2. Northwest Power and Conservation Council Slide 1 Heat Pump Water Heaters Tom Eckman Manager, Conservation Resources Northwest Power and Conservation Council Presented at Northwest Energy Efficiency Alliance Heat Pump Water Heater Workshop May 25, 2011 They’re BAAACK!

3. The Good Heat Pump Water Heaters The Bad and The Ugly

4. Northwest Power and Conservation Council Slide 3 slide 3 The Good Provides significant (50%) cost-effective reduction in energy use to provide hot water Provides significant (50%) cost-effective reduction in energy use to provide hot water Provides additional consumer benefits Provides additional consumer benefits –Heat recovery ventilation, controlled by “occupancy” –Dehumidification –Air conditioning Avoids “Fuel Wars” - Delivers better thermodynamics than direct use of natural gas Avoids “Fuel Wars” - Delivers better thermodynamics than direct use of natural gas

5. Northwest Power and Conservation Council Slide 4 slide 4 The Bad First Cost - $1200 - $3000 First Cost - $1200 - $3000 Long history of “false starts” Long history of “false starts” –“There’s a lot of money in heat pump water heaters... and we put it there.” Birney Middlestat, Dairy Equipment Corp (DEC)

6. Northwest Power and Conservation Council Slide 5 slide 5 and, The Ugly Lot’s of ways to install them “wrong” Lot’s of ways to install them “wrong” Water heating has not required “consumer participation” Water heating has not required “consumer participation” Plumbers may want a “piece a this action” – driving up price Plumbers may want a “piece a this action” – driving up price Major manufacturers are just starting to “produced” Major manufacturers are just starting to “produced”

7. Northwest Power and Conservation Council Slide 6 We’ve Been Here Before Plan Date Incremental Cost (2006 $) Achievable Savings in Plan 1983 $1,851 180 MWa 1986 $2,450 Not Cost-Effective 1989 $2,423 Not Cost-Effective 1991 $1,624 Not Cost-Effective 1995 $1,156 Not Cost-Effective 2004 $1,511 200 MWa 2009 $796 490 MWa slide 6

8. Northwest Power and Conservation Council Slide 7 slide 7 Existing Products – Early 2009 AirTap E-Tech Nyle

9. Northwest Power and Conservation Council Slide 8 slide 8 Current Products Two Years Later 34 Energy Star™ listed HPWHs 34 Energy Star™ listed HPWHs 2 of 3 Major Hot Water Heater Manufacturers (AO Smith & Rheem) now in full production 2 of 3 Major Hot Water Heater Manufacturers (AO Smith & Rheem) now in full production New market entrants (General Electric & Air Tap) are widely available New market entrants (General Electric & Air Tap) are widely available Retail Prices ~ $1200 - $3000+ (not including installation ) Retail Prices ~ $1200 - $3000+ (not including installation )

10. Northwest Power and Conservation Council Slide 9 slide 9 Installation Configurations The Good : Room air supply, exhaust air to exterior The Ugly: “Tempered” (garage, unconditioned basement) supply air, exhaust air to exterior The Bad: Room air supply, exhaust air to interior

11. Northwest Power and Conservation Council Slide 10 slide 10 Why “Exhaust to Exterior” Exhaust air temperature is >40 F Exhaust air temperature is >40 F –Whenever ambient temperature is above exhaust air temperature, “COP” of ventilation is above 1.0 Unless home has heat pump, HPWH is “robbing Peter to pay Paul” Unless home has heat pump, HPWH is “robbing Peter to pay Paul” –HPWH increases space conditioning energy use more than it decreases water heating energy use

12. Northwest Power and Conservation Council Slide 11 slide 11 6 th Plan Residential Hot Water Heating Dwelling Unit Supply Curve 2.0 GPM Showerhead Tank Insulation Heat Pump Water Heater Energy Star Clothes Washer (MEF 1.8) Energy Star Dishwasher (EF 65) Wastewater Heat Recovery Energy Star Dishwasher (EF68) Energy Star Clothes Washer (MEF 2.0)

