Purchasing Energy-Efficient Commercial Gas Water Heaters

On This Page: 

• Find Product Efficiency Requirements
• Make a Cost-Effective Purchase
• Determine When ENERGY STAR Products Are Cost-Effective
• Purchasing Requirements and FAR Contract Language
• Federal Supply Sources and Product Codes
• Buyer Tips: Make Informed Product Purchases
• User Tips: Use Products More Efficiently

The Federal Energy Management Program (FEMP) provides acquisition guidance for commercial gas water heaters, a product category covered by ENERGY STAR efficiency requirements.

FEMP's acquisition guidance and associated ENERGY STAR efficiency requirements apply to commercial gas-fired storage water heaters with an input rate both greater than 75,000 British thermal units (Btu) per hour and less than 4,000 Btu/hr per gallon of stored water. These requirements also apply to gas-fired instantaneous-type units with an input rate both greater than 200,000 Btu/hr and not less than 4,000 Btu/hr per gallon of stored water. In addition, the ENERGY STAR specification includes commercial heat pump water heater units (air-source, water-source, and direct geo-exchange units) with a rated electric power input greater than 12 kilowatts (kW). ENERGY STAR has separate performance requirements for residential water heaters, including residential-duty commercial water heaters.

This acquisition guidance was updated in June 2024.

The U.S. Environmental Protection Agency (EPA) provides commercial water heater efficiency levels and product specification information on its ENERGY STAR website. Manufacturers meeting these requirements are allowed to display the ENERGY STAR label on complying models. Federal buyers can use ENERGY STAR's list of certified commercial water heaters to identify or verify complying models.

With the Clean Energy Rule finalized in Spring 2024, federal agencies must significantly reduce the use of on-site fossil fuels in new and majorly renovated facilities used for federal purposes. From FY 2025 to FY 2029, federal entities must reduce the use of fossil fuels by 90% in facilities that are newly constructed or undergoing major renovation (exceeding a total cost threshold of $3.8 million in 2024 dollars for federally owned buildings). To comply, contracting officers should avoid purchases of commercial fossil fuel-fired boilers. Federal buyers are encouraged to consult the Clean Energy Rule webpage for further guidance. If no technically practicable alternative to a fossil-fueled product can be found that meets the mission requirements of the agency, an agency may obtain guidance, or request technical assistance, or petition for downward adjustment of the fossil fuel reduction target from FEMP by contacting the Clean Energy Rule team.

FEMP has calculated that the required ENERGY STAR-Certified commercial gas storage water heater saves money if priced no more than $464 (in 2022 dollars) above the less efficient model. The best available model saves up to $843. Table 1 compares three types of equipment purchases and calculates the lifetime cost savings of purchasing efficient models. Federal purchasers can assume products that meet ENERGY STAR efficiency requirements are life cycle cost-effective.

An efficient product is cost-effective when the lifetime energy savings (from avoided energy costs over the life of the product, discounted to present value) exceed the additional up-front cost (if any) compared to a less efficient option. ENERGY STAR considers up-front costs and lifetime energy savings when setting required efficiency levels. Federal purchasers can assume ENERGY STAR Certified products and products that meet FEMP-designated efficiency requirements are life cycle cost-effective. In high-use applications or when energy rates are above the federal average, purchasers may save more if they specify products that exceed federal efficiency requirements (e.g., the best available model).

GSA offers commercial gas water heaters through the Multiple Award Schedules: Industrial Products 333414, 332510S, and 332510C.

The DLA ENAC for commercial gas water heaters is DJ.

The UNSPSC for commercial water heaters is 40101826.

All ENERGY STAR Certified gas water heaters are condensing models. When installing a condensing gas water heater in an existing facility, special consideration should be given to condensate drainage, piping, and ventilation systems.

Because ENERGY STAR Certified gas water heaters are condensing, they need a drain line to dispose of condensate. Some combustion byproducts cause this condensate to be acidic, which can be corrosive to certain materials. This acidic condensate does not affect the plastic piping typically used in new construction. However, acidic condensate can damage cast iron piping, which may be present in some existing facilities. In these facilities, you must either replace the drain lines with plastic or some other material immune to the effects of the acid, or install a neutralizer. A neutralizer is a device containing a base material (e.g., limestone chips) that counters the acid and eliminates the corrosive effects of the condensate. In commercial kitchens, cleaning agents used during the dishwashing process neutralize the condensate. A neutralizer is not necessary in this situation as long the condensate line from the water heater is connected downstream from the dishwasher.

Condensing water heaters are not compatible with natural draft vent systems. Condensing water heaters are typically power-vented and include a fan that can exhaust combustion gases up to 60 feet horizontally through plastic pipes. When a standard efficiency gas water heater is replaced with a condensing model, the existing vent system will not work properly for the new water heater.

In new construction, condensing water heaters can be vented horizontally through an exterior wall. The end cap of this exhaust must be above the snow line or other obstructions. The vent also must be sloped toward the water heater so that any condensate formed is directed back toward the drain and does not freeze on the end cap, which could block the exhaust.

When planning the layout of a new commercial kitchen or other facility that requires a lot of hot water, locate the end uses (e.g., dishwashers, sinks) as close to the water heater as possible. Minimizing pipe runs can substantially reduce heat losses through the distribution system. If possible, insulate hot water pipes to further reduce heat losses.

Many states and electric utilities offer rebates or other incentives for the purchase of ENERGY STAR Certified products. Use the ENERGY STAR Rebate Finder to see if your local utility offers these incentives. FEMP's Energy Incentive Program helps federal agencies take advantage of these incentives by providing information about the funding-program opportunities available in each state.

Many new energy consuming commercial gas water heater come equipped with Internet of Things (IoT) sensing components and network connectivity. Making a new purchase or replacement represents a prime opportunity to evaluate the vulnerabilities of your network. All IoT-enabled devices introduce novel exposures to potential data breaches. Building controls and heating, ventilating, and air conditioning systems are no exception. Security can almost never be networked in after the fact, and so it is important to ensure that your networked devices are secure. Also, regularly testing for network vulnerabilities is key. For more information on how to build cybersecure networks of building technologies, consult FEMP’s Energy and Cybersecurity Integration resources and Cyber-Securing Facility Related Control Systems fact sheet.

To save additional energy, install water-efficient appliances and low-flow plumbing fittings (e.g., faucets, pre-rinse spray valves). In addition to reducing energy use, these devices reduce water consumption and its associated costs (e.g., water and sewer charges).

Lawrence Berkeley National Laboratory provided supporting analysis for this acquisition guidance.