ATLANTA — The Department of Energy had certain ideas and goals in mind in April 2010 when it amended its water heater efficiency standards that take effect in April 2015. What DOE thought, and the way manufacturers contemplated meeting the new requirements, will probably not be the same in 2015 as they were in 2010.

The complications and nuances of the changes to come in the water heater market were discussed in front of a packed conference room at the American Council for and Energy Efficient Economy Hot Water Forum here by Frank Stanonik, chief technical advisor for the Air-Conditioning, Heating & Refrigeration Institute, and by Harvey Sachs, ACEEE senior fellow.

To review, gas storage water heaters with a volume greater than 55-gal. will see their Energy Factor go from .67 to .8012. Electric storage water heaters over 55-gal. take the biggest jump, from .97 to 2.057. Those holding more than 65-gal. will move from a .88 EF up to 1.98. Gas tankless water heaters transition from .62 up to .82. Any storage water heater with a capacity less than 55-gal. will see only incremental increases in EF.

The result of the rules will likely be different than what DOE contemplated. For example, no residential gas storage water heaters will be manufactured between 60-100-gal. capacities, said Stanonik. DOE’s intent was to force all of those sizes to condensing. Standing pilot will be eliminated for tankless heaters, but you’ll still be able to find natural draft models. The range of products that will be considered “standard”, however, will be narrow, about .82-.84 EF.

There will be no electric water heaters between 60-120-gal. produced, Stanonik said. DOE’s intent was to force those capacities to be heat pump water heaters.

Grid-tied large capacity electric off-peak or thermal storage water heaters appear to be off the market, much to the distress of the rural electric cooperatives that use them to smooth their loads. Those units were eliminated from the 2010 rulemaking, but DOE has published a Notice of Proposed Rulemaking that would resurrect them. A coalition wrote to Sens. Jeanne Shaheen and Rob Portman on Sept. 12, 2013, asking them to amend the Energy Policy and Conservation Act to bring back the grid-enable electric resistance units. Signers of the letter included A.O. Smith, AHRI, ACEEE, Edison Electric Institute, National Rural Electric Cooperative Association, and the Natural Resources Defense Council.

So what will be the effect on consumers? It appears, Stanonik said, that large loads will be handled by some kind of advanced technology, such as multiple smaller heat pump or condensing water heaters.

DOE noted that less than 5% of the market is high-volume gas and high-volume electric is less than 10% of the market. That’s still a huge number of people, Stanonik pointed out.

There are 88 million single-family units in the U.S. More than 10% have five or more occupants, or 9.25 million units. Twenty-one percent have four or more bedrooms or 18.5 million units.

Stanonik speculated that manufacturers will redesign their product lines and we may see small volume units operating at high temperatures with anti-scald mixing valves built in. Electric tank units may have higher inputs or more elements. We may see water heaters that heat like a tankless unit but with storage attached. Plumbing contractors will have to adapt to the changes and models available on the market and, perhaps, install multiple water heaters along with more compact and efficient plumbing system designs.

Contractor training will be an issue, Karen Meyers, director of government relations for Rheem Mfg. Co., pointed out from the audience. She said DOE comes up with these rule changes without considering how plumbers will be trained. When it comes to servicing heat pump water heaters, Eric Arnold from Georgia Power has encountered conflict between HVAC and plumbing contractors over who has responsibility for the units; he has also seen conflict inside contracting firms between the Baby Boomer owners and the Gen Yers who want to take on the new technology.

Stanonik said he believes DOE’s thinking was that the large volume water heating market is served by larger contractors who can handle the transition.

ACEEE’s Sachs pointed out that heat pump water heaters have been everybody’s favorite new technology since the ‘90s. In fact, during the Clinton administration, DOE considered the idea of making all electric water heaters — all 3 million a year — heat pump water heaters. Fortunately, that notion was abandoned.

This time around DOE decided to lead new technology onto the market at the point where the biggest savings could be achieved and the additional upfront cost absorbed by large users. The Department decided to make 55-gal. the transition point. If you go below 55-gal., Sachs noted, you increase the fraction of installations that will be really, really difficult. Moreover, compressors are still noisy, and homeowners will object.

Sachs opined that small capacity heat pump or condensing water heaters will never make sense, but the difficulty lies in that he doesn’t know how small is small. Would it be 30-gal.? 20-gal? Stanonik chimed in that it would be difficult for a manufacturer to make a small condensing water heater for both technological and economic reasons.

Sachs believes we will not see a 1:1 correspondence in sales of large conventional water heaters being replaced by large condensing or heat pump water heaters. Those large conventional water heaters will probably be replaced with something else but what that something else will be is unknown.

Sachs noted that the Southeast is largely an electric water heating market and that heat pumps, which provide cooling as a side effect of heating the water, should be successful.

Finally, many water heater sales are emergency replacement. What will it take, Sachs asked, to persuade plumbing contractors to carry a heat pump water heater on the truck so they can offer it as an immediate replacement?