Natural Gas Water Heater Ban Backlash: What It Means for Consumers and Costs

In the final days of the Biden administration, the US Department of Energy (DOE) published a new rule banning non-condensing, natural gas-fired water heaters—which currently accounts for approximately 40% of manufactured tankless water heaters—by 2029, precipitating the re-shuffling and re-engineering of tankless production.

Proponents of the ban claim that in addition to reducing emissions, leading to a what the DOE’s Office of Energy Efficiency and Renewable Energy says is a “significant conservation of energy,” consumers could see a reduction in energy use, cutting costs by nearly $100 a year for the average family. On the flipside, how much will consumers pay for the new equipment? Some reports see a consumer investment of nearly $450, or they may opt for a less efficient water heater alternative, rendering the ban somewhat counterproductive in its objective.

In any event, as you might imagine, the new administration is already looking to overturn the aforementioned gas water heater ban. Recently, Representative Gary Palmer, R-Ala., introduced a Congressional Review Act (CRA) resolution to block the Biden Administration’s recent attempt to ban natural gas water heaters. “This radical ban on gas water heaters proves that the administration’s focus is on furthering an agenda instead of what is best for the American people,” says Palmer. 

In addition, according to information compiled by Politico, republican lawmakers in 26 states have already passed laws prohibiting gas bans. The nation’s first ban on natural gas hookups in new buildings—in Berkeley, Calif.—was also repealed earlier this year, after a federal appeals court ruled it violated federal law.

Big Picture

The fight against water heater bans points to the larger issue of moving toward all-electric prematurely. “We are moving extremely fast,” says Mike Prencavage, Jr., Owner, The Family Plumber, Los Alamitos, Calif. “Here in California, new construction projects no longer allow natural gas appliances to be installed. By January 1, 2029, a complete ban of natural gas on residential service or repair will take effect rendering it impossible to purchase appliances such as water heaters, stoves or dryers that run on natural gas. There are quite a few plumbing contractors here in California that are completely unaware of these bans.”

Prencavage Jr. says that when informing a client on these new regulations, it’s been eye opening for them see the large estimate cost to convert home appliances over to another energy source. “There is a huge, unexpected cost to any consumer looking to switch their appliance over to a different energy source. In the retrofit space, you’d expect to spend more than $6,000 for most single-family dwellings to upgrade the utility supply in the home. New construction cost would increase based on technical training and supply. These new construction companies will be charging much more for skilled labor that must be certified and trained to install these alternative systems and appliances. The dramatic change will leave many blindsided.”

Not to mention that the electrical infrastructure in California is already stretched to its limits. “Our current power supply, which is primarily outsourced from other states, is already at max capacity. Roaming blackouts during heat waves, and more recently fires that have potentially been started by our already aging electrical infrastructure, do not promise that electricity is the best alternative energy option. Add more strain to the system and bad things will inevitably happen,” adds Prencavage Jr.

Over on the other side of the country, New York, for instance, has proposed that any new residential construction in the state having three stories or less must be “all electric,” with limited exceptions. According to the New York State Association of Realtors, a similar requirement for all buildings, residential and commercial, four stories or more is set to begin January 1, 2028. Proposals call for transitioning existing homes and businesses from natural gas and oil heating systems to electric or geothermal heating systems, starting in the year 2030.

Starting in 2030, homeowners will only be permitted replace a gas furnace, water heater, or oil furnace with an electric one. This change would take effect for larger residential and commercial buildings starting in 2035.

The Possible and Practicable

All of this talk, and governmental action—on a state and federal level—should at the very least elicit an ongoing conversation. Is transitioning to all electric even feasible? Is this what consumers want?

“We all want to do what is best for the environment and our future generations, no doubt,” says Jason Pritchard, Managing Partner, PriCor Technologies, Seattle, and PHCC-NA President-Elect.

“But at this moment in time, these mandates just seem premature. Our electrical grid is not prepared to accommodate a full conversion from fossil fuels to electrification. We are seeing this across the country, including here in Washington state. We recently had a major weather event that shut down power to hundreds of thousands of people for weeks. These people were without heat, and unable to cook for several weeks. Those with natural gas were in a much better position to care for themselves,” continues Pritchard.

Also, there could be confusion with the electrification message. “The problem comes from the conflation of electrification and decarbonization,” says Robert O’Brien, Oil & Energy Service Professionals (OESP), National President and President, Technical Heating Company, Mount Sinai, N.Y. “They are not one and the same, a heat pump, for example, is only low carbon to the extent of the cleanliness of the grid powering it. Unfortunately, the grid is still mostly powered by fossil fuels and nuclear; the renewable portion of the grid is growing but the entire electrification movement is predicated on the accepted ‘fact’ that the grid will be completely ‘green’ at some point in the relatively near future.”

According to O’Brien, having every option available to decarbonize makes the most sense, and if decarbonization is the goal, setting targets and letting the market decide the best solution has always been the best approach. “Selecting one fuel as the magic bullet stifles research and development of other fuels, some of which may not even be a wild dream at this point. Picking winners and losers is not a viable option. The market will speak and select the best solutions to meet the goals. Most likely, the solution or solutions that work best in Maine won’t work best in Louisiana. It’s a complex problem requiring complex solutions,” says O’Brien.

To reiterate, fuel choices should remain in the deciding hands of the consumer. Prencavage Jr. says that when asking fellow contractors on whether the gas bans are justified, they are in unison in the thought that more efficient home appliances would help cut costs down on home ownership while doing their share to collectively contribute to a carbon footprint reduction. However, “unless the surplus of natural gas resources was unavailable for distribution, I believe that all customers should have a choice of what type of utilities are supplied in their homes. The public should actually be made more aware of alternative fuels—such as hydrogen—which could lead to a more natural progression of emission change rather than it becoming forced,” says Prencavage Jr. 

So as the debates continue, the freedom of fuel alternative choices struggle lingers on as well. “There are always early adopters who want to be out in front of any trend and the ‘Luddites’ who resist any change for any reason. The 80% in between just want to be reliably comfortable at a reasonable cost, and if it helps the environment, that’s a bonus,” says O’Brien.