Bay Area Finalizes Zero-NOx Water Heater Rule Starting 2028
The Bay Area air district finalized its zero-NOx water heater rule, effective 2028 with exemptions. Costs, savings and who is exempt are covered.
San Francisco Bay Area air regulators have finalized a rule that limits pollution from home water heaters, according to Canary Media. The board’s vote last week sets the start date at 2028, a year later than first planned, and the rule includes exemptions that about half of Bay Area installations are expected to qualify for.
The Bay Area Air District board first passed zero-nitrogen-oxides (NOx) standards for new home water heaters and space-heating systems in 2023. The water-heater measure is now settled. The space-heating rule is not, and the board is due to discuss it next month.
How the board voted
Two motions failed before the final vote: one to delay further action and one to hold a vote on repealing the rule entirely. Of the 17 board members present, 15 voted for the amended rule and one abstained.
Sam Fishman of the nonprofit San Francisco Bay Area Planning and Urban Research Association said the outcome leaves no further chance to roll the rules back. He also said the approach could serve as a model for other regulators. California, Maryland and a handful of other states are exploring similar standards, per the report.
Who can still install a gas water heater
Regulators wrote in exemptions to address affordability. Three groups of property owners may keep installing gas water heaters:
- low-income households
- owners of small water heaters for which no heat-pump option exists
- owners with space or electrical constraints
Owners of multifamily buildings, who may need to plan system upgrades years ahead, have until 2033 before they must switch.
What it means for costs
Price is the biggest obstacle to heat-pump water heaters. The air district puts the average cost of replacing an old gas unit with a new gas one at about $3,600, versus around $7,100 for a heat-pump model. Some homes would also need extra work, such as a new electrical line or changes to a utility space.
Jetson Home, a home-electrification startup, told Canary Media it expects the average Bay Area installation of a 50-gallon unit to cost about $4,500 next year. California also has incentives worth hundreds to thousands of dollars for qualified homeowners, including 0% state-backed financing, which can make the heat-pump version the cheapest choice. Readers comparing fuel types can find more in this comparison of heat pump and gas running costs.
Estimates of operating savings differ. The air district expects a household with a paid-off water heater to save $40 to $50 per year on utility bills. The think tank RMI estimates $360 per year for most households. RMI attributes the gap to its inclusion of a change in California’s electricity rate structure that makes electrification more cost-effective, especially for low-income customers.
Why it matters: health and air quality
In the Bay Area, home to more than 7 million people, gas appliances emit more smog- and particulate-forming NOx than the region’s passenger vehicles, according to the district. Most of the home emissions come from furnaces and water heaters. Greg Nudd, the district’s deputy executive officer of policy, said the pollution causes up to 85 premature deaths and 15,000 asthma attacks in the region each year, and that eliminating it would bring health benefits valued at $1.1 billion per year.
Napa County supervisor and board member Joelle Gallagher said the 2023 vote was a commitment to stop home appliances from being one of the region’s largest NOx sources.
Opposition and support
The Silicon Valley Business Alliance, the National Association of Residential Property Managers and the Business and Housing Network opposed the rule, as did fossil-fuel companies. A political action committee funded by Chevron, PBF Energy Western Region, Phillips 66 and Marathon Petroleum spent about $60,000 on the mayoral reelection of El Cerrito Mayor Gabe Quinto, a board member who opposed the zero-emission standard. Quinto was not reelected.
A property owner from Pacifica told the board that landlords do not have unlimited money and asked how they could pay for upgrades while keeping rents low.
Supporters included city leaders from Berkeley, Oakland, Palo Alto and San Jose, along with physicians, high school students, environmental and public health groups, and the California Air Resources Board.
In Southern California, opposition and cost concerns have held up similar rules, although that region’s air district has adopted a clean-heat rule for light-industrial and commercial heaters.
Source: Canary Media
