Determining Benefits and Costs of Improved Water Heater Efficiencies

Economic impacts on individual consumers from possible revisions to U.S. residential water heater energy-efficiency standards are examined using a life-cycle cost (LCC) analysis. LCC is the consumer's cost of purchasing and installing a water heater and operating it over its lifetime. This approach makes it possible to evaluate the economic impacts on individual consumers from the revised standards. The methodology allows an examination of groups of the population which benefit or lose from suggested efficiency standards. The results show that the economic benefits to consumers are significant. At the efficiency level examined in this paper, 35% of households with electric water heaters experience LCC savings, with an average savings of $106, while 4% show LCC losses, with an average loss of $40 compared to a pre-standard LCC average of $2,565. The remainder of the population (61%) are largely unaffected.