install central heating 

systems to heat their homes as an alternative to using direct heating methods in recent 

years. 

Table 3.2.19 presents the annual shipments of the residential direct heating 

equipment industry from 2002 to 2006 as estimated by AHRI. 

3-27 

EE-2006-STD-0129 and EERE-2006-BT-STD-0129 COMMENT 32.2
Table 3.2.19 AHRI Residential Direct Heating Equipment Industry Estimated 

Shipment Data (New Construction and Replacement)*44 

Year Vented Wall 

Furnace** 

Direct Vent 

Wall 

Furnace** 

Floor 

Furnaces 

Vented 

Room 

Heaters †, †† 

Total 

2006 80,000 54,000 4,000 N/A 138,000 

2005 81,000 65,000 4,000 18,000 168,000 

2004 88,000 66,000 5,000 21,000 180,000 

2003 85,000 66,000 5,000 23,000 179,000 

2002 84,000 61,000 6,000 21,000 171,000 

* Shipments rounded to nearest 1,000 units 

** Not specific to only fan-type or gravity-type direct heating equipment 

† Shipment data not available for all years 

†† Including fireplaces 

3.2.6.6 Pool Heater Shipments 

The pool heater industry does not report information about pool heater shipments 

in as many details as the water heater industry due to confidentiality concerns. However, 

some information is still available. DOE estimated shipments for pool heaters in the 

national impacts analysis (NIA, chapter 10 of the preliminary TSD) and presents a 

sample of those shipments in Table 3.2.20. Generally, shipments increase for the years 

2003 to 2010 at an average rate of approximately 13,000 units each year. 

Table 3.2.20 Residential Gas-fired Pool Heater Shipments* 

Year Pool Heater Shipments 

2010 357,000 

2009 338,000 

2008 322,000 

2007 314,000 

2006 309,000 

2005 297,000 

2004 280,000 

2003 262,000 

* Shipments rounded to nearest 1,000 units 

3.2.7 Industry Cost Structure 

DOE developed the residential water heater, direct heating equipment, and pool 

heater industry cost structures from publicly available information from the ASM, 

Security Exchange Commission (SEC) 10-K reports filed by publicly owned 

manufacturers. Companies subject to SEC regulations report sales, costs of goods sold, 

gross profits, and various overhead costs in addition to overall performance and 

operations for the year. DOE analyzed SEC reports and developed a representative cost 

structure for the industries of each product type. 

DOE looked at SEC 10-K reports from 2000 to 2006. The cost of materials as a 

percentage of revenues for each product can fluctuate as raw material costs change from 

year to year. The cost of payroll for production workers as a percentage of revenues for 

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EE-2006-STD-0129 and EERE-2006-BT-STD-0129 COMMENT 32.2
each product type has declined, pointing to the possibility of increasing production 

automation in the heating products industry. Finally, selling, general, and administrative 

costs have shown a declining trend as manufacturers cut costs by reducing the nonproduction, support, and administrative employee base. 

Table 3.2.21 presents the industry cost structure derived from the SEC 10-K 

reports.n Each financial statement entry is presented as a percentage of total revenues. 

Table 3.2.21 Industry Cost Structure Using SEC Data 

Financial Statement Entry Percent of Total Revenues for Each Product Type 

Water Heaters Direct Heating Equipment Pool Heaters 

Profit before Financing 6.0 9.2 7.2 

Selling, General, and Administrative Expenses 14.0 12.5 16.0 

Research and Development 2.1 2.0 2.5 

Overhead 15.4 16.0 16.0 

Labor 10.1 9.4 10.0 

Material 52.4 50.9 48.3 

Total 100.0 100.0 100.0 

The manufacturer impact analysis (MIA) (chapter 12 of this TSD) presents a 

detailed financial analysis of each of the three product types covered by this rulemaking. 

This analysis identifies key financial inputs, including cost of capital, working capital, 

depreciation, capital expenditures, etc. 

3.2.8 Equipment Lifetime 

DOE reviewed available literature and consulted with manufacturers to establish 

typical equipment lifetimes (see life-cycle cost analysis, chapter 8 of this TSD). DOE 

combined these sources to develop average estimated lifetimes of the equipment covered 

by this rulemaking, listed in Table 3.2.22. 

n For more information, please visit www.sec.gov. 

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EE-2006-STD-0129 and EERE-2006-BT-STD-0129 COMMENT 32.2
Table 3.2.22 Equipment Lifetimes

Equipment Average Lifetime 

(years) 

Residential Water Heaters 

Gas-Fired Storage-Type Water Heater 12 

Oil-Fired Water Heater 9 

Electric Storage-Type Water Heater 14 

Instantaneous Gas-Fired-Type Water Heater 20 

Direct Heating Equipment 

Conventional Direct Heating Equipment 15 

Hearth Heating Equipment 30 

Pool Heaters 

Gas Pool Heater 6 

More information about residential water heater, direct heating equipment, and 

pool heater lifetimes can be found in the life-cycle cost and payback period analysis 

section (chapter 8) of the TSD. 

3.2.9 Market Performance Data 

46 DOE combined information from the AHRI directory,45 the CEC, and the FTC 

with other publicly available data from manufacturers’ catalogs of residential water 

heaters, direct heating equipment, and pool heaters to develop an understanding of these 

industries and their markets. The databases contain information such as manufacturer 

name, model number, and efficiency. 

Residential Water Heaters 

Figure 3.2.7 to Figure 3.2.14 show the distribution of energy factors of gas-fired 

storage, oil-fired storage, electric storage, and instantaneous gas-fired water heaters in the 

AHRI directory. 

3-30 

EE-2006-STD-0129 and EERE-2006-BT-STD-0129 COMMENT 32.2
400

350 

300 

250 

200 

150 

100 

50 

-

19 

58 

38 

24 12 

282 

118 

140 

251 

89 

49 

73 

14 

343 

Count: 1510 

Average Gas EF: 0.60 

Federal Standard for 40 Gallon Models 

(Representative Rated Capacity) 

Count

0.48

0.49

0.50

0.51

0 5. 2

0.53

0.54

0.55

0.56

0.57

0.58

0.59

0.60

0 6. 1

0 6. 2

0.63

0.64

0.65

0.66

0. 76

Energy Factor 

Figure 3.2.7 Distribution of Gas-Fired Storage-Type Water Heater Models by 

Energy Factor for All Storage Volumes 

Gas-fired water heater energy factors are concentrated between 0.58 and 0.63 EF. 

The minimum standard level listed on Figure 3.2.7 represents the Federal standard for a 

40-gallon gas-fired water heater, the representative volume for gas-fired water heaters. 

Chapter 5 of the TSD discusses the analysis of the representative volume. Figure 3.2.8 

shows another distribution of models, and how the Federal standard, defined by energy 

factor, relates to rated storage capacity based on the equation in Table 3.2.7. 

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EE-2006-STD-0129 and EERE-2006-BT-STD-0129 COMMENT 32.2
3-32 

0.45

0.50

0.55

0.60

0.65

0.70

20 30 40 50 60 70 80 90 100

Rated Volume (Gallons)

Energy Factor

Federal

Standard

Figure 3.2.8 Distribution of Gas-Fired Storage-Type Water Heater Models by 

Storage Capacity 

EE-2006-STD-0129 and EERE-2006-BT-STD-0129 COMMENT 32.2
3.5 

2 

3 

1 

2 

3 

1 1 

Count: 13 

Average Oil EF: 0.58 

Federal Standard for 30 Gallon Models 

(Representative Rated Capacity) 

3 

2.5 

2 

1.5 

1 

0.5 

0 

Count 

0 4. 8

0.49

0.50

0 5. 1

0 5. 2

0 5. 3

0 5. 4

0 5. 5

0 5. 6

0.57

0 5. 8

0 5. 9

0 6. 0

0 6. 1

0 6. 2

0 6. 3

0.64

0.65

0 6. 6

0 6. 7

0. 86 

Energy Factor 

Figure 3.2.9 Distribution of Oil-Fired Storage-Type Water Heater Models by 

Energy Factor for All Storage Volumes 

Oil-fired water energy factors are more diffused. The Federal standard level listed 

on Figure 3.2.9 represents the current Federal standard for a 30-gallon oil-fired water 

heater, the representative volume for oil-fired water heaters. Chapter 5 of the TSD 

discusses the analysis of the representative volume. Figure 3.2.10 shows another 

distribution of models, and how the Federal standard, defined by energy factor, relates to 

rated storage capacity based on the equation in Table 3.2.7. 

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EE-2006-STD-0129 and EERE-2006-BT-STD-0129 COMMENT 32.2
0.45 

0.50 

0.55 

0.60 

0.65 

0.70 

Federal Standard 

Energy Factor 

30 32 34 36 38 40 42 44 46 48 50

Rated Volume (Gallons) 

Figure 3.2.10 Distribution of Oil-Fired Storage-Type Water Heater Models by 

Storage Capacity 

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EE-2006-STD-0129 and EERE-2006-BT-STD-0129 COMMENT 32.2
Federal Standard for 50 Gallon Models 250

200 

150 

8 1 2 5 10 

25 

7 

1713 

206 

42 

1 1 

79 

52 50

98 

Count: 717 

Average EF: 0.92 

(Representative Rated Capacity) 

Count

100

50

-

0 8. 0

0 8. 2

0 8. 4

0 8. 6

0 8. 8

0 9. 0

0 9. 2

0 9. 4

0 9. 6

0 9. 8

1 0. 0

1 2. 0

1 4. 0

1 6. 0

1 8. 0

2 0. 0

2. 02

Energy Factor 

Figure 3.2.11 Distribution of Electric Storage-Type Water Heater Models by Energy 

Factor for All Storage Volumes 

Electric water heater energy factors are concentrated between 0.90 and 0.94. At 

the far right of Figure 3.2.11, two heat pump water heaters represent some of the 

maximum energy factors achieved in residential electric water heaters to date. The 

Federal standard level listed on Figure 3.2.11 represents the current Federal standard for a 

50-gallon electric water heater, the representative volume for electric water heaters. 

Chapter 5 of the TSD discusses the analysis of the representative volume. Figure 3.2.12 

shows another distribution of models, and how the Federal standard, defined by energy 

factor, relates to rated storage capacity based on the equation in Table 3.2.7. The two 

models rated at 0 gallons are add-on heat pump water heaters, which are not sold with 

storage tanks. 

3-35 

EE-2006-STD-0129 and EERE-2006-BT-STD-0129 COMMENT 32.2
3-36 

0.75

1.00

1.25

1.50

1.75

2.00

2.25

0 20 40 60 80 100 120 140

Rated Volume (Gallon)

Energy Factor

Federal Standard

Figure 3.2.12 Distribution of Electric Storage-Type Water Heater Models by 

Storage Capacity 

Figure 3.2.13 shows the distribution of energy factors of instantaneous gas-fired 

water heaters in the AHRI, CEC, and FTC directories.

EE-2006-STD-0129 and EERE-2006-BT-STD-0129 COMMENT 32.2
60 

6 4 

2 2 

4 4 

2 

5 4 6 6 5 

20 

55 

1 

19 17 

5 

9 

4 

2 

Count: 182 

Federal Standard Average EF: 0.79

50 

40 

30 

20 

10 

-

Count 

0 6. 0

0.62

0 6. 4

0 6. 6

0.68

0 7. 0

0 7. 2

0 7. 4

0 7. 6

0 7. 8

0 8. 0

0 8. 2

0.84

0 8. 6

0 8. 8

0.90

0 9. 2

0. 49 

Energy Factor 

Figure 3.2.13 Distribution of Instantaneous Gas-fired Water Heater Models by 

Energy Factor 

The instantaneous gas-fired water heater market is concentrated around units with 

energy factors ranging from 0.82 to 0.88. Figure 3.2.14 shows another distribution of 

instantaneous gas-fired water heaters and how energy factors relate to input capacity. The 

Federal standard line is based on the equation in Table 3.2.7 for existing Federal energy 

conservation standards as shown. The line is horizontal because energy factor does not 

depend on input capacity and because the rated storage volume for all instantaneous 

water heaters is 0 gallons. 

