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Scope 1  ·  2.3.3

Water Heating

Eliminating direct Scope 1 emissions from fossil fuel combustion used for domestic hot water (DHW) and process water heating by transitioning to high-efficiency electric alternatives. Heat pump water heaters (HPWHs) are the primary technology, offering 3–4x the efficiency of resistance or gas-fired units.

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Self-Assessment

Select where your organization currently operates and where you want to get to. There is no obligation to reach "Leading Org." — choose the target that is right for your business context and investment capacity.

📍 Current Level
🎯 Target Level
Select your current and target levels above to map your assessment on this initiative.
Fundamental
Market Standard
Above Average
Leading Org.

Technology

  • Conventional gas-fired storage water heaters or boilers
  • Basic temperature controls and hot water recirculation pumps
  • Assessment of water heating fuel mix and consumption by building

Process

  • Auditing hot water demand by end use and time of day
  • Identifying insulation and distribution losses in hot water systems
  • Evaluating water heating as part of broader building gas consumption baseline

Financing

  • Internal capital for like-for-like replacements at end of equipment life
  • Utility rebates for high-efficiency gas water heaters accessed on a per-unit basis

Technology

  • Fundamental Technologies +
  • Heat pump water heaters (HPWH) for domestic hot water in commercial buildings
  • Condensing gas water heaters as high-efficiency interim option where electrification is not yet feasible
  • Solar thermal pre-heating systems reducing gas water heater load

Process

  • Developing a water heater replacement schedule aligned with equipment end-of-life
  • Assessing electrical panel capacity and load requirements for HPWH deployment
  • Evaluating solar thermal feasibility based on roof availability and hot water demand profile

Financing

  • IRA Section 25C and 179D tax credits for heat pump water heater installations
  • Utility heat pump water heater rebates (up to $1,750/unit under IRA) accessed

Technology

  • Market Standard Technologies +
  • Commercial-scale heat pump water heaters or centralized heat pump boiler systems
  • Thermal storage (hot water tanks) to shift heating load to off-peak or high-renewable periods
  • Integration with BMS for demand response-enabled load shifting

Process

  • Integrating water heating electrification into broader building decarbonization plan
  • Participating in utility demand response programs via thermal storage load shifting
  • Tracking water heating Scope 1 reductions as part of building-level emissions inventory

Financing

  • Third-party ownership and financing for large-scale commercial HPWH systems
  • Demand response incentive revenue from thermal storage flexibility used to offset equipment costs

Technology

  • Above Average Technologies +
  • Fully electrified hot water system integrated with heat recovery from refrigeration, data centers, or HVAC
  • Heat pump district heating serving multiple buildings from centralized plant
  • Real-time optimization of hot water production based on renewable energy availability and grid carbon signal

Process

  • Achieving zero Scope 1 emissions from water heating across entire portfolio
  • Publishing water heating decarbonization as component of verified net-zero building certification (LEED Zero, ILFI Zero Carbon)
  • Sharing heat recovery and thermal storage data with utility for grid services participation

Financing

  • Bundled financing of water heating, HVAC heat pumps, and building envelope as integrated electrification package
  • Revenue from heat recovery optimization credited against utility costs in performance contract

Related Pathways

← All Pathways 1.3.1 HVAC 1.2.5 Solar Thermal