Projected National Economic and Energy Savings from Water Heater Efficiency Standards in the U.S.

In April 2000, the U.S. Department of Energy (DOE) proposed an amended energy efficiency standard for residential water heaters. This paper presents an analysis of economic and energy savings which were used to determine the proposal. Cumulative energy savings over the period from 2003 to 2030 is forecast by calculating national water heater consumption for several trial standard levels in comparison to the base case forecast. The key component to this calculation is a detailed projection of water heater shipments and remaining stock. The shipments model takes as input baseline efficiencies and equipment costs corresponding to a series of design options. It calculates the average unit energy consumption based on efficiency market shares with and without standards. It then uses appliance lifetimes and an accounting of stock by vintage to determine when older, less efficient water heaters will be retired and replaced by new ones that conform to standards. In addition, it tracks units shipped to newly constructed housing. The outputs of the shipments model are energy consumption and equipment cost for each year in the forecast period. Using the output of the shipments model, the National Energy Savings (NES) model determines the total source energy savings and net present value (NPV) of each trial standard level. Net savings for each year are the difference between total operating cost savings and total equipment cost increases. Future savings are discounted to the present. The proposed standard is expected to save 4.8 EJ (exajoules) of primary energy between 2003 and 2030. Financial benefits to consumers are estimated to be $3.3 billion during this time.