3-37 

EE-2006-STD-0129 and EERE-2006-BT-STD-0129 COMMENT 32.2
0.95 

0.9 

0.85 

0.8 

0.75 

0.7 

0.65 

0.6 

0 50 100 150 200 250 

Count: 182 

Average EF: 0.79 

Federal Standard 

Input (kBtu/h) 

Figure 3.2.14 Distribution of Instantaneous Gas-fired Water Heater Models by 

Input Capacity 

Direct Heating Equipment 

Figure 3.2.15, Figure 3.2.16, Figure 3.2.17 and Figure 3.2.18 show the input 

rating and AFUE of wall furnace fan-type, wall furnace gravity-type, floor furnace, and 

room heater direct heating equipment, respectively, listed in the AHRI directory and 

found through reviews of publicly available product literature. Energy Factor 

3-38 

EE-2006-STD-0129 and EERE-2006-BT-STD-0129 COMMENT 32.2
84

82 

80 

78 

76 

74 

72 

0 10000 20000 30000 40000 50000 60000 70000 

Count: 104 

Average AFUE: 76.7 

Federal Standard 

Input Rating (Btu/hour) 

Figure 3.2.15 Distribution of Wall Furnace Fan-Type Models by Input Rating and 

AFUE 

Some fan-type wall furnaces meet the Federal standard, while some exceed the 

Federal standard by over 10 absolute percentage points. There is no concentration of 

efficiencies. When fan-type wall furnaces are analyzed by input rating, efficiency varies 

across the range of AFUEs. For low efficiency products, efficiency increases with 

increasing input rating. For high efficiency products, efficiency decreases with increasing 

input rating. AFUE (percent)

3-39 

EE-2006-STD-0129 and EERE-2006-BT-STD-0129 COMMENT 32.2
85

80 

75 

70 

65 

60 

55 

0 10000 20000 30000 40000 50000 60000 

Count: 65 

Average AFUE: 66.1 

Federal Standard 

Input Rating (Btu/hour) 

Figure 3.2.16 Distribution of Wall Furnace Gravity-Type Models by Input Rating 

and AFUE 

Some gravity-type wall furnaces meet the Federal standard, while some exceed 

the Federal standard by over 20 absolute percentage points. The majority of gravity-type 

wall furnaces have efficiencies below 70 percent AFUE. There is no discernible 

relationship between input rating and efficiency. AFUE (percent)

3-40 

EE-2006-STD-0129 and EERE-2006-BT-STD-0129 COMMENT 32.2
58.5 

58 

57.5 

57 

56.5 

56 

55.5 

0 10000 20000 30000 40000 50000 60000 70000 80000 

Count: 23 

Average AFUE: 57.6 

Federal Standard 

Input Rating (Btu/hour) 

Figure 3.2.17 Distribution of Floor Furnace Models by Input Rating and AFUE 

Some floor furnaces meet the Federal standard, while some exceed the Federal 

standard by only one absolute percentage point. Floor furnaces have efficiencies in a 

narrow range between 56 percent AFUE and 58 percent AFUE, with an increase in 

efficiency as input rating increases. AFUE (percent) 

3-41 

EE-2006-STD-0129 and EERE-2006-BT-STD-0129 COMMENT 32.2
95 

90 

85 

80 

75 

70 

65 

60 

55 

0 10000 20000 30000 40000 50000 60000 70000 80000 

Count: 123 

Average AFUE: 64.3 

Federal Standard 

Input Rating (Btu/hour) 

Figure 3.2.18 Distribution of Room Heater Models by Input Rating and AFUE 

Some room heaters meet the Federal standard, while some exceed the Federal 

standard by approximately two absolute percentage points or more. Room furnaces have 

efficiencies in a range between 59 percent AFUE and 93 percent AFUE, with an increase 

in efficiency as input rating increases. The room heater rated at 93 percent AFUE was 

identified by DOE through review of publicly available product literature. AHRI does not 

list this product in their directory, however, DOE identified that this is currently available 

to consumers. 

Direct heating equipment product class organization. After reviewing the direct 

heating equipment markets DOE determined that a revision of the product classes 

originally established by NAECA could establish a more accurate representation of the 

market. Additionally, a revision could reduce the number of product classes of the 

Federal energy conservation standard. Currently, there are 16 product classes established 

for direct heating equipment. 

For fan-type wall furnaces, the market data in Figure 3.2.15 demonstrates two 

separate trends based on the efficiency range of the products. For higher efficiency 

products (i.e., 78 percent AFUE and higher), efficiency decreases as capacity increases. 

For lower efficiency products (i.e., 73 to 77 percent AFUE), efficiency increases as 

capacity increases. Therefore, the two product classes for gas wall, fan-type direct 

heating equipment could remain to distinguish these two trends. 

For gravity-type wall furnaces, the market data in Figure 3.2.16 indicates that 

manufacturers are not offering products over the entire input capacity range. Therefore, AFUE (percent) 

3-42 

EE-2006-STD-0129 and EERE-2006-BT-STD-0129 COMMENT 32.2
some product classes may be unnecessary, and the five product classes labeled “up to 

10,000 Btu/h,” “over 10,000 and up to 12,000 Btu/h,” “over 12,000 and up to 15, 000 

Btu/h,” “over 15,000 and up to 19,000 Btu/h,” and “over 19,000 and up to 27,000 Btu/h” 

could be consolidated into a single product class labeled “up to 27,000 Btu/h.” This 

would leave three product classes for gas wall gravity type furnaces. 

For floor furnaces, the AHRI directory lists only 23 products in Figure 3.2.17, and 

more than 75 percent of products are rated above 37,000 Btu/h. Additionally, only one of 

these products is rated with an AFUE below 57 percent, which is the Federal energy 

conservation standard for products rated above 37,000 Btu/h. However, DOE notes that 

when comparing the models with the highest AFUE rating between the two product 

classes, the energy savings potential increases as the input capacity range increases. This 

would suggest that, for gas floor-type furnaces, input capacity does affect the AFUE of 

the products. However, the two product classes for gas floor direct heating equipment 

could be combined into a single product class. 

For room furnaces, the relationship between AFUE and input rating established 

by the Federal energy conservation standards and shown in Figure 3.2.18 is generally 

similar to the trend found among products listed in the AHRI directory. The market data 

show a general trend of increasing AFUE with input capacity range. However, some of 

the input capacity ranges could be further consolidated based on the distribution of 

models in the AHRI directory. In particular, the two lower input capacity ranges could be 

consolidated into a single product class (i.e., input ratings up to 20,000 Btu/h) with a 

corresponding single amended energy conservation standard. As a result, four product 

classes for gas room heaters would be established for the amended energy conservation 

standards. 

A revision of the direct heating equipment product classes could result in a 

reduction of the overall number of product classes. As an example, DOE could revise the 

direct heating equipment to reflect the product classes shown in Table 3.2.23. DOE will 

further investigate direct heating equipment product class organization during the NOPR 

phase of this rulemaking 

3-43 

EE-2006-STD-0129 and EERE-2006-BT-STD-0129 COMMENT 32.2
Table 3.2.23 Potential Revised Product Classes for Direct Heating Equipment

Direct Heating Equipment Type Heating Capacity (Btu/h) 

Gas Wall Fan Type Up to 42,000 

Over 42,000 

Gas Wall Gravity Type 

Up to 27,000* 

Over 27,000 up to 46,000 

Over 46,000 

Gas Floor All* 

Gas Room 

Up to 20,000* 

Over 20,000 up to 27,000 

Over 27,000 up to 46,000 

Over 46,000 

*Product classes consolidated 

Pool Heaters 

Figure 3.2.19 shows the distribution and thermal efficiency of gas-fired pool 

heaters in the CEC and FTC directories. 

100 

Count: 193 

95 Average AFUE: 82.3 

90 

85 

80 

Federal Standard 

75 

0 200 400 600 800 1000 1200 

Input Rating (Btu/hour) 

Figure 3.2.19 Distribution of Pool Heater Models by Input Capacity and Thermal 

Efficiency 

The majority of pool heaters are rated with an input capacity of 400,000 Btu/h or 

less. Of these pool heaters, all models exceed the Federal standard. The pool heaters rated 

at input capacities above 400,000 Btu/h are typically not marketed for residential use. Thermal Efficiency (percent)

3-44 

EE-2006-STD-0129 and EERE-2006-BT-STD-0129 COMMENT 32.2
3.3 TECHNOLOGY ASSESSMENT 

The purpose of the technology assessment is to develop a preliminary list of 

technology options manufacturers can use to improve the efficiency of residential water 

heaters, direct heating equipment, and pool heaters. The following assessment provides 

descriptions of those technology options that apply to all product classes. 

In preparation for the screening and engineering analyses, DOE identified several 

possible technology options and examined the most common efficiency-improving 

technologies used today. These technology options will provide a deeper understanding 

of the technological improvements used to increase the energy efficiency of residential 

water heaters, direct heating equipment, and pool heaters. 

3.3.1 Baseline Equipment Components and Operation 

The baseline models serve as reference point for each product class against which 

it can measure changes resulting from energy conservation standards. DOE defines the 

baseline model in each product class as a product having an efficiency that just meets the 

existing Federal energy conservation standards. DOE also defines baseline models as 

having commonly available features. 

3.3.1.1 Baseline Residential Water Heaters 

Gas-Fired Storage Water Heaters 

The baseline gas-fired storage water heater is a water heater that incorporates a 

complete gas-fired water heating system in an individual package. Each baseline gasfired water heater consists of a glass-lined corrosion-resistant steel tank, insulation 

surrounding the top and sides of the tank, a dip tube that directs cold entering water to the 

bottom of the tank, a hot water outlet pipe, heat traps, a gas burner, a standing pilot 

ignition, a combustion chamber, a burner control thermostat, a gas valve, a sacrificial 

anode, a flue within the water tank, a baffle-type heat exchanger within the flue, a 

temperature and pressure-relief valve, an outer case, and packaging for shipment. 

Manufacturers may differentiate gas-fired water heaters by efficiency rating, input to 

burners, and storage capacity. 

Oil-Fired Storage Water Heaters 

The baseline oil-fired storage water heater is a water heater that incorporates a 

complete oil-fired water heating system in an individual package. Each baseline oil-fired 

water heater consists of a glass-lined corrosion-resistant steel tank, insulation surrounding 

the top and side of the tank, a dip tube that directs cold entering water to the bottom of 

the tank, a hot water outlet pipe, a combustion chamber, a sacrificial anode, a flue within 

the water tank, a baffle-type heat exchanger within the flue, an oil-fired power burner 

system, a burner control thermostat, a temperature and pressure-relief valve, an outer 

case, and packaging for shipment. Manufacturers may differentiate oil-fired water heaters 

by efficiency rating, input to burners, and storage capacity. 

3-45 

EE-2006-STD-0129 and EERE-2006-BT-STD-0129 COMMENT 32.2
Electric Storage Water Heater 

The baseline electric storage water heater is a water heater that incorporates a 

complete electric powered water heating system in an individual package. Each baseline 

electric water heater consists of a glass-lined corrosion-resistant steel tank, insulation 

surrounding the top and side of the tank, a dip tube that directs cold entering water to the 

bottom of the tank, a hot water outlet pipe, heat traps, electric resistive heating elements, 

a control thermostat and wire harness, a sacrificial anode, a temperature and pressurerelief valve, an outer case, and packaging for shipment. Manufacturers may differentiate 

electric water heaters by efficiency rating, input to the heating elements, and storage 

capacity. 

Instantaneous Gas-Fired Water Heaters 

The baseline instantaneous gas-fired water heater is a water heater that 

incorporates a complete instantaneous gas-fired water heating system in an individual 

package. Each baseline instantaneous gas-fired water heater consists of a cold water inlet, 

a hot water outlet, a combustion chamber, a heat exchanger, a burner, a vent, a standing 

pilot ignition, a flow detection device, a gas valve, a burner control thermostat, an outer 

case, and packaging for shipment. Manufacturers may differentiate instantaneous gasfired water heaters by efficiency rating and input to the burners. 

