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Department of Energy

Regulatory & Energy


Star Changes

2/15/15

2014 Rinnai America Corporation PROPRIETARY and


CONFIDENTIAL

Key Messages

2/15/15

2014 Rinnai America Corporation PROPRIETARY and


CONFIDENTIAL

Rinnai Meets All Efficiency


Standards

.96

.82

.82

Since Rinnai tankless units already meet the


minimum DOE standards of .82, this change does
not impact our current Rinnai product offering

Every Rinnai Tankless Water Heater Already


Meets New DOE Requirements
2/15/15

2014 Rinnai America Corporation PROPRIETARY and


CONFIDENTIAL

Rinnai TWH vs. Tank Efficiency


.82

.70

No longer ENERGY STAR qualified

ENERGY STAR qualified

ENERGY STAR will create a separate category for TWH and


require all TWH to be .90 to receive ENERGY STAR qualification
ENERGY STAR states that this will have less than a 2% impact on sales

All Rinnai Ultra Series Condensing Water Heaters will be ENERGY


STAR Qualified
Non-Condensing will no longer be ENERGY STAR qualified ---yet will have a higher energy efficiency rating than an ENERGY
STAR qualified tank - 18% more efficient then the minimum
tank requirement

Every Rinnai Tankless Is Still More Efficient Than A


Tank
2/15/15

2014 Rinnai America Corporation PROPRIETARY and


CONFIDENTIAL

Size Impact
In order to increase energy efficiency, 30-50 gallon
tank water heaters will likely increase in diameter,
in some cases 2 or more, to accommodate more
insulation to reach the higher required efficiencies.
In space constrained applications where a 50
gallon tank is being replaced, it may be necessary
to downsize to a 40 gallon tank because the larger
50 gallon tank may not fit.
Rinnais already sleek design is not impacted
by the new regulations and Rinnais compact
design makes it possible to locate the unit in many
locations, including places where new, larger tanks
wont fit!

Tank To Tankless Conversation Opportunity


Especially In Space Constrained Replacement
Opportunities
2/15/15

2014 Rinnai America Corporation PROPRIETARY and


CONFIDENTIAL

Price

Rinnai
No price increase

Closing the gap on cost


of tank vs tankless

Tanks - Significant
price increases

Tank costs will increase significantly in fact some manufacturers have


already announced price increases in the 14-25% range. This will give
the more compact Rinnai tankless water heaters increased opportunity
to displace tanks and narrow product cost deltas
Gas tanks above 55 gallons need to go to condensing technology. This
requires an electrical outlet, new venting, as well as a condensate line.
The overall cost to install will rise dramatically over 300% to the
consumer
Tank
Electric
tanks
above 55 gallon
will becomeaccelerates.
heat pump technology
to
tankless
conversion
There

is no longer a price difference with large water


users.
2/15/15

2014 Rinnai America Corporation PROPRIETARY and


CONFIDENTIAL

HERS & LEED Benefits


Tankless Water heaters improve HERS and LEED
Ratings due to increased energy and water
efficiency

The Home Energy Rating System (HERS)


Index is the industry by which a home's
energy efficiency is measured. Its also
the nationally recognized system for
inspecting and calculating a home's
energy performance.

LEED, or Leadership in Energy &


Environmental Design, is a green
building certification program that
recognizes best-in-class building
strategies and practices. To receive
LEED certification, building projects
satisfy prerequisites and earn points
to achieve different levels of
certification. Prerequisites and credits
differ for each rating system, and
teams choose the best fit for their
project.

Improve Home Values with HERS and LEED


Ratings

2/15/15

2014 Rinnai America Corporation PROPRIETARY and


CONFIDENTIAL

Title 24 - California
Title 24 regulates and governs the design and construction of
buildings in California concerning Electrical, Mechanical, and
Plumbing codes.
Mandated Requirements for New Construction:
A 120V electrical receptacle that is within 3 feet from the
water heater
A Category III or IV vent, or a Type B vent with straight
pipe between the outside termination and the space
where the water heater is installed
A condensate drain that is no more than 2 inches higher
than the base of the installed water heater, and allows
natural draining without pump assistance
A gas supply line with a capacity of at least 200,000
Title
24 Mandates Several Requirements That Make The
Btu/hr
Tankless Installation Easier Because The Location Is Prepared
For High Efficiency Products Approx. 70% Of The Install Cost
Already Done!
The Rest Of The Country Generally Follows Californias Lead.
2/15/15

2014 Rinnai America Corporation PROPRIETARY and


CONFIDENTIAL

Standards & Policy Changes


Summary

2/15/15

2014 Rinnai America Corporation PROPRIETARY and


CONFIDENTIAL

Department of Energy
Changes

Changes take effect April 16, 2015


New energy efficiency mandates will require
higher Energy Factor (EF) ratings on most all
residential gas, electric, oil and tankless gas
water heaters.
The changes will have an impact not only on
how they will need to be manufactured but also
on how and where they can be installed.

