DOE Minimum Efficiency Standards for Commercial Water Heaters
The Department of Energy’s (DOE) new energy conservation standards for commercial water heaters will go into effect by October 6, 2027*. These new regulations are part of DOE’s efforts to reduce overall energy consumption in the United States.
– UPDATE –
On April 24, 2026, the U.S. Department of Energy (DOE) issued an Enforcement Policy Statement announcing a temporary delay in enforcement of new thermal efficiency (TE) standards for certain commercial gas‑fired water heating products. This action provides an effective one‑year enforcement grace period—from October 6, 2026 through October 6, 2027—during which DOE will not seek civil penalties related to these specific requirements.
Customers can continue to specify and procure non‑condensing products during the enforcement period, providing additional time to plan projects, manage installed base transitions, and adjust specifications. Long‑term planning should still assume a transition to compliant condensing solutions.
A. O. Smith will collaborate closely with customers on order timing, inventory planning, and real‑time communication regarding regulatory or legal developments.
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
State Water Heaters full suite of condensing products that meet the DOE's new standards
DOE-Compliant High-Efficiency Condensing Water Heaters
State Water Heaters has you covered with alternatives to gas-fired models
DOE-Compliant Commercial Hybrid Heat Pump Water Heaters
DOE-Compliant Commercial Electric Tank Water Heaters
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. State Water Heaters 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 periodically review standards. 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.
A. O. Smith has you covered with informational videos , helpful documents to download , and free certification courses at university.hotwater.com