Market-Focused Program Design to Accelerate Penetration of ENERGY STAR Water Heaters

The residential water heating market in the U.S. is dominated by storage water heaters with 96 percent share and roughly equal sales for electric resistance and natural gas heat sources. Over the last half decade, two water heating technologies have entered the market place bringing significant improvements in energy efficiency, tankless water heaters and electric heat pump water heaters. There are efficient water heater options, based on ENERGY STAR criteria that can drive significant energy savings for PG&E customers. Market barriers are greater than technology limitations in preventing rapid market growth. This project describes market conditions, assesses barriers such as product availability, and presents options to increase participation in PG&E’s residential water heater program.