The Federal Energy Management Program (FEMP) provides acquisition guidance for residential electric storage water heaters, a product category covered by ENERGY STAR efficiency requirements. Federal laws and requirements mandate that agencies purchase ENERGY STAR Certified products or FEMP-designated products in all product categories covered by these programs and in any acquisition actions that are not specifically exempted by law.

FEMP's acquisition guidance and associated ENERGY STAR efficiency requirements for residential electric storage water heaters is technology neutral, meaning that one technology is not favored over another.

This acquisition guidance was updated in June 2020.

Find Product Efficiency Requirements

The U.S. Environmental Protection Agency (EPA) provides residential electric storage 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 residential electric storage water heaters to identify or verify complying models. As of June 2020, the version 3.3 ENERGY STAR product specification for residential water heaters was not published. Please check the ENERGY STAR webpage on residential water heaters for updates on the version 3.3 specification.

Make a Cost-Effective Purchase: Save $1,968 or More by Buying ENERGY STAR

FEMP has calculated that the required ENERGY STAR Certified residential electric storage water heater saves money if priced no more than $1,968 above the less efficient model. The best available model saves up to $2,669. Table 1 compares three types of product purchases and calculates the lifetime cost savings of purchasing efficient models for households with typical water use. Federal purchasers can assume products that meet ENERGY STAR efficiency requirements are life cycle cost-effective.

Table 1. Lifetime Cost Savings for Efficient Residential Electric Storage Water Heater Models
PerformanceBest AvailableENERGY STARLess Efficient
Energy Factor3.752.000.91
Annual Energy Use (kWh)8661,6243,528
Annual Energy Cost$76$142$314
Lifetime Energy Cost$802$1,503$3,471
Lifetime Cost Savings$2,669$1,968======

Note: Monetary and energy use values in this table are rounded to the nearest whole unit.

View the Performance and Model Assumptions for Table 1


Energy Factor: A metric used to compare the energy conversion efficiency of residential appliances and equipment.

Annual Energy Use: Based on the test method referenced in 10 Code of Federal Regulations (CFR) 430, Subpart B, Appendix E, for a unit producing 20,075 gallons of hot water per year.

Annual Energy Cost: Calculated based on an assumed electricity price of $0.087/kWh, which is the average electricity price at federal facilities.

Lifetime Energy Cost: The sum of the discounted values of annual energy cost with an assumed product life of 13 years. Future natural gas price trends and a 3% discount rate are from Energy Price Indices and Discount Factors for Life-Cycle Cost Analysis – 2020: Annual Supplement to NIST Handbook 135 and NBS Special Publication 709 (NISTIR 85-3273-35).

Lifetime Cost Savings: The difference between the lifetime energy cost of the less efficient model and the lifetime energy cost of the ENERGY STAR model or best available model.


Calculated based on the June 2020 ENERGY STAR Certified Products List. More efficient models may be introduced to the market after FEMP's acquisition guidance is posted.


Calculated based on June 2020 ENERGY STAR efficiency levels. Federal agencies must purchase products that meet or exceed ENERGY STAR efficiency levels.


Calculated based on typical products used in non-federal applications.

There are additional cost savings associated with waste heat recovery systems. Drain-water, or greywater, heat recovery systems capture the energy from waste hot water—such as showers and dishwashers—to preheat cold water entering the water heater or going to other water fixtures. Energy savings vary depending on individual household location and hot water consumption.

Determine When ENERGY STAR Products Are 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).

Residential Water Heaters Cost Calculator

Users who wish to determine a product's cost-effectiveness for their application may do so using the Energy Cost Savings Calculator for Electric and Gas Water Heaters.

Claim an Exception to Federal Purchasing Requirements

Products meeting ENERGY STAR or FEMP-designated efficiency requirements may not be life cycle cost-effective in certain low-use applications or in locations with very low rates for electricity or natural gas. However, for most applications, purchasers will find that energy-efficient products have the lowest life cycle cost.

Agencies may claim an exception to federal purchasing requirements through a written finding that no FEMP-designated or ENERGY STAR Certified product is available to meet functional requirements, or that no such product is life cycle cost-effective for the specific application. Learn more about federal product purchasing requirements.

Incorporate Federal Acquisition Regulation Language in Contracts

These mandatory requirements apply to all forms of procurement, including construction guide and project specifications; renovation, repair, energy service, and operation and maintenance (O&M) contracts; lease agreements; acquisitions made using purchase cards; and solicitations for offers. Federal Acquisition Regulation (FAR) Part 23.206 requires agencies to insert the clause at FAR section 52.223-15 into contracts and solicitations that deliver, acquire, furnish, or specify energy-consuming products for use in federal government facilities. To comply with FAR requirements, FEMP recommends that agencies incorporate efficiency requirements into technical specifications, the evaluation criteria of solicitations, and the evaluations of solicitation responses.

Find Federal Supply Sources

The federal supply sources for energy-efficient products are the General Services Administration (GSA) and the Defense Logistics Agency (DLA). GSA sells products through its Multiple Awards Schedules program and online shopping network, GSA Advantage!. DLA offers products through the Defense Supply Center Philadelphia and online through FedMall (formerly the U.S. Department of Defense eMALL). Products sold through DLA are codified with a 13-digit National Stock Number (NSN) and, in some cases, a two-letter Environmental Attribute Code (ENAC). The ENAC identifies items that have positive environmental characteristics and meet standards set by an approved third party like FEMP and ENERGY STAR.