3.3.1.2 Baseline Direct Heating Equipment 

Gas Wall Fan Type 

The gas wall fan-type heater is a heater that incorporates a complete gas heating 

system in an individual package. Each baseline gas wall fan-type heater consists of a heat 

exchanger, a room air circulation blower, a standing pilot ignition system, a burner, a 

pilot light sensing control valve, a combustion chamber, a flue, an intake, a burner control 

thermostat, an outer case, and packaging for shipment. Manufacturers may differentiate 

gas wall fan-type heaters by efficiency rating and input rating. 

Gas Wall Gravity Type 

The gas wall gravity-type heater is a heater that incorporates a complete gas 

heating system in an individual package. Each baseline gas wall gravity-type heater 

consists of a heat exchanger, a standing pilot ignition system, a burner, a pilot light 

sensing control valve, a combustion chamber, a flue, an intake, a burner control 

thermostat, an outer case, and packaging for shipment. Manufacturers may differentiate 

gas wall gravity-type heaters by efficiency rating and input rating. 

Gas Floor Type 

The gas floor-type heater is a heater that incorporates a complete gas heating 

system in an individual package. Each baseline gas floor-type heater consists of a heat 

exchanger, a standing pilot ignition system, a burner, a pilot light sensing control valve, a 

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combustion chamber, a flue, an intake, a burner control thermostat, a floor grate, an outer 

case, and packaging for shipment. Manufacturers may differentiate gas floor-type heaters 

by efficiency rating and input rating. 

Gas Room 

The gas room-type heater is a heater that incorporates a complete gas heating 

system in an individual package. Each baseline gas room-type heater consists of a heat 

exchanger, a standing pilot ignition system, a burner, a pilot light sensing control valve, a 

combustion chamber, a flue, an intake, a burner control thermostat, an outer case, and 

packaging for shipment. Manufacturers may differentiate gas room-type heaters by 

efficiency rating and input rating. Manufacturers may also differentiate by outer case. 

Room heaters can be packaged as console and hearth-type heaters. 

3.3.1.3 Baseline Pool Heaters 

A gas-fired pool heater incorporates a complete pool heating system in an 

individual package. Each baseline gas pool heater consists of a cold water inlet pipe, a 

hot water outlet pipe, a heat exchanger, a standing pilot ignition system, a burner, a pilot 

light sensing control valve, a combustion chamber, a flue/vent, an air intake, a burner 

control thermostat, an outer case, and packaging for shipment. Manufacturers may 

differentiate gas-fired pool heaters by efficiency rating or input rating. 

3.3.2 Technology Options 

3.3.2.1 Water Heaters 

DOE identified the following technology options as having the potential to 

improve the efficiency of water heaters: 

1. Heat traps 

2. Insulation improvements 

3. Power vent (gas-fired and oil-fired only) 

4. Heat exchanger improvements 

5. Flue damper (electromechanical) 

6. Side arm heater 

7. Electronic (or interrupted) ignition 

8. Heat pump water heater (electric only) 

9. CO2 heat pump water heater 

10. Flue damper (buoyancy operated) 

11. Directly fired 

12. Condensing 

13. Condensing pulse combustion 

14. Thermophotovoltaic and thermoelectric generators 

15. Reduced burner size (slow recovery) 

16. Timer control 

17. Two-phase thermosiphon (TPTS) 

18. Modulating controls 

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19. Intelligent controls 

20. Self-cleaning. 

3.3.2.1.1 Heat Traps (Oil-Fired) 

Residential water heaters lose heat by conduction and convection through the 

fittings (water pipes, drain valve, pressure relief valve, and thermostat), which contributes 

to standby losses. A heat trap is a device or arrangement of piping that keeps the buoyant 

hot water from circulating to the piping distribution system by natural convection, which 

leads to heat loss through uninsulated pipes to the surroundings. When there is no draw of 

hot water, a heat trap prevents water in the hot water outlet line from getting back into the 

tank as it cools off, and prevents hot water in the tank from circulating back into the cold 

water inlet line. Thus, by containing hot water in storage tanks, heat traps minimize 

standby loss. These devices can be integral to tank design or independently attached to 

inlet and outlet pipes during installation at the site. Insulating its exposed portion can 

increase the effectiveness of a heat trap. Multiple manufacturers include heat traps on 

their water heater models. 

Conventional heat traps come in two styles. In the first style, a floating plastic ball 

blocks the cold water inlet. The buoyancy of the plastic holds it in place until water is 

drawn. The force of water is strong enough to push the ball out of the way as water enters 

the tank. 

The second style is used for the hot water outlet. In this heat trap, the ball is 

denser than water, and the weight of the ball seals the outlet until hot water is drawn and 

the water pressure lifts it out of the way. A small bypass channel is left for water to 

escape back into the inlet line from the tank as it expands after a large draw fills the tank 

with cold water. Heat traps could also be of metallic design. Manufacturing costs appear 

to be roughly comparable between metal and plastic heat traps, but plastic heat traps are 

considerably more effective in reducing water heater standby losses. 

Other heat trap designs have also been produced. These include U-shaped pipes, 

flexible seals, flaps, springs, and other mechanisms. 

3.3.2.1.2 Insulation Improvements (Gas-Fired, Oil-Fired, Electric Storage) 

Improvements to reduce standby losses can be accomplished by modifying water 

heater tank insulation. Increasing the thermal resistivity of the water heater jacket to 

reduce the amount of heat loss during standby periods increases the water heater energy 

factor. 

Improved insulation can be achieved by modifying the baseline design of the 

standard gas-fired storage water heater using (1) increased jacket insulation, (2) a plastic 

tank, (3) an insulated tank bottom (electric only), (4) advanced forms of insulation, and 

(5) foam insulation. 

Increased Jacket Insulation. Manufacturers insulate gas-fired, electric, and oilfired storage water heaters by filling the cavity between the jacket and the tank (top and 

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sides) with insulation. Most storage water heaters on the market today have at least 1-

inch thick insulation; some models have 2- or 3-inch thick insulation. Increasing the 

diameter of the jacket insulation will reduce standby losses by increasing the thermal 

resistivity of the water heater jacket. Jacket losses represent a majority of the standby 

losses. Some manufacturers produce water heaters with increased insulation. Aftermarket 

insulating blankets are also commercially available to increase water heater insulation. 

Plastic Tank (electric only). Plastic water heater storage tanks can be constructed 

using a seamless, blow-molded polybutylene inner tank with a filament-wound fiberglass 

outer tank. A second method consists of constructing a thin steel shell with an internal 

plastic tank. The steel exterior is constructed first; then, plastic powder is injected into the 

shell, and the tank is rotated in a furnace to coat the interior with the plastic. The steel 

exterior serves as the primary structural support for the tank. The lower heat conductivity 

of plastic compared to metal reduces the amount of heat conducted through the tank wall 

to the insulation and to the feed-throughs. However, the plastic tank cannot be used with 

standard center-flue gas-fired storage water heaters or with oil-fired storage water heaters 

because the plastic cannot withstand the high temperatures produced by the flames. 

Insulated Tank Bottom (electric only). Insulated tank bottoms increase water 

heater efficiency by reducing standby losses. The standard water heater tank is not 

insulated on the bottom, where water temperature is lowest. However, the tank bottom is 

still conductive; therefore, adding insulation will reduce heat dissipation through the 

bottom of the tank. 

Advanced Forms of Insulation. Alternate ways of reducing the jacket losses 

without increasing the diameter of gas-fired, electric, and oil-fired storage water heaters 

include using advanced insulation materials or evacuated panels. Some of the advanced 

materials or methods of insulation considered here involve using vacuum insulation, inert 

gases, aerogel insulation, or partial vacuums. 

Vacuum Insulation. A “hard” vacuum between internal reflective surfaces 

is a very good insulator. It has been used for years in Thermos bottles and Dewar 

tanks for cryogenic applications. Durability and the difficulty of maintaining the 

seal over the life of the storage water heater are some manufacturing problems 

that have to be resolved. 

Gas-filled Panels. Gas-filled panels are thermal insulating devices that 

retain a high concentration of a low-conductivity gas at atmospheric pressure 

within a multilayer infrared reflective baffle. The thermal performance of the 

panels depends on the type of gas fill and the baffle configuration. Gas-filled 

panels are flexible and self-supporting, and can be made in a variety of shapes and 

sizes to thoroughly fill most types of cavities. This technology has not been 

47 demonstrated for water heater applications. 

Aerogel Insulation. An example of advanced insulation materials is silica 

aerogel, which is composed of 96 percent air and 4 percent silicon dioxide. 

Aerogels are more efficient and weigh less than the polyurethane foam that is 

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currently used in most water heaters. The R-value of the aerogel at atmospheric 

pressure is comparable to that of the polyurethane foam, but when 90 percent of 

the air is evacuated from a plastic-sealed aerogel packet, its resistance nearly 

triples. Another advantage of aerogel insulation over foam insulation is avoiding 

the use of chlorofluorocarbons to blow the polyurethane foam into the heater 

jacket. New manufacturing processes have been developed that can produce 

flexible blankets or clamshell forms of this material. The aerogel material is 

vulnerable to shock and vibration, however, and material handling is an issue. 

Because the aerogel is hygroscopic, it also requires a thorough sealing of the 

cavity between the water heater tank and the outside cover. The material has not 

been demonstrated for use with water heaters. 

Evacuated Panels. Other materials with a lightweight open structure can 

provide effective insulation combined with “soft” or low vacuums. The materials 

can be enclosed with metals or plastic. A vacuum is drawn in this panel before 

sealing, and a lightweight, rigid foam keeps the vacuum from compressing the 

panel. This technology has not been demonstrated for storage water heater 

applications. 

Foam Insulation. Foam insulation can be used as an alternative to fiberglass 

insulation. Chlorofluorocarbon-free, water-blown polyurethane foam is a common 

alternative to high-density fiberglass blankets. Incorporating foam insulation of the same 

thickness in place of fiberglass insulation can increase overall efficiency of the storagetype water heater. Foam typically has an R-value up to two to three times greater than 

fiberglass. Additionally, foam can be blown into the cavity between the tank and the 

outer case and does not need to be cut to form as required by some fiberglass installation 

methods. This facilitates the filling of small spaces and constrictive geometries where the 

potential for heat loss still exists, and would otherwise be difficult to fill with fiberglass 

batts. Finally, manufacturing processes that use foam-blowing techniques are better 

suited for production line changes due to the shape-conforming characteristics of the 

foam. This allows additional technology options, methods, and advances to be 

incorporated into current designs with only minimal impacts on insulation installation 

techniques. 

3.3.2.1.3 Power Vent (Gas-Fired and Oil-Fired Storage) 

The power vent technology option can increase the recovery efficiency, 

depending on the specific set-up of the technology. Power vents can be designed either as 

induced or forced draft systems. An induced draft fan is installed downstream of the draft 

diverter in the venting system and pulls flue gases through the flue. A forced draft fan is 

upstream of the combustion chamber and supplies the correct fuel-to-air ratio for 

combustion. Both methods improve efficiency by increasing turbulence in the flue gases. 

Typically, this technology is incorporated with a flue baffle that has a more 

restricted flow path. Induced and forced draft fans are capable of transmitting air through 

the restricted flue baffle, where a natural venting system would not be possible. This 

restriction of air flow increases mixing, which increases heat transfer, thermal efficiency, 

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and recovery efficiency. When recovery efficiencies reach above 80 percent, 

condensation of flue gases is likely. Water heaters obtaining recovery efficiencies above 

80 percent should include methods to properly dispose of condensate and be made of 

materials that resist corrosion caused by condensate. 

In addition to an increase in efficiency, there is also a reduction in standby loss. 

The restrictions created by the stationary blower installed in either the intake or flue paths 

reduce the off-cycle standby loss. The blowers act like dampers. 

Some manufacturers make water heaters with induced draft fans that, in addition 

to pulling the combustion products through the water heater, also draw excess air into the 

flue gases before venting. This is similar to a vent hood used in natural venting 

applications. Adding ambient air cools flue gases leaving the water heater to a low 

enough temperature so that standard plastic piping can be used for venting. This 

eliminates any problems with metal vent pipe corrosion. Plastic piping is often cheaper 

and easier to install than sheet metal or masonry chimneys. 

