At the beginning of April, Natural Resources Canada finalized Amendment 18 to Canada’s Energy Efficiency Regulations. Despite extensive consultation and clear signals from industry, advocates, and the U.S., the final amendment locks in underwhelming efficiency standards for household water heaters into the 2030s.
While the U.S. Department of Energy has finalized standards (protected by an anti-backsliding provision) requiring that nearly all electric storage water heaters manufactured after May 6, 2029 must be ultra-efficient heat pump water heaters (at least 230% efficient), Canada’s newly finalized rules fall far short (93.5% efficient at most), while adopting the same lengthy timeline.
We encouraged NRCan to align with the U.S. on electric storage water heater standards to ensure a harmonized North American market, save households on their energy bills, and free up electricity for other end-uses without new grid infrastructure. Several major manufacturers also supported this approach.
Amendment 18 finalized modest efficiency improvements for oil and gas storage water heaters as well. While most of the regulations in Amendment 18 come into effect January 1st, 2026, these will not come into force until May 6, 2029 – almost 3.5 years of delay.
Strong water heater standards are among the clearest, lowest-cost ways to cut household emissions and energy bills, especially since water heating is the second-largest home energy use.
Efficiency Canada’s Comments on Canada Gazette, Part I, Volume 158, Number 25: Regulations Amending the Energy Efficiency Regulations, 2016 (Amendment 18)
Suggested citation Riddell, S. 2024. Efficiency Canada’s Comments on Canada Gazette, Part I, Volume 158, Number 25: Regulations Amending the Energy Efficiency Regulations, 2016 (Amendment 18). Efficiency Canada, Carleton University, Ottawa, ON.
August 31, 2024
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This submission constitutes Efficiency Canada’s comments on Natural Resources Canada’s (NRCan) June 2024 pre-publication consultation for Amendment 18 to Canada’s Energy Efficiency Regulations.
Efficiency Canada is the national voice for an energy-efficient economy. Our mission is to create a sustainable environment and better life for all Canadians by making our country a global leader in energy efficiency policy, technology, and jobs. Efficiency Canada is housed at Carleton University’s Sustainable Energy Research Centre, which is located on the traditional unceded territories of the Algonquin nation.
The following comments were submitted directly to the Canada Gazette, Part I, Volume 158, Number 25: Regulations Amending the Energy Efficiency Regulations, 2016 (Amendment 18) webpage during the 70-day consultation period ending August 31, 2024.
General comments
The potential contribution of appliance and equipment energy performance standards to putting Canada on a path toward a net-zero economy by 2050 is often overlooked. Improving energy efficiency was recently identified in the IEA’s Net Zero Roadmap: A Global Pathway to Keep the 1.5 °C Goal in Reach report as one of the four technologies available today that can deliver more than 80 per cent of the emissions reductions needed.1 Given the timelines associated with proposing, consulting on, and finalizing new or amended standards, governments should be mindful not to waste any opportunity to move toward stronger energy efficiency standards.
With the proposed Amendment 18, Canada has missed an opportunity to strengthen important standards, particularly major home appliances, including dishwashers, refrigerator-freezers, clothes washers, and clothes dryers. Though NRCan proposed new minimum energy performance standards (MEPS) for those categories equivalent to 2019 ENERGY STAR® performance levels, as part of Amendment 17 for 2023 enforcement, they were removed from the amendment after industry push-back.2 They were then included in the pre-consultation for Amendment 18 for 2024 enforcement.3 However, due to NRCan aligning with the U.S. DOE for these categories, compliance dates for the updated efficiency standards vary from 2027 to 2030 (when the latest U.S. appliance standards take effect), depending on the appliance.4 Canada should follow through on its 2019 commitment to making ENERGY STAR-level efficiency mandatory for all new major home appliances (dishwashers,5 refrigerator-freezers, clothes washers and dryers) as an interim standard before harmonizing with the U.S. DOE’s upcoming standards.6 ENERGY STAR appliances already capture a significant market share, and ENERGY STAR-level efficiency standards could achieve substantial energy and consumer savings while acting as a stepping-stone to harmonizing with U.S. standards between 2027-2030.
Additionally, we urge NRCan to strengthen the proposed efficiency standards for water heaters. The weak proposed standards for gas and oil water heaters are not compatible with the 40 to 45 per cent emissions reductions target in Canada’s 2030 Emissions Reduction Plan.7 Electric storage water heaters (ESWHs) is one of the only categories where NRCan has not proposed aligning with the U.S. DOE — This is a mistake. Since 2015, the U.S. has been a leader in ESWH efficiency standards, requiring all with a volume greater than 55 gallons (208 litres) employ heat pump technology, of which a typical model on the market can achieve efficiencies over 300 per cent.8 Our colder climate has been a justification for Canada lagging on ESWH efficiency standards, however the Northwest Energy Efficiency Alliance (NEEA) has developed a “Northern” climate (Climate Zones 4 or colder) specification for heat pump water heaters to ensure efficiency is maintained at colder temperatures and maintains a qualified product list of models that work well in all climate zones of Canada.9 NRCan should make aligning with the U.S. on ESWH efficiency standards a top priority. In anticipation of Amendment 18 to Canada’s Energy Efficiency Regulations, Efficiency Canada published the report Advancing Canadian Appliance and Equipment Standards in March 2024.