The United Nations Standard Products and Services Code (UNSPSC) is a worldwide classification system for e-commerce. It contains more than 50,000 commodities, including many used in the federal sector, each with a unique eight-digit, four-level identification code. Manufacturers and vendors are beginning to adopt the UNSPSC classification convention and electronic procurement systems are beginning to include UNSPSC tracking in their software packages. UNSPSCs can help the federal acquisition community identify product categories covered by sustainable acquisition requirements, track purchases of products within those categories, and report on progress toward meeting sustainable acquisition goals. FEMP has developed a table of ENERGY STAR and FEMP-designated covered product categories and related UNSPSC numbers.

Residential Electric Storage Water Heater Schedules and Product Codes

GSA offers residential electric storage water heaters through Schedule 51 V, Category 639 001 and Schedule 56, Category 563 28.

The DLA ENAC for heat pump water heaters is DK.

The UNSPSC for residential electric storage water heaters is 40101825.

Buyer Tips: Make Informed Product Purchases

When comparing different types of residential electric storage water heaters, it is important to consider the household's anticipated water usage. As shown in Table 2, the cost savings resulting from ENERGY STAR Certified products being more efficient than other models are increased with more water usage. Buyers can use this table for supplemental information when replacing standard residential electric storage water heaters with more efficient residential electric storage water heaters.

Table 2. Comparison Of Lifetime Cost Savings for ENERGY STAR Residential Electric Storage Water Heater Models at Different Water Use Levels
Water UsageVery SmallLowMediumHigh
Daily Water Usage (gal/day)10385584
Annual Energy Savings (kWh)3881,4752,1353,261
Annual Energy Cost Savings$34$129$186$285
Lifetime Cost Savings*$359$1,366$1,976$3,019

Note: Monetary and energy use values in this table are rounded to this nearest whole unit.

*Compared to less efficient models with the same draw.

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 appliances, including residential electric storage water heaters, 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 HVAC 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 existing FEMP guidance and case studies.

User Tips: Use Products More Efficiently

Heat pump water heaters, especially IoT-enabled and smart units, have advanced controls and interface modules which allow users to easily toggle the unit on and off, switch modes, and change temperatures. When used properly, these features can deliver additional savings. Below are brief descriptions of the different operating modes:

  • Efficiency: Only the heat pump operates regardless of demand for hot water. The electric resistance elements are not used except when the air temperature is too cold (45°F or less) or too hot (110°F or greater). Within this air temperature envelope, the unit’s energy factor will be 2.0 or higher, and accordingly energy use will be the lowest. Note that there may be periods when hot water demand is not met. Without the use of electric resistance elements, recovery times will be longer and FHRs lower. In smaller households or households that spread hot water use throughout the day, this mode will provide sufficient amounts of hot water in the most efficient manner.
  • Electric Resistance: The heat pump is shut off and the unit functions like a conventional water heater by using only the electric resistance elements. The energy factor in this mode will be around 0.90, so it should be used sparingly. To limit time spent in this mode, some products automatically reset to previous settings within a week or two. This mode is useful during the winter if the exhaust air makes the space too cold.
  • Hybrid: A combination of efficiency and electric resistance modes. The general concept is to maximize heat pump use and minimize electric resistance element use to match the hot water output of standard electric water heaters. Hybrid mode, which has an energy factor of 2.0 or greater, is the default setting for most heat pump water heaters and should meet hot water demand while using substantially less energy than standard electric water heaters.
  • High Demand: For higher than average usage (e.g., when hosting out of town guests), the electric resistance elements are used more, so the heat pump water heater can recover more quickly. More energy is used to satisfy the higher demand for hot water. Not all products have this mode.
  • Vacation: Used during periods of extended absences when the water heater sits idle. The water temperature is allowed to drop well below the set point to minimize standby losses. Any standby losses are made up with the heat pump so energy use is minimized. Typically, the user inputs the number of days away. Approximately 12 hours before this period ends, the heat pump water heater is reset to its previous mode to heat the water prior to user return.

Set heat pump water heaters to the mode that best meets your hot water demand, which is typically efficiency or hybrid. Other modes, like vacation or high demand, are very useful in specific situations. Due to its low efficiency and high operating cost, electric resistance mode should only be used when necessary.

Vapors from gasoline, paint thinner, and some other products are extremely flammable and can easily ignite. Do not use or store any flammable liquids or highly combustible materials near heat pump water heaters. The electrical contacts used in heat pump water heaters can ignite vapors and cause explosions or fires that result in property damage, injury, or death. In addition, vapors from products like bleach, fabric softeners, and detergents can be corrosive and damage heat pump water heaters. Do not use or store any corrosive products near heat pump water heaters. This could be problematic when water heaters are located in utility rooms that also contain clothes washers and dryers.

Unlike standard products, heat pump water heaters have a filter that must be cleaned regularly. Some models have an alarm that lets the owner know when to perform this maintenance. Check the owner's manual for more information on when and how to clean the filter.

For most residential applications, set the temperature at 120°F. Under certain conditions, Legionella pneumophila, the bacteria known to cause Legionnaires Disease, can grow in water heaters. The Unified Facilities Criteria (UFC), the master specification used by DOD, requires users to "set service water heater (SWH) storage temperature set point for no less than 140°F (60°C) to limit the potential for growth of Legionella pneumophila." At this water temperature, bacteria can survive for less than a minute. Water temperature this high poses a risk of scalding, especially for young children and the elderly. Because of this, the UFC requires a "balanced-pressure-type tempering valve" to be installed downstream of the service water heater storage tank to provide anti-scalding protection. For residential applications, set the temperature on this device, also known as a mixing valve, to 120°F.

Do not wrap heat pump water heaters with insulation blankets. These products are well insulated and the blankets could impede airflow into or out of the units, which reduces efficiency and could void the warranty.

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