3.3.2.1.4 Heat Exchanger Improvements (Gas-Fired, Oil-Fired Storage, and 

Instantaneous) 

Improvements of heat transfer from the flue gases to the water can be 

accomplished by improving the characteristics of the flue baffle or heat exchanger. The 

improved heat transfer leads to an increase in the thermal efficiency of the water heater. 

If the thermal efficiency is increased to about 84 percent, condensation of the flue gases 

begins to occur in the flue or vent pipe. Condensation may cause the surfaces of the flue 

and vent pipe to corrode. To avoid such problems, materials that resist corrosion and 

methods to properly collect and dispose of condensate are incorporated into water heat 

designs. 

An improved heat exchanger can be achieved by modifying the baseline design of 

the standard gas-fired storage water heater using (1) increased heat exchanger surface 

area, (2) an improved flue baffle, (3) a submerged combustion chamber, (4) multiple 

flues, (5) alternative flue geometry (helical), or (6) a u-tube flue. These approaches can 

increase recovery efficiency sufficiently, but may also cause condensation (and hence 

corrosion) to occur in venting systems. 

Increased Heat Exchanger Surface Area. The baseline design consists of a 

vertical flue located in the center of the gas-fired or oil-fired storage water heater tank. 

This design can be improved by increasing the surface area of the flue, which increases 

the amount of heat transfer and thermal efficiency. One way to accomplish this is by 

increasing the diameter of the flue. The overall tank diameter would need to be increased 

to maintain consistent volume. Tank height could also be increased to maintain the same 

volume, which would also add surface area to the flue. The flue baffle would most likely 

require modification in order to maintain the same amount of air flow restriction. 

Enhanced Flue Baffle. The standard flue baffle of a gas-fired and oil-fired storage 

water heater is a twisted strip of metal inserted into the flue that increases the turbulence 

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of flue gases and improves heat transfer to the walls of the flue. The geometry of the flue 

baffle can be modified to increase its effectiveness. Improving the flue baffle so that air 

flow becomes more restricted and more turbulent can increase the amount of heat 

transfer, which increases the thermal efficiency. The baffle can be improved by 

increasing the length of the path that the flue gases travel and by including more turns in 

the flue gas path. This can be accomplished by including fins or some other form of 

extrusion from the flue wall, or by increasing the number of flow altering features in the 

baffle, which is typically constructed from a flat piece of sheet metal and inserted into the 

flue. These methods to enhance the flue baffle, which increase air flow restriction and 

turbulence, may also result in an increased surface area, which also increases heat 

transfer. Enhanced flue baffle technology can also reduce standby losses. Enhancements 

to the flue baffle typically create restrictions to the air flow, which decreases convective 

heat loss during standby periods. 

Submerged Combustion Chamber. The combustion chamber in a standard gasfired and oil-fired storage water heater is below the water tank, and the bottom of the tank 

(below the burners) is seldom insulated. Therefore, the water heater loses heat from 

below the tank. The sides and bottom of the combustion chamber are not surrounded by 

water. By inserting the combustion chamber into the storage tank, more of the 

combustion energy can be recovered. Standby losses are reduced somewhat because of 

restrictions on air flow through the combustion chamber and flue. 

Multiple Flues. The multiple flue design uses several smaller flues in place of one 

large central flue in the middle of the storage tank. The increased surface area for heat 

exchange between the flue gases and the water in the tank yields an increase in recovery 

efficiency. 

Alternative Flue Geometry (helical). This technology option is most often 

associated with condensing gas-fired storage water heaters, and is also applicable to oilfired storage water heaters. The technology incorporates both a helical or spiraling flue 

and a u-tube flue. This technology contributes to increased efficiency in two distinct 

ways. The surface area of the flue is increased, since it runs a helical path considerably 

longer than the height of the water tank, increasing heat transfer during steady-state 

operations. Also, when the burner is not operating, the multiple turns in the flue resists 

heat convection out of the flue, reducing standby losses. Directing the flue downward 

with a “U” shape allows the forming condensate to drain from the water heater flue 

properly. The flue usually exits the sidewall of the water heater. Safety concerns exist due 

to the corrosive and acidic nature of the flue gas condensate, and corrosion-resistant 

materials are used to mitigate this damage. 

U-tube. A u-tube flue for a gas-fired and oil-fired storage water heater is a flue 

shaped like an inverted “U” within the water heater tank. This shape contributes to 

increased efficiency in two distinct ways. The surface area of the flue is increased, it runs 

twice the height of the water tank, increasing heat transfer during steady-state operation. 

This effect is similar to the increased heat exchanger surface area technology option. 

When the burner is not operating, the inverted u-shaped flue resists heat convection out 

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of the flue, reducing standby losses. This effect is similar to the flue damper technology 

options. 

Direct Vent. Another method to increase surface area includes a secondary heat 

exchanger. Combustion gases exiting through the vent are used to preheat incoming air 

before it passes through the primary heat exchanger. Manufacturers currently produce 

instantaneous water heaters that accomplish this by running the inlet and exhaust vents 

concentrically. This venting configuration is known as direct-vent. This set-up is similar 

to a shell-in-tube heat exchanger. 

Manufacturers currently produce water heaters with heat exchanger improvement 

technologies. 

3.3.2.1.5 Flue Damper (Electromechanical) (Gas-Fired Storage) 

Gas-fired storage water heaters are typically equipped with a draft hood 

connecting the flue pipes to a vent pipe or chimney. During off-cycle, the water heater 

loses heat by natural convection and conduction through the vent pipe or chimney. A 

damper can be installed either at the flue exit or in the vent pipe to minimize the off-cycle 

heat losses. A flue damper is installed upstream of the draft diverter, while the vent 

damper is installed downstream of the draft diverter. 

Electric flue dampers are activated by an external source of electricity. The 

dampers open when combustion starts and close immediately after combustion stops. 

Therefore, there is a greater reduction in off-cycle losses compared to buoyancy-activated 

dampers. When the damper reaches the open position, an interlock switch energizes the 

solenoid and enables the gas ignition circuit. Therefore, the burner cannot be ignited 

when the damper is in the closed position. Because the dampers open and close 

immediately, no bypass is needed. However, a knockout is provided to vent the flue gases 

from a standing pilot. The electric flue damper needs an electric hookup and consumes 

power when the gas supply is off. 

Flue and vent dampers have no effect on the steady-state performance of the 

water heater. However, flue and vent dampers can reduce standby losses of gas-fired 

storage water heaters, yielding improved energy efficiency. Flue dampers are used on 

some commercial water heaters. 

3.3.2.1.6 Side Arm Heater (Gas-Fired, Oil-Fired Storage) 

The side arm heater technology option for gas-fired and oil-fired storage water 

heaters avoids large flue losses by removing the flue from the center of the storage tank. 

Water is withdrawn from the bottom of the tank and heated over a burner in a small, 

separate heat exchanger and returned to the top of the tank. A small circulation pump 

moves water through the heat exchanger when the burner is on. The burner could have 

electronic ignition, which would reduce the pilot light losses. Auxiliary power is supplied 

by a low-voltage transformer, which is fed by a standard 120 volt wall connection. Water 

heaters using this design are not currently on the market. 

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3.3.2.1.7 Electronic (or Interrupted) Ignition (Gas-Fired, Oil-Fired Storage 

and Instantaneous) 

The most commonly used ignition system in gas-fired and oil-fired storage water 

heaters and instantaneous water heaters is a standing pilot ignition system. The 

disadvantage of these water heaters is that they burn gas continuously at a rate of about 

1000 Btu/hr, and only part of this heat is converted to useful energy. As an alternative to 

standing pilots, three electronic ignition devices are sometimes used in gas-fired and oilfired storage water heater and instantaneous water heater products: 

Intermittent Pilot Ignition. This is a device that lights a pilot by generating a 

spark, which in turn lights the main burner. 

Intermittent Direct Ignition. This system lights the main burner directly by 

generating a spark. 

Hot Surface Ignition. This system lights the main burner directly via a sufficiently 

hot surface. 

Hydroelectric ignition is another form of electronic ignition used in gas-fired 

products, particularly instantaneous water heaters. However, it is not as common as the 

three forms of ignitions above. For hydroelectric systems, a small turbine is spun by 

flowing water to produce electricity, which ignites a pilot. This is similar to intermittent 

pilot ignition. 

Unlike standing pilot ignition systems that consume gas continuously, 

hydroelectric devices operate only at the beginning of each on-period. Although there is 

no increase in the steady-state efficiency with the use of electronic ignition devices, the 

overall fuel consumption is reduced. Burner on-time may increase, however, to make up 

for the heat the standing pilot would have supplied during standby periods. 

The “interrupted ignition” system for an oil-fired burner activates the spark only 

until a steady flame is established. This differs from “intermittent ignition” for oil-fired 

burners, where the energy source is activated during the entire burner operating cycle. 

The oil consumption is not affected by interrupted ignition, nor is there an improvement 

in the recovery efficiency of the water heater. However, this technology option not only 

reduces the igniter’s electricity consumption, but also reduces its maintenance costs 

because the electrodes do not have to be replaced as often. In addition to changes in 

controls, the igniter can be made from solid-state electronics, instead of an iron core 

transformer. This improves performance and also reduces power consumption. 

Manufacturers produce water heaters with electronic ignition. 

3.3.2.1.8 Heat Pump Water Heater (Electric Storage) 

A heat pump water heater represents a merging of two otherwise unrelated 

technologies: an electric resistance storage water heater with tank and controls, and a 

refrigeration circuit similar to that found in a residential air-conditioner. Heat pump water 

heaters use existing heat pump technology to extract heat from the surroundings for use 

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in heating stored water. For electric water heaters, this is an alternative to resistive 

heating. Heat pump water heaters transfer heat from air, typically at room temperature, to 

water at a higher temperature. The heated water can then be used to provide the 

residential hot water supply. Since heat does not naturally transfer from a low 

temperature to a higher temperature, a mechanical system consisting primarily of a closed 

refrigeration loop containing a refrigerant vapor compressor, an evaporator (a type of 

heat exchanger), a condenser (another heat exchanger), and an expansion device is used 

to transfer the heat. The working fluid in the loop, the refrigerant, extracts heat from the 

surrounding air. Typically, the evaporator captures heat from the ambient air, and the 

condenser delivers this heat to the water inside of a storage tank. The pump and 

expansion device facilitate pressure and phase changes to allow for these heat transfer 

processes. 

When used continuously, typical heat pumps appear to heat water at roughly two 

and a half to three times the rate of energy input (in the form of electricity). In practice, 

actual tested residential heat pump water heater designs typically yield energy factors 

48 from approximately 1.0 to 3.0, while a baseline electric storage water heater has an 

energy factor of 0.90. An energy factor range exists because of variations in design and 

ambient conditions. For example, differences in piping between the heat pump and 

storage tank, efficiencies of the individual components of the heat pump loop, and 

storage tank characteristics affect EF. 

It should be noted that most U.S. homes are heated for substantial portions of the 

year, and operating a heat pump water heater typically extracts heat from the household 

air and increases the load on the home heating system during these periods. Energy 

factors for heat pump water heaters, or any water heaters, do not consider home heating 

loads. For this reason, accounting for the net energy or energy cost impact of the heat 

pump water heater requires analyzing the energy cost impact on the entire house, not just 

the electrical energy input to the water heater. 

There are two basic designs for residential heat pump water heaters: add-on and 

integral. An add-on heat pump water heater is designed to be added to a separately 

manufactured storage tank, often a standard electric resistance water heater. A small 

pump circulates water from the tank through the heat pump. The heat pump and storage 

tank are combined in the field during installation. The second type of heat pump water 

heater is an integral heat pump water heater. In an integral design, the heat exchanger 

(condenser) is combined with the storage tank design during the manufacturing process. 

This eliminates the need for a circulation pump and increases efficiency. Both heat pump 

configurations typically supplement resistive, or traditional electric, storage water heaters 

where the elements operate only when the demand for hot water is greater than what the 

heat pump can supply. 

