Water Heating

Efficient, demand flexible, electric HPWHs are designed to meet the hot water demands of residential households or buildings with similar water heating needs. This technology family will help meet the California Energy Commission’s goal of installing at least six million heat pumps by 2030.

Example Technologies

Unitary and Split-System HPWH for single family and individual multi-family dwelling units; low-Global Warming Potential (GWP) refrigerants for residential-duty HPWH; 120V plug-in HPWHs; and grid and utility integration for connected residential-duty water heaters.

Note: The updates to this subgroup include 120V plug-in HPWHs; as they are now available on the market from two manufacturers, and grid and utility integration for connected residential-duty water heaters as the previous Grid Integration & Market Intervention technology family was removed, with this technology being the best fit.

Opportunities

Storage HPWHs are a critical residential building decarbonization strategy, providing a cost-effective, electric water heating solution for load reduction and shifting during peak utility periods. The potential for load shifting and shaping, load management from scale of day to half-hour, and the resulting GHG reduction from shifting the heating schedule(s) to times when the electricity grid has a lower marginal emissions rate and cost to operate.

Shifting to low-GWP refrigerants (e.g., CO2) offers increased colder climate performance, higher water temperature capabilities and other direct greenhouse gas (GHG) emission benefits due to the risk of refrigerant leakage.

Assessment and attribution of non-energy benefits (NEBs) (e.g., reducing indoor exposure to combustion gases) and development of innovative solutions for increasing equitable access to HPWHs and load flexibility programs.

Assessment of innovative financing mechanisms, deployment interventions and behavioral programs that enable accelerated adoption of HPWHs.

Evaluation and adoption of new 120V plug-in models and support for HPWH manufacturer product improvements to address known electrical capacity constraints, installation complexity and costs, facilitate adequate airflow and/or venting, decrease unit size (for space-constrained scenarios), and increase capacity and efficiency.

Barriers

Technical performance of 240V unitary HPWHs is generally well-known due to mature testing and rating systems. With the emergence of 120V plug-in and split HPWHs, performance and suitability of existing testing and rating systems is less known.

Consumers and contractors general default sizing metric of tank capacity is insufficient in comparing gas heaters and HPWHs and especially 120V plug-in models. Industry-wide transitions to first hour rating (FHR) or another metric to account for the lower British thermal unit per hour (BTU/h) ratings of HPWHs will be necessary to ensure similar performance across products.

HPWHs have installation challenges and operational features not found in common gas storage alternatives that can make fuel-switching challenging:

1. Plumbing contractors generally lack expertise in disposal of condensate, adequate airflow, and venting to ensure proper performance of HPWHs.
2. Electrical service upgrades can be a significant cost barrier and may need load management strategies or deployment of 110V/120V products to delay or mitigate the expense of an electric service or panel upgrade.
3. Emergency replacements are the most common scenario for a new water heater installation in existing homes, which creates barriers to conversion to HPWHs from conventional gas water heaters.
4. Permitting processes and a need for a separate electrical contractor adds significant cost increases and delays in hot water restoration for the customer.
5. Market interventions necessary for rental ratepayers to see the benefits of HPWHs.
6. Cost-effectiveness of HPWH conversions can be impacted due to current electrical and gas tariff structure and/or grid integration incentives.

The 2022 Water Heating revisions consisted of four opportunities and two barriers. As this market has expanded and matured there are more specific areas to focus on for opportunities and more barriers have come to light, therefore the SME team has made these several additions. The key changes to this technology family for 2023 include:

2023 Key Changes

• Added 120V plug-in HPWHs as a new subgroup.
• Added grid-integrated components to the Res Duty technology family
• Discussion of whether this tech family is specific to HPWHs or more open to instantaneous / point-of-use (POU)
• Clarify/settle on some terminology across entire TPM (e.g., load flexibility/management/shifting)
• Added/shifted market development activities (financing, deployment, behavioral) to opportunities

Focus for New Research

• Increased evaluation on new 120V plug-ins and alternative retrofit solutions
• Phase Change Material (PCM) enhanced HPWHs
• Technology and strategies to streamline/enable grid-interactive functionality (SGIP)
• Need to delineate between CalNEXT, TECH, and MTA market development actions

Efficient, demand-flexible electric water heating systems for non-residential applications (such as offices, hotels, healthcare, and food service) and multi-family residential applications (typically ≥5 dwelling units).