13. Northwest Power and Conservation Council Slide 12 6 th Plan Cost Assumptions EF Water Heater InstallationTotalIncremental 0.90$263$384$648 0.94$318$435$753$105 2.20$877$672$1,549$796 slide 12

14. Northwest Power and Conservation Council Slide 13 6 th Plan Installation Cost Assumptions Share of Installs HPWH Installation Requirement Cost (2006$) 100%Incremental Installation Cost - All Units$32 25% Add condensate pump and longer condensate water line$146 15%Indoor Installations, Space Constrained$329 55%Venting Installation$309 Incremental HPWH Installation Cost $288 Standard Resistance Tank Installation$384 Total HPWH Installation Cost$672 slide 13

15. Northwest Power and Conservation Council Slide 14 6 th Plan HPWH Savings Assumptions EF Annual Use (kWh/yr) Savings 0.9036550 0.943500155 2.2015002000 slide 14

16. Northwest Power and Conservation Council Slide 15 6 th Plan Regional Savings Assumptions Assume “ramp rate” for regional deployment similar to historical national growth in adoption of gas “tankless” water heaters Assume “ramp rate” for regional deployment similar to historical national growth in adoption of gas “tankless” water heaters –Similar barriers »Limited customer & plumber experience with technology »Higher Cost »Higher Efficiency »Different installation requirements slide 15

17. Northwest Power and Conservation Council Slide 16 6 th Plan Assumptions = 12.2 aMW by 2015 Year Implied HPWH PNW Sales Based on Instantaneous gas- fired water heater market growth (Units/year) 6 th Plan Supply Curve Ramp Assumptions (Units/year) 2010 888 1,976 2011 5,695 3,953 2012 10,452 8,894 2013 16,214 13,835 2014 21,574 19,765 Cumulative Total 53,935 48,423 slide 16

18. Northwest Power and Conservation Council Slide 17 Wild Card – How Will New Federal Standards Effect HPWH Adoption? Electric Water Heater Standards Effective April 2015 Electric Water Heater Standards Effective April 2015 –< 55 gal capacity = EF 95 –> 55 gal. capacity = EF 2.0 Gas Water Heater Standars Gas Water Heater Standars –< 55 gal capacity = EF 63 –> 55 gal. capacity = EF 75 slide 17

19. Northwest Power and Conservation Council Slide 18 Distribution of Water Heater Tank Size for New & Existing Single Family Homes Tank CapacityExistingNew Tankless0.0%3.0% 30 -392.7%0.0% 40 - 494.5%0.0% 50 - 5571.0%37.00% 56 - 5911.2%18.0% 60 - 695.7%21.0% 70 - 790.5%2.8% 80- 894.4%18.2% Average Tank Size51.757.8 Share over 55 gal21.8%60.0% slide 18

20. The Math – How Many Houses Could Install HPWH ExistingNewTotal Single Family 2,517,630 137,890 2,655,520 Manufactured Homes 584,135 97,980 682,115 Total Technical Potential Units 3,101,765 235,870 3,337,635 Total Achievable Units 1,550,885 117,940 1,668,825 Assumptions:  Only Single Family and Manufactured Homes Can Technically Install HPWH  Only Half of These Homes Were Assumed to Be Acceptable Targets for HPWH (DHW was outside conditioned space or within short “duct run” to unconditioned space) slide 19

21. Northwest Power and Conservation Council Slide 20 So – Starting in 2015 ExistingNewTotal 20-year Total Units 1,550,885 117,940 1,668,825 Annual Units 129,240 5,900 135,140 Units/year Over 55 gal 25,850 3,540 29,365 6 th Plan Annual HPWH Units in year 2015 21,695  Assumes average DHW lifetime of 12 years so 1/12 of existing stock is replaced each year and 1/20 th of new stock is added each year. slide 20

22. Northwest Power and Conservation Council Slide 21 And Now... The Final Climb Begins! slide 21 Current HPWH Market Share Eckman Retires! 7 th Plan HPWH Market Share