Both designs have a refrigeration subsystem composed of at least an expansion 

device, evaporator, compressor, and a fan (to force air over the evaporator and enhance 

heat transfer). The refrigerant condenser, also part of the refrigeration loop, can be 

located with the rest of the subsystem as a separate unit (as is done with the add-on-type 

heat pump water heater), or be located integral to the tank as with the integral heat pump 

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water heater design. In the add-on heat pump water heater, cold water is removed from 

the tank, heated, and pumped back into the tank. In the integral design, the heat pump 

compressor moves refrigerant from the condenser coil to the evaporator coil. The 

condenser coil is typically located either inside the tank or wrapped around the tanks 

exterior ( .e., between the tank wall and the insulation). The evaporator coil is typically 

housed on top of the tank along with the remaining heat pump components. The 

compressor, evaporator coil, and evaporator fan mounted on top of the storage tank will 

add approximately 12 inches to the height of a traditional electric water heater tank. 

Regardless of design, the expansion device, evaporator, fan, and compressor must be 

located outside the tank. In the add-on design, components can be mounted on top of the 

tank or as a completely separate unit that can be placed on the floor or mounted on the 

wall. For higher efficiencies, the add-on heat pump water heater should be placed 

relatively close to the tank. As the unit is placed farther from the tank, the water heating 

efficiency degrades due to piping losses, predominantly the result of warm water left in 

the piping between on-cycles that results in heat transfer to the surroundings. 

The heat pump water heater also produces condensate at the evaporator coil 

during operation. Like all refrigeration devices, the temperature of the evaporator coil 

must be cold to extract heat from the surrounding air. When air blows across the coil, 

moisture in the air is condensed to liquid. The amount of liquid produced is a function of 

the humidity in the air blown across the coil, the temperature of the evaporator coil, and 

the hot water load. Locating the heat pump in the conditioned space of a residence does 

not eliminate all the condensate buildup unless the air conditioning system can be 

counted on to dehumidify all house air to a dew point below the coil temperature. 

Therefore, condensate drains are typically required to remove condensation that collects 

as a result of operation. A pump may also be needed to move condensate to a drain. 

Another component that is incorporated in most residential heat pump water 

heater designs is electric resistance heating elements. These are needed because the 

heating capacity of the refrigeration system is limited due to the cost and space 

considerations of residential heat pump water heaters. Typical heat pump water heaters 

have between 40 percent and 80 percent of the heating capacity of typical electric 

resistance storage water heaters. To compensate for this reduced heating capacity and 

allow faster water heating and shorter recovery periods for the heat pump water heater 

during periods of high use, electric resistance heaters are employed that can heat the 

water in the tank faster than the heat pump unit. Larger capacity heat pump systems can 

be constructed, but the cost of larger systems generally outweighs the energy efficiency 

benefits to the average consumer. Additionally, removing large amounts of heat from a 

conditioned space during high use periods with a larger system may create unfavorable 

conditions in a residence. Instead, practical systems are designed to heat water gradually 

using the higher efficiency heat pump, but can, when required by the heating load, use a 

higher capacity electric resistance backup. 

Finally, the space in which the heat pump water heater is located must be large to 

provide adequate air flow and must provide ready access for regular air filter changes on 

the heat pump evaporator coil. The refrigeration subsystem of a heat pump water heater 

needs sufficient flow of warm air across the evaporator coils to serve as a heat source. 

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Without this heat source, the heat pump cannot function and must revert to electric 

resistance operation. Operation in heat pump mode will generally require on the order of 

100 cubic feet per minute or more of warm air. Multiple manufacturers produce heat 

pump water heaters. Multiple manufacturers produce heat pump water heaters, conduct 

heat pump research, and develop prototype designs. 

3.3.2.1.9 Carbon Dioxide (CO2) Heat Pump Water Heater (Electric Storage) 

CO2 heat pump water heaters are similar to the aforementioned heat pump water 

heater technology. This technology uses carbon dioxide as a natural refrigerant to transfer 

heat from the surrounding air to the water stored in the tank through a heat pump loop. 

Current products and prototypes can achieve coefficients of performance as high as 3.0, 

which result in EFs ranging from approximately 1.0 to 3.0. This range accounts for 

differences in ambient air conditions, storage tank efficiency, and efficiencies of the 

components that make up the heat pump loop. Additionally, products are capable of 

functioning in cold weather without freezing pipes or frosting evaporators on outdoor 

installations. Typically, this technology is installed outdoors due to the size of 

components. Typical installations include a separately packaged heat pump and a 

separately packaged storage unit consisting of two tanks and supporting hardware. CO2 

heat pump water heaters also take advantage of load shifting strategies by heating water 

at night and storing it for use during the day. Products are predominantly available 

outside of U.S. markets where products have been made available by government subsidy 

50 rebate programs. 

3.3.2.1.10 Flue Damper (Buoyancy Operated) (Gas-Fired Storage) 

This flue damper is a small, very lightweight aluminum dome-shaped poppet that 

slides up and down in an enclosure placed at the top of the flue of gas-fired water heaters. 

The buoyancy of the combustion products lifts the poppet, allowing flue gases to enter 

the venting system. 

This technology option would reduce off-cycle standby losses by sealing the flue 

and preventing convection to the venting system, but would have no effect on recovery 

efficiency because it does not affect the rate of heat transfer. This flue damper may not 

work with high recovery efficiency water heaters because there may not be enough waste 

heat in the combustion products to provide sufficient buoyancy to lift the poppet. 

The safety standard51 for gas water heaters requires the burner to shut off if the 

flue gets blocked for some reason. Thus, the effects of a failure of the flue damper to 

open should be mitigated by the burner controls. 

3.3.2.1.11 Directly Fired (Gas-Fired, Oil-Fired Storage) 

In this technology option, water is sprayed through a series of baffles above the 

burner of gas-fired and oil-fired storage water heaters. Burner flame and flue products are 

in direct contact with the water, which is re-pressurized by a circulating pump and 

returned to the storage tank. The direct contact process allows for more efficient heat 

transfer than conventional shell-and-tube gas-fired and oil-fired storage water heaters 

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because the heat resistive barrier between the water and the flue products is eliminated. 

However, direct contact with flue products can lead to contamination of the domestic 

water. This can potentially cause health and safety problems for end users. This 

technology option can also cause conflict with local and uniform plumbing codes (e.g., 

International Association of Plumbing and Mechanical Officials (IAPMO) 1991) with 

respect to water quality. 

3.3.2.1.12 Condensing (Gas-Fired, Oil-Fired Storage and Instantaneous) 

Energy efficiency of gas-fired and oil-fired storage and instantaneous water 

heaters can be increased by extracting more heat from the flue gases. More energy can be 

extracted by condensing the combustion products in the flue gas, which extracts more 

heat in the form of latent energy, leading to an increase in the thermal efficiency of the 

gas-fired and oil-fired storage and instantaneous water heater. Water heater technology 

options or a combination of technology options can be added to a water heater design to 

condense the combustion gases. 

The flue-gas condensate is often acidic and corrosive. Therefore, special 

corrosion-resistant heat exchangers and vent linings are required for safe and reliable 

operation of the water heater. Corrosion due to condensation of combustion gases limits 

the thermal efficiency of a fuel-fired water heater with a standard flue and vent system. 

Using corrosion-resistant heat exchangers or sidewall venting, and lining the 

vent/masonry systems with corrosion-resistant material can extend the thermal efficiency. 

Condensing gas appliances can be of two types: fully-condensing and nearcondensing. Fully condensing appliances have flue gas temperatures less than the dew 

point (130oF to 140oF) of the flue products. Condensation is expected in both the heat 

exchanger and the vent system. Near-condensing appliances have flue gas temperatures 

approaching the dew point of the flue gases, but still greater than the dew point. 

Condensation is expected in the vent system but not in the heat exchangers. The thermal 

efficiency of fully condensing water heaters can be as high as 99 percent. For nearcondensing water heaters, thermal efficiency is generally between 84 and 90 percent. 

Manufacturers produce residential and commercial condensing water heaters. 

3.3.2.1.13 Condensing Pulse Combustion (Gas-Fired, Oil-Fired Storage and 

Instantaneous) 

Pulse combustion burners for gas-fired and oil-fired storage and instantaneous 

water heaters are another condensing technology. Pulse combustion burners operate on 

self-sustaining resonating pressure waves that alternately rarefy the combustion chamber 

(drawing a fresh fuel/air mixture into the chamber) and pressurize it (causing ignition by 

compression heating of the mixture to its flash point). This process is initiated by a 

blower supplying an initial fuel and air mixture to the combustion chamber. The mixture 

is ignited with a spark. Once resonance is initiated, the process becomes self-sustaining. 

Pulse combustion systems feature high heat transfer rates, are capable of selfventing, and can draw outside air for combustion even when installed inside. Because the 

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pulse combustion process is highly efficient, the burners are generally used with 

condensing appliances. 

3.3.2.1.14 Thermophotovoltaic and Thermoelectric Generators (Gas-Fired, OilFired Storage and Instantaneous) 

Heat and light energy can be extracted from the combustion process of gas-fired 

and oil-fired storage and instantaneous water heaters and converted into useful electrical 

energy. Thermophotovoltaic generator technology uses a special light-emitting burner 

coupled with silicon photovoltaic cells that generate auxiliary power that can run a fan, 

operate the electronic ignition and controls, and charge a battery. This avoids the 

requirement of an auxiliary electrical supply, while offering the efficiency advantages of 

electronic ignition and forced-draft combustion. 

Another method of generating electricity at the water heater is based on 

thermoelectric technology. Thermoelectric generators use semiconductors to convert a 

temperature differential into a voltage source. This voltage source can provide power to 

run a fan, operate the electronic ignition and controls, and charge a battery, similar to the 

thermophotovoltaic generator. Thermoelectric generators are available, but none have 

been used to generate auxiliary power for water heaters. 

3.3.2.1.15 Reduced Burner Size (Slow Recovery) (Gas-Fired, Oil-Fired Storage 

and Instantaneous) 

Reducing burner size for gas-fired and oil-fired storage and instantaneous water 

heaters while keeping flue baffle and tank geometry the same will increase the ratio of 

heat transfer surface area to energy input, thereby increasing the recovery efficiency. The 

lower energy input means that recovery would be slower than with conventional burners. 

3.3.2.1.16 Timer Control (Electric Storage) 

This technology option limits the time of day when the elements of an electric 

storage water heater may be energized. This is most often used as part of an electric 

utility demand-side management program for load shifting (“demand avoidance 

strategy”). Energy savings are possible because the water in the tank remains at a reduced 

temperature for part of the day. However, the actual energy savings will depend on the 

end-use profile, lifestyle of the consumer, and a basic desire to save energy. Savings will 

be greater for water heaters where standby loss levels are high. These savings are 

achieved because the electric consumption, in response to the standby losses, is shifted 

from on-peak to off-peak times where electricity costs less. 

Aftermarket timer controls for water heaters are commercially available. Some 

utilities also offer load-shifting controls for water heaters to reduce peak daytime 

demand. 

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3.3.2.1.17 Two-Phase Thermosiphon (TPTS) (Gas-Fired, Oil-Fired Storage) 

TPTS technology removes the flue from the center of gas-fired and oil-fired 

storage water heaters and places a heat exchanger external to the storage tank, reducing 

standby losses. This is similar to the side-arm heater technology option. TPTSs are heatpipe mechanisms that transfer heat from the external burner to the storage tank. The 

TPTS is a closed loop device consisting of an evaporator, in which the working fluid 

(water) is heated by the burner, percolating liquid and vapor into the condenser where 

heat is transferred into the water storage tank. At the condenser, which is inside the 

storage tank, the vaporized working fluid is condensed and drains back through a separate 

restricted tube to the evaporator, where it is reheated. The restriction prevents the heated 

vapor and liquid from flowing to the condenser through the return path. During off-cycle, 

there is very little heat transfer through the TPTS system. This reduces standby losses to 

levels similar to those of electric water heaters. 