Example Technologies

Central HPWH systems for multi-family, hotel/motel, food service, healthcare, and non-residential buildings; low-GWP refrigerants; dual-fuel water heaters; demand flexibility; grid and utility integration for connected commercial-duty water heaters; financing mechanisms; deployment interventions.

Note: The updates to this subgroup include non-residential buildings; to catch all applications, demand flexibility; grid and utility integration for connected commercial-duty water heaters; as the previous Grid Integration & Market Intervention technology family was removed, financing mechanisms; deployment interventions as these are available on the market now.

Opportunities

Water heating is among the largest footprint end-uses positioned for decarbonization with all-electric HP options, with greater efficiency than electric resistance alternatives and source energy savings over natural gas alternatives. HPWHs are an emerging technology with new products reaching the market such as large water storage capacity hybrid water heaters and large heating capacity low-GWP refrigerant HPs.

HPWH systems present the potential for efficiency and demand flexibility with appropriate system designs that consider storage volume, system configuration options, HP heating capacity, primary heater design, heat exchangers, temperature maintenance systems, controls, and draw patterns. The potential for load shift, shape, and shimmy: demand flexibility on a scale of day to half-hour and GHG reductions resulting from shifting heating to times when the electrical grid has a lower marginal emissions rates and cost to operate. Prospective ET studies may focus on:

1. Improving the efficiency (for operating cost parity with natural gas-fired heaters) and reducing the complexity of all-electric centralized HPWHs.
2. Innovative program designs that can bring benefits of HPWHs to disadvantaged communities.
3. Developing incentive programs for medium and large low-GWP commercial HP in all building categories that use commercial heaters.
4. Demonstration of overseas HP technologies that use new low-GWP refrigerants and other form factors such as low-GWP integrated HPWH or 20 – 30-gallon integrated HPWHs for point-of-use applications.
5. Installed cost and space requirements compression of HPs and storage tanks.
6. Innovative program designs to ensure the multiple value-streams of efficiency, decarbonization, and grid-integration are all actualized.
7. Field assessments of dual-fuel water heating to address the needs of high-load, rapid-recovery applications such as existing commercial kitchens.
8. Demonstration projects that utilize the cold air by-product of air-source HPs to supplementally cool conditioned spaces.
9. Optimizing or eliminating heat exchangers between primary HPWH and secondary DHW loops or storage vessels.
10. Demand flexibility controls demonstration and implementation guidance.

Barriers

Commercial-duty HPWH systems are still in a nascent technological stage that continues to evolve. Physical space, electrical infrastructure, installed costs, and operating costs are some of the biggest limitations that have slowed fuel-switching in retrofit applications. Existing gas-fired hot water systems comprise 85 percent of the installed base of commercial WH. Other limitations include product availability of low-GWP four-season HPs, weight, and noise. Manufacturers and distributors have started to address the barriers of design complexity, installation, and commissioning through the development of factory-built and commissioned skid and packaged systems that can be scaled for a range of applications.

Researchers and design firms have developed better sizing tools to right size HPs for mitigating cost and space requirements in multi-family buildings, but similar tools are needed for the many other commercial HPWH applications. Current health department sizing requirements do not address the use of HPWH systems in commercial kitchens and do not account for storage volume as a factor in sizing water heater capacities. New programs have only begun to scratch the surface of addressing barriers to adopting commercial HPWHs.

Barriers to be addressed include:

1. Lack of diverse heat pump products such as 120 – 200-gallon 120V HP commercial integrated HPWHs
2. Lack of field performance data of various designs, configurations, and applications (including system reliability and cost-effectiveness).
3. Lack of easy to access case studies that span the diversity of buildings with commercial HPs (120V integrated, 240V hybrid integrated, and indirect central HPs and combined with complementing strategies including POU heaters, heat recovery, master mixing valves).
4. Lack of statewide incentive programs for medium and large commercial HPWHs for businesses.
5. Lack of design tools to select and appropriately size HPWHs outside of multifamily applications.
6. Minimal documentation and empirically determined hot water load profiles for various non-residential building types, important for developing sizing tools, design guidance, and regulatory updates.
7. Ways to streamline electrical panel upgrades to support HPWHs or using alternative technologies to minimize or eliminate the need for upgrades.
8. Lack of HPWH familiarity for building permitting authorities (and health departments).
9. Lack of coordination between trades (e.g., electrical and plumbing).
10. Lack of sector-specific knowledge in implementing HPWHs in disadvantaged communities (multi-family housing).
11. Changes in the tariff structure and/or grid integration incentives to mitigate cost-effectiveness concerns.
12. Lack of code readiness activities to support electric ready code requirements for all non-residential building types that utilize commercial water heaters.
13. Lack of demonstration, guidance, and simplified implementation procedures of dependable demand flexibility and load shifting controls.