Proposed amendments
(a) Introduce products into the regulations with associated requirements for energy efficiency standards, testing standards, verification, and provision of information
Air compressors
We support the proposed introduction of air compressors as a regulated energyusing product and harmonizing energy efficiency and test standards with those of the United States.
Faucets
We support the proposed harmonization of efficiency standards for metering faucets with current U.S. standards and with the state of California for nonmetering faucets.
Line-voltage thermostats
We support the proposed incorporation of the Canadian Standards Association (CSA) standard CSA C828-19 for line voltage thermostats.
Pool pumps
We support the proposed harmonization with the current U.S. efficiency and testing standards for pool pumps.
Showerheads
We support the proposed harmonization with California on showerhead efficiency standards and test procedures.
(b) Expand the scope of some currently regulated products and introduce or update energy efficiency and testing standards
Room air conditioners (Division 2, Subdivision A)
We support the proposed harmonization with the U.S. on efficiency standards and test procedures for room air conditioners.
Additionally, window (room) heat pumps are a nascent industry (particularly in Canada). Nevertheless, cold-climate window heat pumps that are now available in the U.S.11 could be an essential energy and cost savings tool for Canadian renters, who would otherwise buy a window or portable air conditioner and/or have inefficient and costly oil or electric resistance heating that a cold-climate window heat pump unit could mostly offset. Policies supporting their manufacture in, or import into, Canada should be explored.
Large air conditioners (Division 2, Subdivision B)
We support the proposed incorporation of the current U.S. testing standards and harmonization with tier 2 of the U.S. energy efficiency standards for large air conditioners.
Single package central air conditioners (Division 2, Subdivisions D)
We support incorporating the new U.S. testing standard and new energy efficiency metrics for single-package central air conditioners.
Heat pumps are among the best technologies for reducing energy use and GHG emissions from space and water heating. A policy that could significantly increase heat pump adoption in Canada would be for the federal government to require every central air conditioner to be a heat pump.12 The two appliances are fundamentally the same in that they transfer heat between indoor and outdoor spaces. With a couple of additional components, the heat pump can do so in both directions, providing heating and cooling.
A Vancouver, B.C. by-law requiring new central air conditioners in detached homes to also provide low-carbon heating (an electric heat pump) came into effect on January 1, 2023.13 Given the slight price difference between equally efficient air conditioners and heat pumps and the impressive energy savings from the highly efficient heating in addition to the cooling provided, requiring air conditioners to provide both heating and cooling (a heat pump) is a quick win policy towards building decarbonization.
The Cool Way to Heat Homes report estimated that installing heat pumps instead of residential central air conditioners in Canada starting in 2025 would produce $12.6 billion of net benefits by the end of 2035.
Split system central air conditioners (Division 2, Subdivisions F)
While we support strengthening efficiency standards for split system central air conditioners, the proposed standards have higher minimum efficiency standards (measured in SEER2) for split system central heat pumps than central air conditioners for all product types. Due to the lower upfront cost of less efficient equipment, unequal standards for air conditioners and heat pumps further disadvantage heat pumps, an essential technology for decarbonizing Canada’s buildings. NRCan should require that split system central conditioners and heat pumps with the same cooling capacity (Btu/hr) have the same minimum SEER2 requirements.
Portable air conditioners (Division 2, Subdivision I)
We support the proposed introduction of efficiency standards for portable air conditioners and harmonization with the U.S. DOE for efficiency standards and test procedures.
Large heat pumps (Division 3, Subdivision C)
We support the proposed harmonization with the U.S. testing and efficiency standards for large heat pumps.
Single package central heat pumps (Division 3, Subdivisions E)
We support the proposed incorporation of the new U.S. testing standard, new energy efficiency metrics, and strengthened energy efficiency standards for singlepackage central heat pumps, aligning with the U.S.
Split system central heat pumps (Division 3, Subdivisions G)
We support the proposed incorporation of the new U.S. testing standard, new energy efficiency metrics, and strengthened energy efficiency standards for split system central heat pumps, which align with the U.S.
Gas furnaces (Division 4, Subdivision A)
We support the proposed addition of a definition for “space-constrained” to replace “through-the-wall” furnaces.
Space heating is the largest source of energy use and greenhouse gas emissions in Canadian buildings.14 ENERGY STAR has proposed sunsetting certification for residential furnaces and air conditioners effective December 30, 2024.15 The letter to stakeholders detailing the proposal states “the need for the ENERGY STAR label to serve as a market signal moving […] towards energy efficient heat pumps”.