3.3.2.1.18 Modulating Controls (Instantaneous) 

Modulating controls within an instantaneous water heater can reduce energy 

consumption, improve efficiency, and improve overall performance by changing the 

operating conditions in response to household demand. Basic controls (i.e., those without 

modulation) operate at either the minimum or the maximum output levels, based on 

simple inputs from either the user or the water heater. Alternatively, modulating controls 

can reduce output so that excess energy is not wasted when only small temperature 

differentials or low flow rates need to be satisfied. By modulating the controls, the 

demand can be met more precisely by the appropriate outputs. For example, a control will 

not open fully to correct a small differential; rather, the control will modulate to a lower, 

or stepped, position so that excess energy is not wasted. An added benefit to modulation 

is the elimination of stacking, the effect of overheating due to a succession of short hot 

water draws. Stacking can lead to scalding and other safety issues. Finally, duty cycling 

can be reduced, which can reduce the total amount of energy consumed. Several 

manufacturers currently include modulating controls in instantaneous water heaters. 

3.3.2.1.19 Intelligent Controls (Gas-Fired, Oil-Fired, Electric Storage, and 

Instantaneous) 

Intelligent controls, self diagnostics, and electronic controls for storage and 

instantaneous water heaters minimize energy consumption and maximize hot water 

output. Monitoring functions typically operate to minimize operating cost while still 

meeting household demand. This can be achieved by tracking usage patterns and 

adjusting water heater operations to maximize efficiency. Also, water heaters may 

employ economizer modes to limit the maximum temperature so that energy 

consumption is reduced. Smart vacation settings operate to minimize energy usage while 

maintaining temperatures above freezing. Diagnostic software may also maintain the 

optimal burner conditions, valve positions, and air-to-fuel ratios to maximize efficiency, 

for example. Several storage- and instantaneous-type water heaters incorporate 

intelligent, self-diagnostic and electronic controls. 

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3.3.2.1.20 Self-Cleaning (Gas-Fired, Oil-Fired, Electric Storage) 

This technology option for storage water heaters is a modification of the 

conventional dip tube associated with the baseline storage water heater. Water exits a 

conventional dip tube with a weak diffusing action. Self-cleaning technology 

incorporates a method to introduce the inlet water at high turbulence. This is 

accomplished by modifying the exit orifice at the end of the dip tube to increase the inlet 

velocity of the water and create a spray pattern. Designs may also incorporate orifices 

along the length of the dip tube. These introduce inlet water at various points within the 

tank to increase mixing and overall tank turbulence. Further designs may turn the flow 

path of the inlet water to a horizontal angle to increase the amount of swirling, or 

rotational turbulence. This can be accomplished by simply bending the dip tube. 

The benefit that accompanies this technology is a self-cleaning feature. However, 

this does not contribute to an increase in energy efficiency as measured by the DOE test 

procedure. By introducing the inlet water at higher velocities and with turbulence, 

naturally occurring sediment in the water is forced to remain in suspension. Therefore, 

the sediment can be drawn out of the tank when there is a call for hot water, instead of 

settling to the bottom. If long standby periods occur, the dip tube is designed to unseat 

any settled particles so that they can be withdrawn from the tank. This prevents the 

formation of permanent deposits, which degrade heat transfer. Deposits decrease water 

heater performance, can cause leaks, and reduce tank volume. 

3.3.2.2 Direct Heating Equipment 

The following technology options were identified that could potentially improve 

the efficiency of direct heating equipment: 

1. Heat exchanger improvements 

2. Electronic ignition 

3. Thermal vent damper 

4. Electrical vent damper 

5. Power burner 

6. Induced draft 

7. Two stage and modulating operation 

8. Improved fan or blower motor efficiency 

9. Increased insulation (floor furnaces only) 

10. Condensing 

11. Condensing pulse combustion 

12. Air circulation fan 

13. Sealed combustion 

3.3.2.2.1 Heat Exchanger Improvements (Fan Wall, Gravity Wall, Floor, 

Room) 

Improvements to heat transfer from the combustion gases to the air can be 

accomplished by improving the characteristics of the heat exchanger for fan wall, gravity 

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wall, floor, and room heaters. The improved heat transfer leads to an increase in the 

thermal efficiency and AFUE of direct heating equipment. If the AFUE is increased to 

about 90 percent, condensation of the combustion gases begins to occur in the heat 

exchanger or vent pipe. Condensation typically occurs when the combustion gases are 

cooled to approximately 130 oF. Condensation may cause corrosion to the surfaces of the 

heat exchanger and vent pipe. To avoid such problems, materials that resist corrosion and 

methods to properly collect and dispose of condensate are incorporated into direct heating 

equipment designs. If a means to manage condensate are not included in the design, then 

the use of this technology option will be limited to an AFUE below 90 percent to avoid 

damage. 

The technology option of improved heat exchanger can be achieved by modifying 

baseline designs of standard gas-fired direct heating equipment using (1) increased heat 

exchanger surface area, (2) multiple flues, (3) multiple turns in flue, (4) direct vent, and 

(5) increased heat transfer coefficient. 

Increased Heat Exchanger Surface Area. The performance of the heat exchanger 

can be improved by simply increasing its surface area, which increases the amount of 

heat transfer occurring in the direct heating equipment. This, in turn, improves the direct 

heating equipments’ capability of extracting heat from combustion gases. The result is an 

increase in the steady-state efficiency of the unit, and thus, the AFUE. 

Multiple Flues. Heat exchanger surface area can also be increased by 

incorporating a multiple flue design. The heat exchanger heats room air by passing it 

through multiple tubes instead of a single tube. One manufacturer incorporates 15 tubes 

to increase the surface area and increase the rate of heat transfer. 

Multiple Turns in Flue. This technology increases heat exchanger surface area by 

including multiple turns in the flue pipe. Overall dimensions of the outer case do not 

necessarily need to increase to accommodate a longer flue path. The longer flue path 

increases heat exchanger surface area, which increases steady-state efficiency and AFUE 

of the unit. One manufacturer incorporates turns in a heat exchanger to increase surface 

area and AFUE. 

Direct Vent. Another method to increase surface area includes a secondary heat 

exchanger. Combustion gases exiting through the vent are used to preheat incoming air 

before it passes through the primary heat exchanger. Manufacturers currently produce 

direct heating equipment that accomplishes this by running the inlet and exhaust vents 

concentrically. These units are known as direct-vent heaters. This set up is similar to a 

shell-in-tube heat exchanger. 

Increased Heat Transfer Coefficient. An alternative to increasing the size of the 

heat exchanger is enhancing the inside and outside heat transfer coefficients of the heat 

exchanger. This can be accomplished by modifying the surface of the heat exchanger 

material for the purpose of increasing turbulence in the air passing close to the 

exchanger’s surface, for example. Incorporating dimples or some other form of surface 

feature to enhance turbulence can increase the heat transfer coefficient when correctly 

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designed. Also, the heat exchanger may be constructed of a material with a higher 

thermal conductivity than the standard copper that is typically used. 

3.3.2.2.2 Electronic Ignition (Fan Wall, Gravity Wall, Floor, Room) 

All gravity-type heaters and the majority of fan-type heaters are equipped with a 

standing pilot ignition system. In direct heating equipment, standing pilots continuously 

burn gas. The efficiency of the fan wall, gravity wall, floor, and room heater can be 

improved by simply replacing the standing pilot ignition system with an electronic one, 

such as an intermittent pilot system or a hot surface ignition system. In either case, the 

need for the standing pilot is eliminated. 

In assessing the impact on energy consumption, it is important to account for the 

added electrical energy consumption of the electronic ignition device in addition to the 

reduction in gas energy consumption that results from eliminating the standing pilot. 

The two standing pilot ignition systems for gravity heaters, hydraulic and 

millivolt, do not require an outside source of electricity to operate. Consequently, these 

gas valves are more complex and more costly than those of an ignition system requiring a 

separate power source. For both the hydraulic and millivolt systems, the small amount of 

electricity that is required by the gas valve and thermostat is generated by either a 

thermocouple or thermopile. The thermocouple or thermopile draws its power from the 

burning pilot, and only a small fraction of the heat energy is converted to electricity. The 

pilot burns at approximately 775 Btu/hr constantly, and the electrical power typically 

required is only around 1 Watt, or 3.5 Btu/hr. The remaining heat is lost or transferred to 

the room (even when there is no call for heating). 

For fan wall furnaces that already require an outside source of electricity to 

operate the fan, the electronic ignition system is powered off the fan power supply. The 

power draw of the fan power supply transformer occurs continuously. For direct heating 

equipment that does not already require electricity, a means to supply power must be 

included in the design. 

Both types of electronic ignition devices considered above, hot surface and 

intermittent pilot, require an outside source of electricity to operate their components. 

The gas valve for each electronic ignition system typically only consumes power during a 

call for heat. The control module, which houses the electronic circuitry required to 

control the entire ignition system, typically only consumes power during a call for heat. 

Finally, the electronic thermostat draws power either when heat is or is not being called 

for. These power requirements in total are typically less than the pilot burn rate. 

Manufacturers currently produce direct heating equipment with electronic ignition. 

3.3.2.2.3 Thermal Vent Damper (Fan Wall, Gravity Wall, Floor, Room) 

Vent dampers are installed between the draft hood and the vent pipe of fan wall, 

gravity wall, floor, and room heaters. Vent dampers improve efficiency by primarily 

reducing both off-cycle infiltration and off-cycle sensible heat losses. Vent dampers have 

no affect on steady-state efficiency because they do not improve heat transfer. 

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Thermal vent dampers are activated by a pair of bi-metal coil springs. Heat 

created by combustion gases cause the two coil springs to contract and open the damper 

blade. Conversely, the springs cool and expand to close the damper after heating 

discontinues. Response time to open and close the damper varies and may be slow 

because the bi-metal coil spring does not heat up or cool down instantaneously. Thermal 

vent dampers can be installed on units using either a standing pilot or an electronic 

ignition system. In their closed position, thermal vent dampers allow some bypass to 

ensure that during start up combustion gases will not be trapped within the heat 

exchanger. The bypass also allows flue gases from a standing pilot to be vented. As a 

result of the addition of a bypass, the reduction in off-cycle losses can be reduced because 

the damper is only partially closed. 

Combustion products must maintain a certain amount of heat in order to expand 

the bi-metal coil springs of the thermal vent damper. If all heat is transferred to a room by 

a high efficiency heater and a non-effective amount remains in the combustion gases on 

contact with the thermal vent damper, there will not be enough heat to open it. 

3.3.2.2.4 Electrical Vent Damper (Fan Wall, Gravity Wall, Floor, Room) 

In direct heating equipment, vent dampers are installed between the draft hood 

and the vent pipe of fan wall, gravity wall, floor, and room heaters. Vent dampers 

improve efficiency by primarily reducing both off-cycle infiltration and off-cycle sensible 

heat losses. Vent dampers have no affect on steady-state efficiency. Vent dampers have 

no affect on steady-state efficiency because they do not improve heat transfer. 

Electrical vent dampers are operated by an outside source of electricity. Sensors 

indicate when the burner is off allowing for fast closure of the damper. Because of this, 

there is a greater reduction in off-cycle losses compared to thermally activated vent 

dampers. Electric vent dampers are designed with safety interlocks to prevent burner 

operation when the damper is in other than a fully open position. Unlike thermal 

dampers, electric dampers do not allow for bypass since they can open immediately upon 

burner operation, except when standing pilot ignition is employed. When standing pilots 

are in use, a knockout is provided on the damper allowing standing pilot combustion 

gases to be vented when the damper is fully closed. 

Safety concerns do exist. A power failure may cause the electrical damper to 

remain closed and not cycle open while the heater operates to meet heating demands. 

This issue is mitigated, however, by including safety interlocks that only allow operation 

of the burner when the damper is in the open position. Also, a spring return actuator that 

fails to the open position can be used. When the electric vent damper experiences a power 

loss, a spring forces the damper to the open position. 

