A Sea Change Is Happening in the Global Water Heating Industry

With a Focus on Decarbonization, Rheem Is Leading the Way

With a sharp focus on reducing carbon emissions, manufacturers are changing the global water heating industry. Rheem—along with distributors, residential and commercial builders and consumers who want environmentally friendly products—is helping to lead the way. From product development to manufacturing, to after-sale service, the shift toward decarbonization is one we’ve been planning for more than a decade.

Governments across the globe are instituting strict carbon emission guidelines for the built environment. Many countries, including those in the EU, have laws to reach carbon neutrality by 2050. Most states in the U.S. have set aggressive carbon reduction targets, with plans for net zero requirements for new construction by 2050. California, as an example, codified their state net zero by 2045 goal this year.

Making water heaters compliant with those regulations means a dramatic shift in the products currently manufactured and sold toward those with much higher efficiency. This requires our industry to innovate in a way and at a speed that is unprecedented. It’s an enormous opportunity for electric and hybrid technologies, with substantial upside for the environment and consumers.

Water heaters account for roughly 14% of a home or building’s energy use. As makers of an essential product to keep businesses and households running around the world, it has been our mission to reduce energy impact and introduce the most efficient products on the market solutions that stand out for their sustainability features.

In late 2021, Rheem earned a gold Edison Award from the Edison Electric Institute for our ProTerra® line of residential heat pump water heaters. The annual awards, which highlight the most innovative new products worldwide, recognized ProTerra for setting a new level of sustainability standards in the plumbing industry. Our ProTerra line is four times more efficient than any electric tank-type water heater available on the market today. The recognition put a spotlight on the future of water heaters.

Last year, only one out of every 100 water heaters we sold were heat pump water heaters. But it is estimated that in just six years, by the year 2028, one out of two water heaters we sell will be heat pump water heaters. That is a major pivot for our industry and one that aligns closely with Rheem’s vision for sustainability and our global sustainability initiative, A Greater Degree of Good™. With a genuine commitment to protecting the environment, aligning with strategic planning and foresight, Rheem is well-positioned to capture a large share of this rapidly growing market.

Rheem is dedicated to an aggressive decarbonization strategy, with goals to reduce the greenhouse gas footprint of our manufacturing operations by 50% and to release a line of products that boast 50% lower emissions by 2025. For a company that produces more than seven million water and air comfort products each year, reducing the use of fossil fuels in favor of greener energy sources is a monumental shift that requires INNOVATION across our business, significant financial INVESTMENT and a commitment to EDUCATION for consumers and our partners.

INNOVATION

For more than a decade, Rheem has been manufacturing heat pumps, solar, smart grid electric and dual-fuel products to help homeowners, businesses and utilities meet efficiency standards without compromising comfort. As the world moves from a gas infrastructure to electricity generated by renewables, these highly efficient water heating systems will play a pivotal role in achieving global decarbonization goals. Heat pump water heaters specifically, which extract heat from the air around the unit to heat the water using 75% less energy, are a proven solution for reducing emissions.

INVESTMENT

Rheem is a global manufacturer and the leading supplier of water heating products in the United States. We are also a leading manufacturer of HVAC products, with a manufacturing footprint on the four continents where carbon emission standards are accelerating the fastest (Europe, Australia, Asia and North America). This localized and global presence puts Rheem in a unique position to lead the industry’s response to decarbonization. We will continue to invest to ensure we meet all decarbonization goals.

EDUCATION

Installing next-generation water heating products that provide greater control over energy and water consumption is one of the best ways for homeowners and businesses to reduce their environmental impact. Many states have started offering incentives to accelerate heat pump water heater adoption as part of their action plan to achieve emission reduction targets. The Inflation Reduction Act, which was signed into law in August 2022, also offers tax credits and rebates to consumers who purchase energy-efficient electric appliances. Both incentive programs can help offset the cost of the product plus installation. Rheem is partnering with local governments, utilities, builders and others on heat pump water heater education to improve the adoption rate among new construction and retrofit markets. We are also engaging hundreds of thousands of plumbers and installers important and trusted influencers for homeowners and end-users through technical training on sustainable products and practices. Empowering all to protect the environment is our goal.

Decarbonization is no longer a trend; it’s a global mandate with aggressive deadlines that will have enormous impact on both our business and the environment. As our industry enters the greatest period of disruption in the last century, Rheem is prepared for the future. We are focused on bringing innovative, low-emission products to market and we are eager to help our customers embrace more sustainable lifestyles. Future generations are counting on us.