Note: The 2022 Water Heating revisions consisted of two numbered opportunities and five barriers. As this market has expanded and matured there are more specific areas to focus on for opportunities such as improving the efficiency (for operating cost parity with natural gas-fired heaters) and more barriers have come to light, including lack of diverse heat pumps products, lack of field performance data, among many other barriers listed above, therefore the SME team has made these several additions. The key changes to this technology family for 2023 include:

2023 Key Changes

• Added 120V plug-in integrated HPWHs as a new subgroup for small buildings (retail, salon, etc.)
• Added grid-integrated components to the Commercial Water Heating
• Discussion of whether this tech family is specific to HPWHs or more open to point-of-use (POU) heaters at sinks and integrated heat recovery/ER POU heating for sanitation equipment to size down or eliminate need for centralized heaters or continuous recirculation

Focus for New Research

• Case studies that span the diversity of building with commercial heaters and combination space conditioning and water heating systems
• 120-to-200-gallon 120V and 240V integrated HPWHs without backup ER
• Cost compression for low-GWP HPs and storage tanks (non-pressurized storage tanks, reducing complexity, increase scale)
• Small volume 20-to-30-gallon HPWHs (e.g., office buildings) for POU sink and shower applications as alternative to centralized heating
• Footprint compression for storage tanks and HPs with optimized heating plant configurations, auto switching from single pass to multi pass operation HPs, and PCM material in tanks
• Statewide incentive programs for commercial HPs (not hybrid heaters) for businesses
• Code readiness activities to support electric ready code requirements for all commercial and industrial building types that utilize commercial heaters

Distribution system and point-of-use design strategies and alternative heat sources to advance energy efficiency, water conservation, and GHG benefits.

Example Technologies

Recirculation systems; heat recovery systems; master mixing valves; thermal energy storage, residential, commercial, and community-scale solar and geothermal water heaters.

Opportunities

Opportunities in this technology family will increase energy efficiency and demand flexibility through well designed hot water recirculation and heat recovery systems and the use of thermal energy storage systems and master mixing valves. Prospective ET studies should include software solutions, design guides, or field monitoring studies with these auxiliary components that address:

1. Bringing clarity to designers for cost-effective scenarios for drain water heat recovery.
2. Incorporating integrated exhaust air or refrigerant heat recovery systems at the water heater or point-of-use equipment location.
3. Novel recirculation and load-matching control strategies such as automatic balancing valves, combined optimization of temperature modulation, variable speed pumps with integrated constant return temperature control or occupancy-based pump controls and distributed isolating valves.
4. Incorporating high-performance master mixing valves to increase thermal storage capacity and utilization, increase tank water temperature stratification with continuous recirculation systems and reduce recirculation loop heat losses through precise temperature control.
5. Improving system efficiency through clustered centralized systems that reduce pipe heat losses and improve water heater efficiency versus one large, centralized water heating and distribution system.
6. Enhancing energy density and load matching of solar thermal and photovoltaic (PV)-assisted water heater designs.
7. Increasing thermal energy storage density from the use of phase change materials for increasing renewable energy penetration and load flexibility.
8. Development of alternative techniques to mitigate legionella risk, enabling additional use cases for HPWH systems.

Barriers

Alternative hot water design strategies are an important approach to decarbonize many “hard-to-electrify” water heating scenarios. Recirculation systems, although important to improve hot water delivery time and minimize water waste, can heavily impact HPWH performance in central multi-family and commercial buildings. ET investments in this technology family can help bring greater awareness and highlight alternative decarbonization pathways.

