1. Rheem EcoSense Heat Pump Water Heaters January, 2010 1

2. Key Rheem EcoSense HPWH Features & Benefits 50-Gallon model 2.0 Energy Factor! - Saves Money More than twice the efficiency of any standard electric water heater Fast Recovery! Recovers a full tank of hot water 17% faster than a 50 gallon standard electric water heater Easy installation— it’s a drop-in replacement for an old electric water heater with standard connections (side connect) Touch Pad Control -Three operating modes- for top energy efficiency, plus temperature control 21” width fits thru standard attic/access doors ENERGY STAR® rated - Qualifies for federal tax credits and state/utility rebates and incentives 12-Year limited warranty/1-Year in home labor 2 Protected LED panel offers touch control of temperature and efficiency modes

3. Touch Pad Control Choose the Right Efficiency Setting ENERGY SAVER: Extracts warmth from the surrounding air, concentrating the heat, and delivers it to the water. – 2.0 energy factor (EF) – First hour delivery like a standard 50 gallon electric model NORMAL: Use when hot water demands are very high – The heat pump and electric element will operate as needed. – First hour delivery in excess of a standard 65 gallon electric model ELECTRIC HEAT ONLY: Use for temporary operation – Available to ensure hot water availability without operating the heat pump – Reverts back to previous setting (Energy Saver or Normal) after two weeks, if not manually reset by the user TEMPERATURE SETTING – Temperature range: Hot, Normal, and Vacation 3

4. The Rheem EcoSense Advantage Advanced Heat Pump Design – Field proven technology: Rheem HVAC engineers have been designing superior heat pump systems for 30 years Advanced Tank and Components – R-Tech tank protection system Exclusive! Resistored anode extends tank life System matching resistored elements extend element life …only from Rheem EcoSense 4

5. Built in Protection 5 Freeze Protection – Thermistor signals HP module off when air temperature is 40 o F or below - electric elements enabled Overheat Protection – Thermistor signals HP module off when air temperature is 120 o F or above - electric elements enabled Filter Maintenance Protection – Thermistor signals HP module off if air flow is restricted Water Pump Protection – Sensors turn off HP module if there is no circulation – electric elements enabled Heat Pump Module Component Protection – Sensors monitor HP operation and enable electric elements if improper readings are detected Cold Start Protection – Element pre-heat when tank temperature is below 70 o F

6. In “Energy Saver” mode, this water heater’s high efficiency heat pump operates automatically for hot water storage in this sequence: 1. A fan pulls air through the top air filter. 2. Heat in the air is absorbed by eco-friendly refrigerant inside the evaporator coil and cool (dehumidified) air is exhausted. 3. Refrigerant is pumped through a compressor, which increases the temperature. 4. Simultaneously the cooler water from the bottom of the tank is pumped to the top of the appliance, where it circulates through a patented condenser coil. 5. Hot refrigerant transfers its heat to the water inside the condenser coil. 6. Heated water is returned back to the top of the tank. 7. All functions are controlled simultaneously by an advanced circuit board located behind the user touch pad. 8. Condensate drain connection. 9. Backup electric heating elements. 6 How the Heat Pump Works

7. 7 Super Efficient! Rheem EcoSense HP-50ES

8. Installing the Rheem EcoSense Heat Pump 8

9. Select the Right Installation Site Best Home Installation Sites: For optimum performance in any zone, choose a warm location with unconditioned air – Attics, garages, basements (approx. 10x10x10 ft. space). If the location’s temperature stays above 40 degrees, the heat pump can run year round. Installation Zones: For use in all areas of the U.S. – Zone 1: Heat pump will be used 90-100% of the year – Zone 2: Combination heat pump (60%) and electric heating elements (40%) – Zone 3: Combination heat pump (50%) and electric heating elements (50%) 9 Zone 1 Zone 2 Zone 3 Attic Garage Basement

10. 10 Rheem EcoSense GE Steibel Energy Factor2.02.352.5 Rheem made the design decision to go higher performance overall and a with slightly lower EF. Note: When water heater performance is higher (more hot water faster), the homeowner is more likely to leave the unit on the Energy Saver (heat pump) setting permanently, instead of moving to a much lower efficiency mode. First Hour Rating (FHR) 67 gal63 gal78 gal Tank Capacity vs. Hot Water Delivery (%)134% 130% 97% Rheem has the highest heat pump hot water delivery of a 50 gallon product. Note: Rheem standard electric is 67 FHR and the standard Rheem 80 gallon is 88 FHR. HP Operating Temp’s40 o -120 o 45 o -120 o 42 o -108 o Rheem Heat Pump 40 o -120 o Range 100% 93% 66% Rheem’s range of operating temperature means the heat pump can remain on the highest efficiency for the largest percentage of the year, which means the energy efficient heat pump mode can operate longer in cold weather. Diameter 21”22”26” Fits through attic/access doorsYesNoNo Rheem has the smallest diameter. It can fit most existing installations and through narrow access doors. Specifications derived from ENERGY STAR® website, manufacturers’ websites and BuildingGreen.com 10-23-09 Competitive Matrix: Integrated Heat Pump Water Heater

