How the New Department of Energy Standards Will Accelerate the Adoption of Heat Pump Water Heaters

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In 2029, a new Department of Energy (DOE) standard will require most electric storage water heaters to use heat pump technology, marking a significant shift for the industry.

This move will lead to increased heat pump water heater (HPWH) installations and more opportunities for trained installers. The DOE anticipates annual HPWH units shipped to rise from 141,000 in 2022 to 3 million after 2029.

In the Northwest, HPWHs are already gaining traction: currently, these efficient units represent 18% of electric water heater sales in the region, compared to just 3% nationally.

Key Takeaways from the Ruling

  • The majority of electric storage water heaters will need to be heat pumps by 2029. In addition to increasing the market share for HPWHs, this will likely drive manufacturer innovation—leading to even more efficient and user-friendly products.
  • For gas water heaters, efficiency improvements of 8% to 16% will be required, with no major changes in venting or outlet requirements.
  • Gas instantaneous water heaters were not included in this DOE rule. A separate ruling with updated standards is expected to be issued later.
  • The DOE estimates the rule will save $124 billion in consumer energy costs over 30 years and lower the upfront costs of HPWHs.


Read the Federal Standard Fact Sheet (PDF)

Why This Matters

As manufacturers introduce new products that comply with the standard and costs stabilize, HPWHs will be more accessible to consumers than ever. According to estimates, the market share for HPWHs is expected to grow to 61% with this new rule, creating a surge in demand for experienced installers.

Additionally, interest in HPWHs is increasing as consumers become more aware of their benefits —including $550 average annual savings, a 10-year warranty, smart features like leak detection and vacation mode, and lower greenhouse gas emissions—and can take advantage of local utility incentives and the federal tax credit.

Get Ready Before 2029

Installers who get ahead of the curve by becoming knowledgeable about HPWHs and incorporating them into their work will gain a clear competitive advantage. They'll be well-positioned to meet consumer demand for HPWHs.

Enroll in Hot Water Solutions’ on-demand training now to learn more about how you can grow your business by offering HPWHs to your customers.

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