Potential barriers studies should address:

1. Lack of trusted software tools and design guides to simplify large HPWH system.
2. Lack of trusted software tools and design guides to simplify solar hot water system designs.
3. Lack of consistency among code requirements related to hot water setpoint temperatures.
4. Lack of experience deploying drain water heat recovery, particularly with the variety of potential heat sources.
5. Lack of experienced practitioners in alternative strategies.
6. Potential degradation of energy efficiency with improperly designed, installed, and maintained designed recirculation systems for large HPWHs.

Note: As ideas have been brought to market, new ideas have been formed resulting in an increased number of opportunities and barriers identified. It has also been seen that recirculating systems can be designed and installed, poorly resulting in increased heat loss through the large amount of surface area or stratification in tanks. The key changes to this technology family for 2023 include:

2023 Key Changes

• Technologies in this category such as drain water heat recovery led to increased energy efficiency
• Barriers in HPWH adoption due to decrease in energy efficiency from recirculation

Focus for New Research

• Drain water heat recovery
• Advanced/Smart recirculation systems
• Solar thermal and PV-assisted systems
• Improved mixing valves and auxiliary devices for increased utilization of TES

Electric pool heaters for residential and non-residential pool markets; pool pumps and pool controls designed for the residential and non-residential pool market to increase efficiency, performance, and enable load shifting; and alternative strategies for pool heating and maintenance. The technology family will help support the development of all-electric codes and ease pool heating loads to improve grid resiliency.

Note: This family is eligible for a Focused Pilot TPM project. This family was added to avoid a scenario where a new home has a gas line only for the pool heaters. The local reach codes program had heard that concern, which lead to the development of a cost effectiveness report comparing gas-fired pool heating to heat pump pool heaters and solar, which allows local jurisdictions to develop cost effective reach codes.

T24 2025 has a proposed measure to disallow gas-fired pool heating to be the primary source of heat.

With these two efforts the program team felt it was appropriate to support the transition away from gas-fired pool heating.

The smaller group that developed the language for this new family rated the priority as high, but after discussing this with the larger group, it was agreed that the priority could be reduced to medium as pools are a luxury item, so not in every home, but still a large gas user and important for decarbonization.

Example Technologies

Residential and commercial electric pool heater equipment, HPPH, solar assisted HPPH, pool automation systems for pool pumps, and pool covers.

Opportunities

Opportunities in this technology family will increase efficiency with optimized equipment and designs, including optimized electrification of pool heating loads, pool operation controls and the incorporation of load shifting of electric pool loads. Prospective ET studies should include controls solutions, design guides, or demonstrations that address:

1. Projects that demonstrate the emergence of new technical innovations, such as smart controls, variable speed, hybrid units, low-temperature operability, and staggered start-up capability with HPPHs.
2. Projects that demonstrate electrification of pool heating loads as part of home electrification service assistance. Projects may include those that have homes with photovoltaic solar or plans for PV to be installed soon.
3. Projects that encourage HPPH or solar-assisted HPPH adoption in new home construction or newly constructed pools.
4. Innovative pool cover projects that encourage the consistent use of pool covers to enable wider adoption of HPPH. Project could include novel methods to reduce the installation and maintenance costs of automated pool covers.
5. Innovative projects to address electrical system requirements when the existing pool heater uses natural gas.
6. Innovative applications of HPPH to provide heating to inground spas. Projects that demonstrate the utility of hybrid HPPH to provide spontaneous heating.
7. Innovative projects to demonstrate ability of electrical system to accommodate startup surges due to HPPH compressor operations. Accommodation of other emergent loads on the home electrical system such as heat pump and electric car charging.
8. Projects that demonstrate the load shifting potential for both pool heating and pumping in coordination with proposed flexible demand appliance regulations by the CEC.

Barriers

HPPH installation face opposition where high electric rates discourage adoption of electric heating.

HPPHs lose heating capacity as temperatures decrease. While not a concern for spring, summer, and fall heating seasons, many climate zones within California present challenges to economical heating from HPPHs during the winter months due to increased heating load and decreased heating capacity.

Alternative hot water design strategies are an important approach to decarbonize many “hard-to-electrify” water heating scenarios. ET investments in this technology family can help bring greater awareness and highlight alternative decarbonization pathways.

Potential barriers studies should address:

1. Inconsistent design software
2. Ongoing practice to oversize heaters and pumps
3. Learning curve on pool heating operation with a HPPH versus a gas-fired pool heater regarding set back temperatures.
4. Limitations based on health code requirements
5. Roof space for solar thermal competing with PV