DOE Energy Efficiency Standards for Commercial Water Heaters
The U.S. Department of Energy (DOE) has increased the federal energy efficiency standards for commercial water heaters, which are part of the DOE's efforts to reduce overall energy consumption in the United States.
The updated standards will go into effect on October 6, 2026, but the DOE recently announced that it will delay enforcement of the standards through October 5, 2027.
– UPDATE –
The U.S. Department of Energy (DOE) has announced a one-year enforcement delay for new efficiency standards affecting certain commercial gas-fired water heaters. From October 6, 2026, through October 5, 2027, the DOE will not seek civil penalties for qualifying non-compliant products while ongoing litigation is resolved.
Key Updates
The efficiency standards will take effect on October 6, 2026, but DOE will temporarily suspend enforcement of civil penalties.
Enforcement is delayed until October 6, 2027, for qualifying commercial gas-fired water heaters.
What This Means for American Water Heaters
During the enforcement period, American will continue to manufacture, sell, and ship non-condensing commercial gas water heaters. Previous order cutoff dates have been removed, and orders will continue to be accepted until further notice.
What This Means for Our Customers
Customers can continue specifying and purchasing non-condensing commercial water heaters through the enforcement window, allowing more time to complete current projects, manage inventory and replacement planning, and prepare for the long-term transition to high-efficiency condensing water heaters
American’s Commitment
American Water Heaters remains committed to helping customers navigate changing regulations while delivering reliable commercial water heating solutions. We will continue to monitor DOE guidance and legal developments and provide updates as they become available.
Download American's official announcement here.
What You Need To Know
Gas Storage Standard
Min TE = 95%
Reduced Max Standby Loss
Gas Instantaneous Standard
Min TE = 96%
Residential-Duty Gas Storage Standard
UEF = 0.9297
Commercial Electric Tank
No Changes
TE = Thermal Efficiency
American's full suite of condensing products that meet the DOE's new standards
DOE-Compliant High-Efficiency Condensing Water Heaters
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American has you covered with alternatives to gas-fired models
DOE-Compliant Commercial Electric Tank Water Heaters
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Impacts of the New Standards
The new standards:
...will require commercial water heaters to incorporate condensing technology to increase energy efficiency
...are projected to save businesses and operators $140 million per year in operating costs
...will significantly reduce carbon and methane emissions
Commercial Water Heater Energy Conservation Standards
Gas-Fired Storage
Current Standard:
Min TE = 80%
New Standard:
Min TE = 95%
Current Standard:
Max SL = (Q/800)+(110 x √Vr) Btu/h
New Standard:
Max SL = 0.86×[(Q/800)+(110 x √Vr)] Btu/h
Gas-Fired Instantaneous (Tankless)
Current Standard:
Min TE = 80%
New Standard:
Min TE = 96%
Max SL = N/A
TE = Thermal Efficiency; SL = Standby Loss (Btu/h); Q = Rated input (Btu/h); Vr = Rated storage volume (gal)
Residential-Duty Commercial Water Heater Energy Conservation Standards
Residential-Duty Commercial Gas-Fired Storage
>12 kW and ≤58.6 kW and ≤2 gal
Current Standard:
Min TE = 80%
New Standard:
Min TE = 96%
Max SL = N/A
UEF = Universal Energy Factor
Electric Instantaneous (Tankless)
Current Standard:
All Draw Patterns
UEF=0.80
New Standard (No Change):
All Draw Patterns
UEF=0.80
Max SL = N/A
Everything You Need to Know About Commercial DOE Standards
On October 6, 2027*, the Department of Energy’s (DOE) new minimum efficiency standards for commercial water heaters will go into effect. American is here to make it easy.
*Effective date for DOE Minimum Efficiency Standards for Commercial Water Heaters is subject to change.
Still Have Questions?
The Energy Policy and Conservation Act, as amended (‘‘EPCA’’), prescribes energy conservation standards for various consumer products and certain commercial and industrial equipment, including Commercial Water Heating (‘‘CWH’’) equipment. EPCA also requires the U.S. Department of Energy (‘‘DOE’’) to review standards periodically. In this final rule, DOE is adopting amended energy conservation standards for CWH equipment.
The DOE has created an Industrial Decarbonization Roadmap that outlines a clean energy strategy to reduce gas (GHG) emissions in the American industrial sector.
These changes will have the most direct impact on new commercial construction projects.
Beginning on October 6, 2027*, only high-efficiency (condensing) gas commercial water heaters can be manufactured or imported into the United States.
Water heater professionals may still purchase commercial water heaters manufactured or imported before October 6, 2027*, from existing retail or wholesale inventory.
The new standards for residential (consumer) water heaters do not go into effect until May 6, 2029, but if you are considering a new water heater or looking at a new house, you’ll find helpful information on our Info Center section.
*Effective date for DOE Minimum Efficiency Standards for Commercial Water Heaters is subject to change.
The time to plan for the changes is now.
American has you covered with helpful documents 
and free certification courses at university.americanwaterheater.com