DOE Minimum Efficiency Standards
The Department of Energy (DOE) sets national minimum energy efficiency standards for commercial and consumer (residential) water heater and State Water Heaters is committed to leading our industry in compliance.
Achieving the goal of net-zero greenhouse gas (GHG) emissions means appliance manufacturers like State Water Heaters must continuously innovate to meet and exceed the Department of Energy's new efficiency standards for commercial and residential (consumer) water heaters.
All commercial water heater manufacturers will be required to meet new minimum efficiency standards on October 6, 2026.
All water heater manufacturers will be required to meet new minimum efficiency standards for residential applications by May 2029.
Why Are Regulations Changing?
The Energy Policy and Conservation Act, as amended (“EPCA”), prescribes energy conservation standards for various consumer products and certain commercial and industrial equipment, including consumer water heaters. EPCA also requires the U.S. Department of Energy (“DOE” or “the Department”) to periodically determine whether more stringent standards would be technologically feasible and economically justified, and would result in significant energy savings.
In this final rule, DOE is adopting amended energy conservation standards for consumer water heaters. It has determined that the new and amended energy conservation standards for these products would result in significant conservation of energy, and are technologically feasible and economically justified.
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 periodically review standards. In this final rule, DOE is adopting amended energy conservation standards for CWH equipment.
You will need to file a 5695 to receive the tax credit for your water heater purchase.
**State Water Heaters recommends using a professional tax consultant**
State's Qualified Manufacturer Code is: A5X5
The Qualified Manufacturer (QM) code is a designation used by the U.S. Internal Revenue Service (IRS) and other regulatory bodies to identify manufacturers that meet specific criteria, typically in relation to tax credits, deductions, or benefits associated with energy-efficient or clean energy products.
**State Water Heaters recommends using a professional tax consultant**
The requirement for a QM code has become more prominent due to recent legislation, particularly under the Inflation Reduction Act of 2022 (IRA). This law introduced and expanded various clean energy tax incentives, and as part of this, the IRS began to require more manufacturer-level reporting and qualification to prevent fraud and ensure that only eligible products and manufacturers benefit from these incentives.