Electrical dampers require an electrical connection, but only a nominal amount of 

power during opening and closing. Spring return dampers, if installed, only require a 

nominal amount of power as well. Power is required while opening and holding closed 

during standby periods (to overcome the return spring). 

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3.3.2.2.5 Power Burner (Fan Wall, Gravity Wall, Floor, Room) 

Fan-assisted combustion systems for fan wall, gravity wall, floor, and room 

heaters can be designed with power burner technology. Power burners use blowers 

upstream of the combustion zone to supply a more efficient fuel-air mixture to the burner. 

Power burners also reduce off-cycle losses by restricting air flow and convection of warm 

air to the vent system, similar to a vent or combustion box damper. 

The accompanying steady-state efficiency will also increase resulting from 

increasing the amount of primary air to the burner. This is accomplished without further 

design modifications to the heater. Because the power burner can be designed to 

overcome relatively large pressure drops within the heat exchanger, further increases in 

steady-state efficiency can be attained by redesigning the heat exchanger system. The 

heat exchanger can be designed to be more compact with more restrictions so that more 

heat can be extracted from the combustion gases. As efficiency increases, condensation 

of combustion gases within the vent system becomes more likely. Condensation of 

combustion gases should be avoided unless the system is specifically designed to be fully 

condensing direct heating equipment. 

3.3.2.2.6 Induced Draft (Fan Wall, Gravity Wall, Floor, Room) 

Fan-assisted combustion systems for fan wall, gravity wall, floor, and room 

heaters can be designed with induced draft technology. Induced draft fans are located 

downstream of the combustion zone (at the exit of the heat exchanger) and regulate the 

amount of primary air at the burner resulting in a higher combustion efficiency. Induced 

draft systems also reduce off-cycle losses. Since induced draft fans are located at the exit 

of the heat exchanger, they tend to reduce off-cycle infiltration losses more than power 

burners. The induced draft fan essentially acts as a vent damper to prevent heated room 

air from being drawn into the vent system. 

The space allocated for the draft hood is large enough to accommodate an induced 

draft fan. The induced draft fan could also be located anywhere along the length of the 

vent pipe as long as a draft can be maintained. Some installations may even incorporate a 

fan in the vent cap at the end of the venting system. Besides increasing AFUE, the 

steady-state efficiency will also increase because of the increasing amount of primary air 

to the burner. This increase is accomplished without further design modifications to the 

heater. Because the induced draft fan can be designed to overcome relatively large 

pressure drops within the heat exchanger, further increases in steady-state efficiency can 

be attained by redesigning the induced draft heat exchanger system. The heat exchanger 

can be redesigned to be more compact with more restrictions so that a greater amount of 

heat can be extracted from the flue gases. As efficiency increases, condensation of 

combustion gases within the vent system becomes likely. Condensation of combustion 

gases should be avoided unless the system is specifically designed to be fully condensing 

direct heating equipment. 

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3.3.2.2.7 Two Stage and Modulating Operation (Fan Wall, Gravity Wall, 

Floor, Room) 

Two-stage or modulating operation allows fan wall, gravity wall, floor, and room 

heaters to meet heating load requirements more precisely. When low heating load 

conditions exist, the heater has the capability to operate at a reduced burner rate. This 

reduces cycling of the unit, which in turn, reduces large fluctuations in room temperature. 

Two-stage or modulating burners attempt to reduce cycling of the heater by 

reducing the flow rate of gas at lower heating loads. Two-stage or modulating burners, 

which are currently manufactured, regulate the gas flow but not the air flow. Excess air is 

induced at lower gas flow rates resulting in lower combustion efficiencies when 

compared to a normal or maximum gas flow rate. Because of this, heaters equipped with 

two-stage or modulating burners will always have a lower energy efficiency, as measured 

by the DOE test procedure, than heaters equipped with single-stage burners. 

In order to overcome this lower efficiency and achieve efficient two-stage or 

modulating operation, a two-stage or modulating burner must be incorporated into an 

induced draft or forced draft system that uses a two-speed or variable speed combustion 

fan. With the multi-speed combustion fan, the excess air drawn into the burner at low gas 

flow rates can be reduced so that there is no decrease in the steady-state efficiency of the 

heater. Similarly, on forced-air two-stage and modulating direct heaters, the aircirculation fan must also be capable of two-stage or variable speed operation in order to 

avoid a similar decrease in energy efficiency. 

3.3.2.2.8 Improved Fan or Blower Motor Efficiency (Fan Wall) 

For fan wall heaters equipped with air circulation fans, the fan or blower motor 

efficiency can be increased to reduce the electrical energy consumption of the unit. 

Typical fan motor sizes are 1/20 horse power. Since the motor is so small, 

increases in efficiency would yield extremely small electrical energy savings. Presently, 

direct heating manufacturers are believed to use permanent split capacitor (PSC) fan 

motors. The next jump in motor efficiency would be to use a permanent magnet brushless 

DC (BLDC) motor. A brushless DC motor uses electronic controls to commutate the 

motor, eliminating brush friction and losses, and therefore increasing motor efficiency. 

BLDC motors also have longer lifetimes than electric motors containing brushes. 

3.3.2.2.9 Increased Insulation (Floor) 

Floor furnaces are the only heater types that are installed directly within an 

unconditioned space. Floor furnaces are typically installed where the majority of the unit 

is below the subfloor of the first floor and in the crawlspace of a home. Therefore, DOE 

considered increasing or improving the insulation of a heater only for this product class 

of DHE. Since room heaters and wall furnaces are installed within the conditioned space, 

insulation within the cabinet would only serve to minimize cabinet hot spots and reduce 

the amount of radiated heat coming off the heater. Additionally, the DOE test procedure 

calls for the measurement of jacket losses only for floor furnaces. Increased or improved 

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insulation would reduce the jacket losses of this type of DHE and increase the overall 

AFUE. The installation of insulation in a floor furnace is at the perimeter of the cabinet. 

3.3.2.2.10 Condensing (Fan Wall, Gravity Wall, Floor, Room) 

If fan wall, gravity wall, floor, and room heaters are designed to have high steadystate efficiencies, enough heat will be extracted from the combustion gases so that 

condensing occurs within the heat exchangers. This type of heater is typically termed a 

condensing heater and AFUEs generally exceed 90 percent. One typical condensing 

design uses a high efficiency fan-assisted combustion system with additional heat 

exchanger surface area. 

As mentioned previously in the discussion of the power burner or induced draft 

technology option, this heater system can be designed to achieve high efficiencies. In the 

power burner or induced draft technology option description, condensation of the 

combustion gases within the vent system was not desired. Since condensation is now 

desired, the fan-assisted system is designed to extract as much heat as possible from the 

combustion gases. Typically, condensing systems exhaust their combustion gases through 

a direct-vent. Positive pressure can be maintained within the vent system to exhaust the 

low temperature combustion gases with a fan installed upstream of the combustion zone. 

Conversely, negative pressure can be maintain within the vent system to draw 

combustion gases from the combustion chamber with a fan installed downstream of the 

combustion zone. The combustion gases can be passed through a larger or improved heat 

exchanger to extract as much heat as possible. Condensing systems require some means 

to collect and drain the condensate that develops within the heat exchangers. Condensing 

systems can be designed to use secondary heat exchangers and air circulation fans as 

well. 

3.3.2.2.11 Condensing Pulse Combustion (Fan Wall, Gravity Wall, Floor, 

Room) 

If a fan wall, gravity wall, floor, or room heater is designed to have a high steadystate efficiency, enough heat will be extracted from the flue gases so that condensing 

occurs within the heat exchanger. This type of heater is typically termed a condensing 

heater and AFUEs generally exceed 90 percent. One typical condensing design uses pulse 

combustion with additional heat exchanger area. 

As mentioned in the discussion of the power burner and induced draft technology 

option, the heater system can be designed to achieve high efficiencies. In the power 

burner or induced draft technology option description, condensation of the combustion 

gases within the vent system was not desired due to the corrosive nature of the 

condensate. However, in order to achieve high AFUEs, enough heat must be extracted 

from the combustion gases to the point where combustion gases condense. Condensing 

pulse combustion is designed to extract as much heat as possible from the combustion 

gases. Pulse combustion systems, like a direct-vent type heater, draw combustion air 

from the outside. Once ignition is accomplished, the pulse combustion process is selfsustaining. The turbulent nature of the pulse combustion process requires no mechanical 

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devices (e.g., induced draft fans or power burners) to vent the combustion products to the 

outside atmosphere. Pulse combustion designs may use a secondary heat exchanger and 

an air circulation fan to increase steady-state efficiency. The secondary heat exchanger is 

usually located at the forced air blower outlet and before the combustion air enters the 

combustion chamber. Part of the efficiency gain comes from capturing the heat of 

vaporization of the combustion gases before they are expelled to the outside. Combustion 

gases condense because the temperature of the vented gases falls to about 130 °F. A 

condensate drain is needed to route the condensed moisture into a floor drain. 

3.3.2.2.12 Air Circulation Fan (Floor, Room) 

Air circulation fans improve the steady-state efficiency of floor and room heaters 

by circulating air in a counter-current mode to the flow of combustion products. In 

gravity-type heaters, room air circulates co-current with the combustion products, driven 

only by the thermal buoyant forces. Counter-current heat exchangers are inherently more 

efficient than co-flowing types. In addition, the higher air flow rates that occur in forcedair heaters result in higher heat transfer coefficients than for gravity-type heaters. 

AFUE increases due to air circulation fans are due solely from improving the 

steady-state efficiency of the heater. This technology option is only considered for room 

heaters and floor furnaces. Air circulation fans are known to be easily incorporated into 

currently available room heater models as manufacturers already provide consumers with 

the option of purchasing fans for these units. Though floor furnaces do not currently have 

the option of adding a circulation fan, DOE believes the cabinet is large enough to 

incorporate a fan without having to enlarge the cabinet. 

3.3.2.2.13 Sealed Combustion (Fan Wall, Gravity Wall, Floor, Room) 

Fan wall, gravity wall, floor, and room heaters that pull air from the conditioned 

space to use for the combustion process waste heat. Removing energy in the form of 

heated air and exhausting it outside of the conditioned space is inherently less efficient 

than drawing outside air for the combustion process. Fan wall, gravity wall, floor, and 

room direct heating equipment having sealed combustion chambers prevents heat 

rejection from occurring. Using outside air for heating ensures that air within the 

conditioned space is not used for combustion. 

Non-sealed combustion heaters induce negative pressure during operation, unlike 

sealed combustion heaters that do not induce any pressure. When air is exhausted from a 

conditioned space the removed air must be replaced in order to satisfy the induced 

pressure differential. This happens naturally by infiltration, or leaking, of cool outside air 

into the conditioned space. Sealed combustion does not contribute to exchanges of air 

between the interior conditioned spaces and exterior unconditioned spaces. 

Finally, sealed combustion provides inherent safety benefits. Sealing the 

combustion process prevents harmful combustion gases from mixing and accumulating in 

the conditioned space. Combustion products are exhausted outside of the space. 

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EE-2006-STD-0129 and EERE-2006-BT-STD-0129 COMMENT 32.2
3.3.2.3 Pool Heaters 

The following technology options could improve the efficiency of pool heaters: 

1. Electronic ignition 

2. Improved heat exchanger design 

3. More effective insulation (combustion chamber) 

4. Power venting 

5. Sealed combustion 

6. Condensing pulse combustion 

7. Condensing 

3.3.2.3.1 Electronic Ignition 

One of the most common ways to reduce energy consumption by pool heaters is 

to eliminate the standing pilot light as a method of igniting the main burner. Pool heater 

manufacturers already make heaters with electronic ignition and many different 

variations in models are available. This technology has been well represented in the 

market. For example, since February 1984, California has required that pool heaters not 

have standing pilot lights, but instead use electronic ignition. Three electronic ignition 

devices are used in gas-fired pool heaters: 

Intermittent Pilot Ignition. This is a device that lights a pilot by generating a 

spark, which in turn lights the main burner. 

Intermittent Direct Ignition. This system lights the main burner directly by 

generating a spark. 

Hot Surface Ignition. This system lights the main burner directly from a 

sufficiently hot surface. 