2/15/15

2014 Rinnai America Corporation PROPRIETARY and


CONFIDENTIAL

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DOE Impact to Rinnai - Gas


Gas Storage Water Heaters
Volume

Current
Federal
Minimum

Federal
Minimum
from 2015

114L
30gal)

.61

.63

151L
40gal)

.59

.62

190L
50gal)

.58

.60

246L
65gal)

.55

.75

284L
.53
.74
Gas
75gal)
Tankless Water Heaters

Since Rinnai tankless units already meet


the minimum standards of .82, this change
will have no direct impact on the Rinnai
offering.
With the 30-50 gallon storage tanks most
likely increasing in diameter, in some cases
2 or more, this will give Rinnai compact
tankless water heaters increased
opportunity to displace more tanks.
This will also increase the cost to
manufacture the storage tank (estimated
at $20-$50), narrowing the cost delta
between tank and tankless.

With tanks above 55 gallons needing to go


to condensing technology combined with
Federal Minimum from
0.82
the need to install an electrical outlet, new
2015
venting as well as a condensate line,
overall cost to install will rise
dramatically.a great opportunity for
Source(s): Charts (DOE) / Sales data (2013
BRG)
2014 Rinnai America tankless!
Corporation PROPRIETARY and
2/15/15
11

Current Federal Minimum

0.62

CONFIDENTIAL

DOE Impact to Rinnai - Electric

Similar to gas storage tanks, 30-50 gallon electric storage tanks


most likely increasing in diameter, this should give Rinnai
compact tankless water heaters increased opportunity to displace
more tanks.
With the minimums nearly doubling, forcing a shift to heat pump
technology, the opportunities for the more economical tankless
water heaters will grow.
The option of going to (2) 40 gallon storage tanks to meet the
demand would also play favorably into the more economical
tankless water heater solution.
Again as a point of reference, in 2013 there were 265,000
residential electric tanks larger than 50 gallons sold.

urce(s): Sales data (2013 BRG) / Charts (DOE)


2/15/15

2014 Rinnai America Corporation PROPRIETARY and


CONFIDENTIAL

12

Energy Star 3.0 Changes


Changes take effect April 16, 2015
Per their Guiding Principles, Energy
Star is revising their criteria in
response to DOE changes in the Federal
minimum efficiency standards.

2/15/15

2014 Rinnai America Corporation PROPRIETARY and


CONFIDENTIAL

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Energy Star Changes

Electric
Storage

Gas
Storage

Gas
Tankles
s

2/15/15

2014 Rinnai America Corporation PROPRIETARY and


CONFIDENTIAL

14

Energy Star Timeline


January 1, 2015

All new product submittals will need to meet Version 3.0


requirements to qualify for an Energy Star rating.
Products certified/listed prior to this date can be listed
utilizing the ENERGY STAR Version 2.0 requirements and
can continue to bear the ENERGY STAR logo until April 15,
2015.

April 16, 2015


Any product manufactured and labeled ENERGY STAR
must be certified to the Version 3.0 requirements.
Due to the increase to a .90 standard, Rinnai will
discontinue use of the Energy Star logo on noncondensing product by this date.
Any product manufactured prior to April 16, 2015 that
bears the ES2.0 logo can still be sold until depletion.
2/15/15

2014 Rinnai America Corporation PROPRIETARY and


CONFIDENTIAL

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ES3.0 Impact to Rinnai

Similar to the changes being made by the DOE, the increased


standards for Energy Star for both the electric and gas storage
tank water heaters should lead to increased opportunities for the
more compact, more efficient tankless water heaters.

This will most likely accelerate the growing trend towards the
tankless condensing technology.

Confusion in the marketplace? With the increase of the TWH


minimum to .90 to receive an Energy Star rating, our noncondensing units will no longer bear the Energy Star logo, even
though these units are still significantly more efficient than a .67
40 gallon storage tank that WILL bear an Energy Star logo!

Rinnai and its energy company partners will be reviewing how to


best combat this misconception and reposition ourselves
accordingly.

EVERY TANKLESS IS STILL MORE EFFICIENT THAN A BASE Energy Star 3.0 TANK
2/15/15

2014 Rinnai America Corporation PROPRIETARY and


CONFIDENTIAL

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Title 24 Changes
The California Code of Regulations
(CCR) Title 24 references state
regulations that govern the design and
construction of buildings and facilities
as well as energy conservation.
2013 standards went into effect on
July 1, 2014

2/15/15

2014 Rinnai America Corporation PROPRIETARY and


CONFIDENTIAL

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Title 24 Impact to Rinnai


The use of Rinnai tankless water heaters is a great
option to meet the overall Title 24 energy
compliance needs.
Rinnais Circ-Logic, when used in conjunction with
an on-demand system, is seen by 2013 T24
standards as the most efficient method of
recirculation. In many cases the use of tankless
water heaters actually helps make up the energy
hit incurred by using recirculation.
The 2013 edition of Title 24 eliminates several
market barriers by ensuring the water heater
installation location is prepared for high efficiency
water heating products. This reduces the difference
between standard and high efficiency installations

2/15/15

2014 Rinnai America Corporation PROPRIETARY and


CONFIDENTIAL

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