DOE’s latest rule could make tankless water heater installs much harder
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A new Department of Energy (DOE) rule will effectively ban non-condensing gas-fired instantaneous (tankless) water heaters starting in 2029, forcing contractors and consumers to switch to condensing models that require costly and complex retrofits. This change will make installation significantly more challenging, particularly in older homes, condos, and multi-family buildings that cannot easily accommodate the necessary venting and drainage modifications.
You can help stop this ban. Join our Action Alert now to tell your elected officials to oppose this misguided regulation. Senator Ted Cruz and Representative Gary Palmer have introduced resolutions—S.J.Res.4 and H.J.Res.20—to overturn the rule before it takes effect, but they need contractor support.
On December 26, 2024, DOE published a Final Rule establishing new efficiency standards for gas-fired instantaneous water heaters manufactured on or after December 26, 2029. This rule requires all new models to meet a Uniform Energy Factor (UEF) of 0.91 for medium draw patterns and 0.93 for high draw patterns—thresholds that only condensing units can achieve. Since non-condensing models max out at a UEF of 0.81, they will be effectively banned from the market.
Installations will become substantially more complicated for contractors. Condensing water heaters require specialized venting and drainage systems, often necessitating costly retrofits. Many homes are structurally incapable of accommodating the necessary venting modifications without extensive renovations. Even then, existing masonry chimneys and shared walls make it difficult—if not impossible—to install the PVC venting required for condensing models. These installation challenges disproportionately impact residents in urban areas and lower-income households who may not be able to afford the thousands of dollars in additional costs associated with retrofitting.
Beyond the financial burdens, DOE’s decision to mandate condensing technology contradicts the intent of the Energy Policy and Conservation Act (EPCA), which explicitly prohibits efficiency standards that eliminate product classes with distinct performance characteristics. By setting efficiency levels that non-condensing units cannot meet, DOE has effectively banned an entire category of water heaters currently available to consumers. The rule has already sparked significant opposition, with many industry groups and dozens of lawmakers voicing their displeasure.
ACCA remains committed to advocating for sensible regulations that promote energy efficiency without imposing undue hardship on consumers and contractors. ACCA will continue to monitor developments and provide updates on efforts to overturn this rule.
Join our Action Alert now and make your voice heard on Capitol Hill.
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Posted In: Action Alerts, Government, Polices & Procedures, Top Priorities