Unlike standing pilot ignition systems that consume gas continuously, these 

devices operate only at the beginning of each on-period. Although there is no increase in 

the steady-state efficiency when using electronic ignition devices, the overall fuel 

consumption is reduced. Pool heater pilot lights typically consume approximately 1,100 

Btu/hr on average. 

3.3.2.3.2 Improved Heat Exchanger Design 

Pool heaters are currently capable of reaching the steady-state efficiency level 

where potentially damaging condensation will start to form on the heat exchanger. A 

small increase in heat exchanger size may be possible, without causing condensation of 

the combustion gases, by increasing the heat exchanger surface area. The burner 

configuration might also require adjustment. No blower would be required for this 

technology option, however. 

The heat exchanger can also be increased while preventing condensation from 

forming by using a governor. The governor maintains pool water temperature and water 

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flow so that condensation of combustion gases does not occur. The governor limits the 

efficiency of the heat exchanger so that the latent heat of the combustion gases is not 

transferred to the pool water. DOE is aware of a manufacturer making a pool heater with 

a condensing governor. 

If condensation is desired to achieve a high steady-state efficiency, then the pool 

heater design must properly manage and dispose of the potentially damaging condensate. 

This can be accomplished with corrosion-resistant materials and a condensate drain. 

3.3.2.3.3 More Effective Insulation (Combustion Chamber) 

Combustion chambers for pool heaters are insulated with fiberglass blankets to 

prevent heat loss through the walls of the combustion chamber to the exterior of the pool 

heater. Manufacturers reduce the amount of heat loss to increase the thermal efficiency 

by using materials with more effective insulation properties. Manufacturers of pool 

heaters currently produce products that use Fiberfrax panels and refractory tiles to reduce 

the amount of heat loss through the combustion chamber walls. By lining the sides and 

bottom of the heat exchanger with these materials, manufacturers increase the amount of 

heat that is transferred from the combustion chamber to the heat exchanger. DOE 

identified several manufacturers that use insulation that is more effective than fiberglass 

blankets for pool heater combustion chambers. 

3.3.2.3.4 Power Venting 

Fan-assisted combustion systems for pool heaters can be designed with power 

venting technology. Induced draft fans located downstream of the combustion zone (at 

the exit of the heat exchanger), or forced draft fans located upstream of the combustion 

zone (at the entrance to the combustion chamber) regulate the amount of primary air at 

the burner resulting in a higher combustion efficiency. 

To increase the energy efficiency, a larger heat exchanger surface area (which 

increases the heat transfer rate) is required with this technology. The larger heat 

exchanger typically increases the amount of restriction to the air flow path and the 

combustion gases are typically not buoyant enough to provide adequate draft. Therefore, 

the power vent forces combustion gases through the restricted heat exchanger area. 

Forcing the air increases turbulence and this increases the rate of heat transfer, which in 

turn increases steady-state efficiency and energy efficiency. Configuration of other parts 

of the pool heater, such as the combustion chamber and burner, can remain constant with 

the inclusion of this technology option. Additional alterations of the heat exchanger may 

be needed, however, if condensing occurs, which can corrode the heat exchanger. 

3.3.2.3.5 Sealed Combustion 

Pool heater combustion processes require a regulated ratio of fuel to air in order to 

be efficient. The primary air for the combustion chamber must be supplied at a constant 

rate without any fluctuations. To maintain a specific supply of primary air, manufacturers 

seal the combustion chamber of the pool heater. Manufacturers produce pool heaters with 

seal combustion chambers and air intakes that operate at consistent energy efficiency 

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levels regardless of outside conditions. Pool heaters, particularly those installed outdoors, 

without seal combustion chambers are susceptible to reductions in thermal efficiency if 

high wind conditions exist. Pressure and air flow variations caused by ambient conditions 

can vary the amount of primary air supplied to the burners, which can reduce the burner 

efficiency. Several manufacturers produce pool heaters with sealed combustion 

chambers. 

3.3.2.3.6 Condensing Pulse Combustion 

To increase the energy efficiency of a pool heater, the water vapor in the 

combustion gases must be condensed in order to capture the heat of vaporization. 

Alterations of the heat exchanger are necessary for condensing operations to prevent 

condensate from corroding the heat exchanger. A condensate drain is also required. 

Condensing can be accomplished by using pulse combustion burners. Pulse 

combustion burners operate with self-sustaining resonating pressure waves that 

alternately ratify the combustion chamber (causing a fresh fuel/air mixture to enter the 

chamber) and pressurize it (causing ignition by compression of the mixture to its flash 

point). This process is initiated by a blower that supplies the initial fuel and air mixture to 

the chamber. The fuel and air mixture is ignited with a spark igniter. Once resonation is 

established, the process becomes self-sustaining. Pulse combustion systems feature high 

heat transfer rates through the heat exchanger due to increased turbulence of combustion 

gases. High-efficiency gas-fired boilers using pulse combustion are currently available. 

3.3.2.3.7 Condensing 

To increase the efficiency of a pool heater, the water vapor in the combustion 

gases must be condensed in order to capture the heat of vaporization. Alterations of the 

heat exchanger are necessary for condensing operations to prevent condensate from 

corroding the heat exchanger. A condensate drain is also required. 

This technology option uses a radiant burner, a modified heat exchanger to 

condense the combustion gases, and a burner located above the heat exchanger to prevent 

its corrosion due to contact with condensate. A ceramic matrix radiant burner is located 

above a series of finned heat exchanger tubes. A blower forces an air and gas mixture 

through the ceramic matrix burner and down past the heat exchanger. Most of the heat is 

radiated to the heat exchanger. By locating the burner above the heat exchanger and out 

of the way of any condensation, the burner does not require corrosion protection. The 

heat exchanger must still be corrosion-resistant, however, and a condensate drain must be 

installed. 

3.3.3 Technologies that Do Not Affect Energy Efficiency as Measured 

DOE reviewed the technologies presented in the previous assessment and 

considered their impacts on DOE’s test procedure results in addition to their impacts on 

energy use. Since EF, AFUE, and thermal efficiency are the relevant performance metrics 

in the present rulemaking analyses, technologies having no effect on or do not increase 

EF, AFUE, and thermal efficiency are not beneficial in the rulemaking context. 

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Of the technologies presented in the previous section, DOE removed several 

technologies from consideration as a result before conducting the screening analysis. 

Although these technologies were not considered in the analyses, DOE does not 

discourage manufacturers from using them because they may potentially reduce annual 

energy consumption. DOE provided an explanation of why these technologies do not 

affect EF, AFUE, or thermal efficiency. 

3.3.3.1 Water Heaters 

The following technology options have no effect on or do not increase the EF of 

residential water heaters: timer controls, self-cleaning, intelligent controls, and 

modulating controls. 

3.3.3.1.1 Timer Controls (Electric) 

Timer controls affect the time of day when the elements of an electric storage 

water heater may be energized. This feature has the potential to reduce energy use 

52 because the water in the tank remains at a reduced temperature for part of the day. 

These savings are achieved because the electric consumption, in response to the standby 

losses, is shifted from on-peak to off-peak times when electricity costs less. 

However, the DOE test procedure for electric storage water heaters does not show 

the affects of timer controls, because the test specifies normal operation for the water 

heater during the entire testing period. Additionally, this technology affects the energy 

consumption pattern of the water heater and not energy efficiency because load is shifted, 

not reduced. The typical use of the average consumer is specified by the test procedure, 

and time of day and conditions of an electrical supply grid (on-peak or off-peak) are not 

factors. Although this technology can reduce peak energy demand and reduce overall 

energy costs to the consumer throughout the year, it does not increase EF under the DOE 

test procedure for electric storage water heaters because of the specified test conditions. 

Therefore, DOE does not consider timer controls as a technology for improving EF of 

electric storage water heaters. 

3.3.3.1.2 Self Cleaning (Gas, Oil, Electric Storage) 

Self-cleaning incorporates a method to introduce the inlet water at high 

turbulence, so that the sediment occurring naturally in the water remains in suspension 

and does not settle to the bottom of the tank. Additionally, a self-cleaning dip tube 

unseats sediment that accumulates during long standby periods. Tank cleaning does not 

improve EF as measured by the DOE test procedures. The DOE test procedure to 

determine EF is 24 hours, and testing immediately follows manufacture. Sediment build 

up can reduce EF over the life of the water heater, but in a 24-hour period the amount of 

build up that could occur, if any, would not be enough to affect the test results. This 

technology facilitates the removal of deposits, which can build up over the life of a water 

heater, which is typically 9 to 15 years. Deposits decrease water heater performance, 

reduce tank volume, and can cause leaks. Self-cleaning improves tank life and reduces 

the required maintenance, but these are not determinants for EF. DOE does not consider 

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EE-2006-STD-0129 and EERE-2006-BT-STD-0129 COMMENT 32.2
self-cleaning as a technology for improving EF of electric, gas, or oil storage water 

heaters. 

3.3.3.1.3 Intelligent Controls (Gas, Oil, Electric Storage) 

Intelligent controls and self-diagnostics minimize energy consumption and 

maximize hot water output. Several storage and instantaneous type water heaters 

currently on the market include self-diagnostics and electronic controls. Typically, 

varying the temperature of the heated water based on the household demand minimizes 

energy consumption. However, the DOE test procedure has a set draw pattern and usage 

for the water heater, and specifies an inlet and outlet temperature for the water. As a 

result of these specifications, there is no opportunity for varying temperatures to affect 

the EF calculation. Consequently, DOE does not consider intelligent controls as a 

technology for improving EF of electric storage, gas storage, and gas instantaneous water 

heaters. 

3.3.3.1.4 Modulating Controls (Instantaneous) 

Modulating water heater controls can reduce energy consumption, improve 

energy efficiency, and improve overall performance by changing the operating conditions 

in response to household demand. Modulating controls can also reduce output so that 

excess energy is not wasted when only small temperature differentials or low flow rates 

need to be satisfied. Although modulating controls can increase energy efficiency over a 

broad operating range, they do not affect EF as measured by the DOE test procedure. Due 

to the specified test conditions, (i.e. no variability in demand or delivery) there is no 

opportunity for varying operating conditions to affect the EF calculation. Therefore, DOE 

does not consider modulating controls as a technology for improving EF of instantaneous 

water heaters. 

3.3.3.2 Direct Heating Equipment 

DOE has not identified any technologies that do not effect or do not increase 

AFUE for residential direct heating equipment as measured by DOE’s test procedure. 

3.3.3.3 Pool Heaters 

The following technology options have no effect on or do not increase the thermal 

efficiency of residential pool heaters: electronic ignition. 

3.3.3.3.1 Electronic Ignition 

Electronic ignition (intermittent pilot, intermittent direct, and hot surface ignition) 

reduces the energy consumption of gas-fired pool heaters by eliminating the standing 

pilot. Pool heater pilot lights burn continuously with a burn rate ranging from 1,000 Btu/h 

to 2,000 Btu/h during the pool heater operating season. Electronic ignition only uses 

energy when there is a call for heating and only until a flame has been established. 

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EE-2006-STD-0129 and EERE-2006-BT-STD-0129 COMMENT 32.2
Electronic ignition can be used to replace the standing pilot and reduce the overall 

energy consumption of the pool heater. However, the thermal efficiency descriptor 

specified by EPCA, and measured by DOE’s test procedure, does not take into account 

the energy efficiency benefits of ignition sources that are alternatives to standing pilots 

(e.g., electronic ignition). The thermal efficiency descriptor, as measured by the DOE test 

procedure, does not account for additional energy consumption of a continuous, standing 

pilot light when the burner is off because it is a steady-state test procedure and thermal 

efficiency is determined when the burner is on. That is, thermal efficiency only captures 

energy efficiency impacts that affect combustion and the transfer of energy to the water. 

The thermal efficiency descriptor does not account for any energy that a pool heater may 

use in the standby period. Therefore, standards expressed in terms of this descriptor 

cannot require use of such alternative ignition sources or capture the full energy savings 

benefit of their use. Therefore, DOE does not consider electronic ignition as a technology 

for improving thermal efficiency for pool heaters. 

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