Pilots
Heat Pump Water Heater Load Shifting Pilot
What is the Heat Pump Water Heater Load Shifting Pilot?
As new smart electric appliances replace gas appliances, an impactful way to avoid adding electric load during times of peak demand is to enable these appliances as grid-interactive, which flexes their electricity usage according to grid and customer needs. Heat pump water heaters are well-suited to use their thermal storage capabilities to become a grid resource, because they heat water during low-demand periods and store it for use during high-demand periods.
The Heat Pump Water Heater Load Shifting Pilot promoted heat pump water heater grid-interactivity by engaging contractors working on single family heat pump water heater installations. The pilot team supported contractors as they enrolled their customers in demand response programs at the time of heat pump water heater installation, and in doing so, sought to answer several key questions:
- What type of education and support will most effectively enable contractors to facilitate heat pump water heater grid-interactivity and customer demand response enrollment?
- What are key customer concerns and roadblocks to enrollment in programs, and how can the program team and contractors address them?
- What are the key elements of successful integrated demand-side management programs?
Pilot Strategies
During the three years of its implementation — from January 2022 to November 2024 — the pilot tested multiple tactics for how to best engage with and support contractors around this issue, with the approach changing in response to regulatory developments and incentive program changes.
The pilot team’s work ultimately focused on (1) creating and contributing to a variety of educational resources for contractors, such as training videos, flyers, and instructional guides (2) four contractor surveys to better understand contractors’ evolving understanding of demand response and other demand management requirements, and the types of support that are most useful to them, and (3) one-on-one phone and email support to learn about contractors’ experiences with demand-side management requirements and address areas of difficulty they were experiencing.
Resources
Blueprint for Better Integrated Demand-Side Management Reference Sheet: A best practice guide for those involved in designing, regulating, and implementing integrated demand-side management programs.
Engaging Contractors: A Critical Partner to Realize the Load Shifting Potential of Heat Pump Water Heaters: This conference paper discusses the Pilot team's hypothesis that contractors will be critical market partners in facilitating grid connection during the time of installation, and details the partners and collaboration approaches of this Pilot, including the overarching TECH Clean California Initiative, WatterSaver, the BayREN Heat Pump Water Heater program, and the PG&E Midstream Heat Pump Water Heater Study and Field Test.
What is Integrated Demand-Side Management (IDSM)?
IDSM programs promote energy-efficient technologies with additional demand management measures, such as demand response enrollment.
Key Pilot Findings and Results
Strategic education and focused support can increase contractor understanding of demand response and load shifting. With this support, contractors can be key market actors to facilitate customers’ enrollment in demand response programs. Feedback from post-training surveys was overwhelmingly positive and indicates that contractors have improved their understanding of demand response, grid connectivity, and their importance in increasing electrification and achieving California’s clean energy goals.
To successfully facilitate demand response enrollment, contractors need to evolve their business practices and learn to communicate successfully with customers to emphasize demand response value propositions and address customer concerns. In an August 2024 survey, 75 percent of contractor survey respondents shared they were at least somewhat comfortable explaining demand response to customers.
Simplifying a program’s requirements may reduce contractor confusion while still achieving program goals. Overlapping program requirements — for example, requirements for demand response program enrollment, time-of-use rate schedule enrollment, and time-of-use rate configuration of the heat pump water heater — caused misunderstandings among contractors and customers. Although these requirements can be clarified through one-on-one conversations, simplifying the program design may reduce these support needs and improve overall compliance.
One-on-one support for contractors is a critical aspect of an integrated demand-side management program. Contractors rated one-on-one support discussions with the pilot team as the most helpful program resource. Individual support increases the ability of all companies, including smaller companies with fewer resources, to successfully participate.
Improve efficiency and load-shifting capacity through proper upsizing. The pilot found that, in many cases, the term “upsizing” is used in a way that would more accurately be considered “right-sizing” — i.e., increasing the tank size as compared to the former gas water heater. The pilot proposes a new definition of upsizing for heat pump water heaters: that the California plumbing code’s first-hour rating assumptions for the household (based on bedroom and bathroom quantity) can be met either by just the hot water that is already in the tank, or if needed, with additional water heated by the compressor only. The goal of upsizing defined this way is that the unit rarely, if ever, needs to use its lower-efficiency electric resistance back-up heating system, where present, to meet typical hot water demand.
Steps to Upsize a Heat Pump Water Heater:
The steps to upsize a heat pump water heater are:
- Look at the plumbing code to determine the necessary first hour rating for the home based on the number of bathrooms and bedrooms. For example, for a three bed, two bath house, a water heater with at least a 62-gallon first hour rating is needed.
- When choosing the heat pump water heater, do not look at the first-hour rating on the label. Instead, look at the tank size. Multiply tank size by 0.8, i.e., 80 percent. This resulting value should meet or exceed the required first hour rating found in step 1.
- If space or cost constraints do not allow for the 80 percent calculation, the next best approach is to ensure that the full tank size, or some percent between 80 to 100 meets or exceeds the required first hour rating found in step 1.
Learn More About This Pilot
For more detail, the pilot team created a reference sheet translating two of the pilot’s learnings — specifically, key elements of successful IDSM programs, and common contractor demand response challenges and solutions — into a set of best practices for IDSM program designers, implementers, and regulators, found here.
A complete accounting of the pilot’s learnings and accomplishments can be found in the Final Report.
Our Collaboration with Water Heater Load Shifting Programs
The TECH Clean California team collaborates closely with the water heater load shifting programs that our participating customers must enroll in — i.e., PG&E WatterSaver and SCE SmartShift Rewards. One of the load shifting program teams’ key learnings was that water heater load shifting programs should wait to start controlling the water heater until about four weeks after the customer has their heat pump water heater installed. The WatterSaver and SmartShift teams approach this via an "orientation" period that begins once the customer enrolls. This allows the customer to get used to their new water heater, and if there are bumps in the road, such as a shortage of hot water, it is clear they are not because of the water heater load shifting program.