Heat Pump Water Heaters and California’s Decarbonization Initiative May 9 and 10, 2019

CA Heat Pump Water Heater Implementation Initiative

Why Heat Pump Water Heaters? California Initiative Why Decarbonize? Why Heat Pump Water Heaters? Heat Pump Water Heaters May 2019 3

California Initiative We may not be able to control climate change, but we can lessen our impact on the earth. Heat Pump Water Heaters May 2019 4

Heat Pump Water Heaters and the Decarbonization Initiative California Initiative Heat Pump Water Heaters and the Decarbonization Initiative The benefits of Heat Pump Water Heaters (HPWH) have been well expounded by many. HPWHs can play a valuable role in California’s decarbonization initiative by displacing both traditional resistance electric water heaters and gas-fired water heaters. The best HPWHs are approaching levels of performance where their energy consumption can be one fourth that of a traditional resistance electric water heater. This reduces the load on the grid directly. Heat pump water heaters can efficiently replace gas fired water heaters, decarbonizing the production of hot water. Because their electrical consumption is lower than a resistance electric water heater, the impact on the grid of replacing a gas fired water heater with an electric water heater is lessened. Electrically powered water heaters can use renewable energy sources for the production of hot water. Heat Pump Water Heaters May 2019 5

Heat Pump Water Heater peculiarities  Adoption Risks California Initiative Heat Pump Water Heater peculiarities  Adoption Risks The purchase price of a HPWH is much higher than a similar gas or resistance electric water heater. A HPWH will be physically larger (e.g. 18” taller) than a gas or resistance electric unit for a given storage volume. A HPWH has a lower input than a similar gas-fired or resistance electric water heater, therefore, a HPWH with more storage capacity would be recommended to make up the difference in recovery, further taxing the space available for the installation. A HPWH needs room to breath – a volume of air around it or ducting is required for it to function properly. A HPWH produces condensate as it operates, requiring a means to manage the condensate. An electrical circuit of adequate ampacity may not be available if the HPWH is replacing an atmospheric, gas-fired water heater. A lack of options available today means that there may not be a HPWH available that fits the needs of the installation site. Heat Pump Water Heaters May 2019 6

Heat Pump Water Heater Adoption Risk Countermeasures California Initiative Heat Pump Water Heater Adoption Risk Countermeasures Education Educate users and installers of the regulations, options and incentives available Educate installers and sellers on how to select the best HPWH for the installation Educate installers how to properly install a HPWH to ensure that it will provide the users with all the hot water they need through years of trouble-free operation. There may be no bigger risk to this initiative than installing HPWHs in applications where they are incapable of meeting the water heating needs of the users. Installers must know how to properly size a HPWH for its application. Storage Water Examples by Type Capacity (gal.) Efficiency (UEF) Input (btu/hr) Recovery (gal./hr) FHR Gas-fired 48 .64 40k 40 77 Resistance Electric 45 .93 15k 20 61 Electric Heat Pump* 3.4 65 RRHPWH (theoretical) 30 3 9k 12 25 * With resistance electric element Heat Pump Water Heaters May 2019 7

Heat Pump Water Heater Adoption – Recommended Approach to Incentives California Initiative Heat Pump Water Heater Adoption – Recommended Approach to Incentives Meeting California’s aggressive targets for decarbonization presents a significant challenge. There is no “one size fits all” HPWH. To have a HPWH available for every housing unit will require a wide variety of HPWH solutions. We recommend incentives programs that apply to all Heat Pump Water Heaters that meet California and U.S. DOE minimum performance requirements. We recommend that incentives programs be simple and applied upstream or midstream. Heat Pump Water Heaters May 2019 8

What Can Ariston Offer to Speed the Adoption of HPWHs? Product Overview

Lydos Hybrid Product Overview The Lydos Hybrid: Our most cost competitive HPWH Twice the efficiency of a resistance electric water heater Hassle-Free Installation: no air ducts easy condensate management Short pay-back on investment Available in 21 and 26 gal. capacities Wall hung with hidden plumbing connections No sacrifices in quality, sound or reliability The Lydos Hybrid could be the product that makes a HPWH a viable option in low cost housing and low income households. Heat Pump Water Heaters May 2019 10

Nuos Evo A+ Product Overview Nuos Evo A+ The premium compact renewable solution that aligns with the “Retrofit-Ready Heat Pump Water Heater” initiative. Features: The highest rating per the EU’s ErP energy efficiency rating system Fast Payback Compact size Available in 21 and 29 gal. capacities Wall hung with hidden plumbing connections Quiet operation The Nuos Evo A+ may be just the product that California is asking for. Heat Pump Water Heaters May 2019 11

Nuos Plus Product Overview Nuos Plus For non-space constrained applications, the Nuos Plus is a no-compromise replacement for a typical gas-fired storage water heater. Features: Large storage volume and high input for installations with high water heating demands. Achieves the highest rating per the EU’s ErP energy efficiency rating system Available in 53 and 66 gallon capacities Quiet operation Ducting kits available The Nuos Plus is a perfect fit for where space is not constrained and/or in households with high demands on water heaters Heat Pump Water Heaters May 2019 12

Nuos Split Product Overview Nuos Split The Nuos Split offers maximum installation flexibility while meeting the water heating needs for most any household. Features and Benefits: High Efficiency Available in floor standing or wall hung models Available in volumes ranging from 21 to 77 gallons. Maximizes the use of the space available indoors Silent operation of the indoor unit The Nuos Split could be the practical split-system HPWH for California’s trickier installations. Heat Pump Water Heaters May 2019 13

How Can We Offer Such an Extensive Line of Heat Pump Water Heaters? ENERGY EFFICIENT COMFORT How Can We Offer Such an Extensive Line of Heat Pump Water Heaters? Here is Who We Are and What We Do

OUR HISTORY WHO WE ARE AND WHAT WE DO Heat Pump Water Heaters May 2019 FOUNDED IN ITALY IN 1930 FROM 1930 TO 2017 Aristide Merloni founds the Industrie Merloni. The Group is still growing in both emerging and mature markets, not just by distributing its products, but also with production plants meeting the Group’s Quality standards. Ariston Thermo continues in its growth strategy through the important acquisition of brands like Atag and Heat Tech Geysers in 2014, Gastech-Energi A/S and SPM in 2015, NTI in 2016, HTP and Atmor in 2017. Ariston Thermo thus strengthens its presence worldwide as a sign of a global growth strategy. Heat Pump Water Heaters May 2019 15

GLOBAL VISION, LOCAL ACTION WHO WE ARE AND WHAT WE DO GLOBAL VISION, LOCAL ACTION Heat Pump Water Heaters May 2019 16

Heat Pump Water Heaters May 2019 WHO WE ARE AND WHAT WE DO Heat Pump Water Heaters May 2019 17

ENERGY EFFICIENT COMFORT Closing and Contact Info. “THANK YOU” for having us here today. We are very excited and proud to be active participants in this important initiative. We welcome any and all input on our possible product offerings. Feel free to contact me with questions or comments: Brian Pickett brian.pickett@htproducts.com (774) 271-3159 Heat Pump Water Heaters May 2019 18