11. Competitive Matrix: Integrated HPWH (continued) 11 Rheem EcoSense GE Steibel Gallon Capacity50 gal50 gal80 gal Rheem offers a popular water heater capacity, which is a drop in replacement. It will fit where larger diameter and larger gallon capacities won’t. Other Rheem capacities will be available in 2010. Sound49 dB (Refrigerator) 63 dB (Hair Dryer) 64.2 dB (Hair Dryer) The Rheem heat pump water heater has whisper quiet operation! (http://www.nwhealth.edu/healthyU/stayHealthy/ear3.html) RefrigerantR-410aR-134aR-134a R-410a does not contribute to ozone depletion Warranty 12 Yrs10 Yrs6 Yrs Rheem offers the highest warranty available for an integrated heat pump water heater. Product AvailabilityAvailableLimitedSpecial Order Rheem started shipping in mid September 2009. Mfg. LocationNorth AmericaAsiaEurope Rheem’s manufacturing will remain in North America. With Rheem’s strong distribution network, product availability is excellent… and predictable! 2010 HP Product IntrosYes!N/AN/A Rheem is continuing to develop the heat pump product line. More products are scheduled for release in 2010. Specifications derived from ENERGY STAR® website, manufacturers’ websites and BuildingGreen.com 10-23-09

12. Support Material Specifications Touch Pad Control Balancing Energy Efficiency & Performance Annual Operating Cost Calculations Heat Transfer Process 12

13. Specifications 13 2.0 EF Energy Saver mode: 67 Gallon FHR and 21 GPH @ 90 o rise Normal mode: 72 Gallon FHR and 23 GPH @ 90 o rise 75-1/2” Height 21” diameter (fits through narrow access doors) User touch pad control 200 lbs. 240V 60hz 22 amps 1 phase Heat pump operating range: 40 o through 120 o F Refrigerant: R-410a Sound 49 dB (quiet!) Two – 2 kw Incoloy stainless steel elements ¾” NPT water inlet, outlet, and condensate connection Top mounted washable filter, snaps on and off, Built-In component protection Designed and manufactured in North America

14. Energy Saver Mode of Operation 14 Energy Saver – This mode provides the greatest energy savings – 2.0 EF – 67 Gallon First Hour Rating – 21 Gallons/Hour* – Recovery Rate The average recovery rate during the recovery of a full tank of hot water at a 90 o temperature rise – 2 hours & 4 minutes – Recovery Time Time to recover a full tank of hot water – Heat pump module operates 45 minutes to heat water – IF after 45 minutes the call for heat continues, electric element is energized

15. Normal Mode of Operation 15 Normal (High Demand Mode) – The high demand mode provides 2 nd greatest energy savings and has increased FHR – 1.5 EF – 72 Gallon First Hour Rating The same FHR as a 65 gallon electric water heater – 23 Gallons/Hour – Recovery Rate The average recovery rate during the recovery of a full tank of hot water at a 90 o temperature rise. – 1 Hour & 59 minutes – Recovery Time The time it takes to recover a full tank of hot water – Heat Pump Module operates 30 minutes to heat water – IF after 30 minutes the call for heat continues, electric element is energized

16. Electric Heat Only - Temporary Mode 16 Electric Heat Only – No Heat Pump Module usage – Operates as a standard electric water heater – Relies only on two 2 kw Incoloy elements – Software controls single or dual element operation – Reverts back to the previous setting (Energy Saver or Normal) after two weeks, unless manually reset by homeowner

17. Balancing Energy Efficiency & Performance 17 2.0 EF More than twice the efficiency of standard 50 gal electric water heaters (.90 EF) 67 Gallon First Hour Rating Matches industry best FHR for standard 50 gal electric water heaters (58-67 gal FHR) 23 Gallon/hr Recovery Rate Exceeds standard 50 gal electric water heaters by 17% (20.7 GPH) 2 Hours & 4 Minute Recovery Period Faster than the time it takes for a standard 50 gal electric water heater to recover a full tank of hot water (2 hrs & 25 minutes) Note: Some competitors designed their units with a lower energy input (wattage) to achieve additional energy savings (ex. 2.3 EF vs. 2.0 EF). The slightly higher EF saves the homeowner only $2.69 per month in operating cost, but significantly decreases hot water delivery performance. Rheem EcoSense chose to provide the homeowner with substantial energy cost savings plus more hot water, faster. The Rheem approach helps ensure the homeowner won’t be tempted to permanently set their heat pump water heater on a less efficient mode to get enough hot water to meet their needs.

18. 18 Annual Operating Cost Calculations 40 Gallon Standard Gas Water Heater – ($12.02*/1000 cubic ft) x (1000 cubic ft/1,028,000 btu) = $.0000116/btu – (41,045 btu/day/.59 EF) x ($.0000116/btu) x (365 days/year) = $294.55 per year 50 Gallon Standard Electric Water Heater – ($.1065*/kw hr) x (12.03 kw hr/day/.90 EF) x (365 days/year) = $519.60 per year 50 Gallon Heat Pump Water Heater – ($.1065*/kw hr) x (12.03 kw hr/day/2.0 EF) x (365 days/year) = $234.82 per year * Current D.O.E. national electricity energy cost estimates Results based on D.O.E. equations for gas and electric water heaters. Gas and Electric energy factors based on NAECA II minimum levels.

19. 19 Heat Transfer Process Compact Helical Design with Counter-flow technology for maximum heat transfer Double-wall inner tube provides isolation of refrigerant from water U.L. AND C.S.A. approved for potable water use These coaxial condensers are designed to remove heat from the refrigerant of heat pump systems for the purpose of heating potable water