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What's New for Manufacturers

Draft Rules and Guidelines now available

The Northwest Energy Efficiency Alliance (NEEA) is pleased to announce the release of the Hot Water Innovation Prize Draft Rules and Guidelines, requesting written comments and questions be submitted to by 11:59pm PDT on July 24, 2024.

Manufacturers are invited to attend a webinar on June 25 at 10am PDT/1pm EDT to learn more about the Draft Rules and Guidelines from contest administrators. Register now for the Manufacturer Webinar.

About the Hot Water Innovation Prize

Affordable split system HPWHs are the future

The US Department of Energy (US DOE) recently issued a final rule for water heater efficiency regulations that go into effect in 2029. From that point forward, all water heaters over 35 gallons and all medium- and high-draw water heaters sold in the US must have efficiency levels that can only be achieved with HPWHs.

Water heaters 35 gallons and smaller with low and very-low draw patterns are allowed to remain electric resistance for practical reasons. Space and location constraints represent challenges to installing integrated HPWHs in certain dwelling types. Research found that the solution to these constraints is a split system HPWH.

The Hot Water Innovation Prize intends to reward manufacturers that develop innovative split system HPWHs and bring the technology to market. Three product categories are included in the contest:

  • Indoor: an indoor tank with a separately housed condenser-evaporator system that operates at indoor air temperatures.
  • Outdoor temperate climate: an indoor tank and separately housed compressor-evaporator unit suitable for a temperate outdoor climate.
  • Outdoor cold climate: an indoor tank and compressor-evaporator unit suitable for an outdoor cold climate.

NEEA is demonstrating its commitment to this energy-efficient technology by sharing in the risk, investment, and reward that will come from market fruition by administering this multi-staged contest and funding significant components of the Prize:

  • Phase A, Manufacturer Qualification: $0 awarded
  • Phase B, Project Plan Submission: $17,000 to $20,000 per product with up to $120,000 in NEEA award funds
  • Phase C, Working Prototype Submission: $80,000 per product with up to $400,000 in NEEA award funds
  • Phase D, Product Launch: still under development with co-sponsors but anticipated to include, but is not limited to, cash, marketing, and utility incentives

The market opportunity is significant, given the estimated market size of 1 million units per year with tremendous growth opportunity in other split system applications. The U.S. energy savings opportunity is estimated at 6 quads over 30 years, equating to 100 million metric tons of Co2e greenhouse gas savings.

Additionally, these split system HPWHs improve equity by bringing energy-efficient water heating and savings to multifamily dwellings, disproportionately occupied by lower-income families and households of color.

Would your organization like to be involved?

NEEA is actively seeking manufacturers interested in entering product(s) as well as co-sponsors to support funding at each stage.

Interested? Sign up for updates by emailing with your contact information.

About Hot Water Solutions

Hot Water Solutions is an initiative of the Northwest Energy Efficiency Alliance (NEEA) working to accelerate the adoption of heat pump water heaters in the Northwest by providing resources, tools and support to increase sales and installations of heat pump water heaters.

NEEA is an alliance of more than 140 utilities and energy efficiency organizations working on behalf of more than 13 million energy consumers. NEEA is dedicated to accelerating both electric and gas energy efficiency, leveraging its regional partnerships to advance the adoption of energy-efficient products, services and practices.

Since 1997, NEEA and its partners have saved enough energy to power more than 700,000 homes each year. As the second-largest resource in the Northwest, energy efficiency can offset most of our new demand for energy, saving money and keeping the Northwest a healthy and vibrant place to live.

What are Tiers?

Energy efficiency levels and features of electric hybrid water heaters vary by product tier. Higher tier products have greater efficiency and more advanced product features.

The higher the energy factor, the more efficient the water heater.