The federal government could also follow British Columbia’s lead by requiring a minimum efficiency of 100 per cent for space and hot water heating in 2030.16 The 2030 timeline is important given the 15-20 year lifespan of furnaces and boilers, along with Canada’s net-zero by 2050 commitment.17
Electric water heaters (Division 6, Subdivision A)
In Canada, water heating is second only to space heating in terms of residential energy use (17.2 per cent vs. 63.6 per cent) and greenhouse gas (GHG) emissions (21 per cent vs. 62 per cent).18 Strong efficiency standards for water heating are essential for reducing energy bills and emissions. HPWHs use up to 70 per cent less electricity than standard electric resistance water heaters.19
Water heaters are one of the few categories of energy-using products for which NRCan is not proposing harmonizing with the United States,20 with Canada’s colder climate, a common rationale. The Northwest Energy Efficiency Alliance (NEEA) has developed a Cool Climate Efficiency Test Procedure for HPWHs as part of their Advanced Water Heating Specification, which ensures efficiency is maintained in “Northern” climates (Climate Zones 4 or colder).21 NEEA maintains a qualified products list of HPWHs that meet these specifications, a significant number of which are available in Canada.22
Currently, in the United States, every new electric storage water heater over 55 gallons (208 litres) must employ heat pump technology, and from May 6, 2029, the threshold will be lowered to every electric storage water heater over 35 gallons (76 litres), excluding those that are grid-enabled.23 NRCan should align with the U.S. Department of Energy’s (DOE) finalized efficiency standards for all electric storage heaters when they take effect in 2029. According to the U.S. DOE, replacing an electric resistance water heater with a HPWH meeting the new standards would save consumers, on average, approximately $1,800 USD (~$2400 CAD) on utility bills over the lifespan of the appliance.24
We support the introduction of the uniform energy factor (UEF) efficiency metric for electric water heaters.
Gas-fired storage water heaters (Division 6, Subdivision B)
We support incorporating the current U.S. testing standard and updating the energy efficiency metric for gas-fired storage water heaters. However, it is disappointing that the proposed MEPS remain unchanged, given the significant contribution of water heating to residential energy use and GHG emissions. For a fifty-gallon gas storage water heater, the proposed regulations would require a minimum uniform energy factor (UEF) of .56 (56 per cent efficiency).25
Gas storage water heaters can achieve an approximately 10 per cent efficiency improvement with inexpensive improvements such as adding flue dampers.26
ENERGY STAR requires a UEF of 0.81 for a 50-gallon capacity gas storage water heater, achievable with condensing technology.27 There are currently 26 ENERGY STAR-certified gas storage water heater models currently available on the Canadian market.28
The federal government should require ENERGY STAR efficiency levels for gas storage water heaters as soon as possible and follow British Columbia’s lead by requiring a minimum efficiency of 100 per cent for water heating by 2030, essential for meeting Canada’s net-zero by 2050 targets.
Oil-fired water heaters (Division 6, Subdivision C)
Fuel oil is Canada’s highest emitting and most expensive water heating source. With clear cost and emissions savings from switching off oil, NRCan should set a date when new and replacement oil-fired water heaters can no longer be sold and installed in Canada. Given the high financial and environmental costs of fuel oil and the many alternatives, particularly heat pump water heaters, oil water heating should be phased out before 2030.
Gas-fired instantaneous water heaters (Division 6, Subdivision D)
We support the proposed incorporation of the current U.S. testing standard for gas-fired instantaneous water heaters.
Instantaneous gas water heaters are about 30 per cent more energy efficient than gas storage water heaters, as storage water heaters must maintain the temperature of the water they store.29 However, instantaneous gas water heaters emit significant unburnt methane, a potent GHG and indoor air pollutant, as their burners turn on and off every time hot water is consumed.30 NRCan should introduce limits to the unburnt methane that an instantaneous water heater can emit to reduce GHG emissions and protect occupant health.
General service lamps (Division 7, Subdivision B)
We support the proposed strengthening of minimum energy performance standards (MEPS) for general service lamps (GSL) to 45 lumens/watt (lm/W), aligned with the current U.S. standard, as well as consolidating existing regulatory categories of general service incandescent, modified spectrum incandescent, compact fluorescent (CFL), and general service incandescent reflector lamps into the broader GSL category.
However, it is disappointing that Canada is adopting the 45 lm/W standard at least three years after the U.S. did so in 2022.31 The U.S. has issued a final rule on energy conservation standards for GSL ranging from 83.3 – 195.4 lm/W for common lumen lamps, depending on the product class, with compliance starting July 25, 2028.32 The U.S. DOE estimates the new standards represent a 17 per cent energy savings relative to the current U.S. MEPS. NRCan should align with the U.S. DOE standards for GSLs in 2028.