The Consortium for Energy Efficiency (CEE), the nonprofit member-based organization of efficiency program administrators, research organizations, and efficiency advocates throughout the United States and Canada, published updates to the CEE Residential Electric HVAC and Water Heating specifications. These performance requirements serve as the basis of eligibility for federal 25C tax credits up to $2000 enabled by the Inflation Reduction Act, as well as for leading utility financial incentives. The revised levels were approved and authorized by the CEE Board of Directors in October 2024, with effective dates of January 1, 2025.

Water heating and HVAC equipment are the largest residential energy loads, representing immense opportunities for energy savings and grid flexibility. CEE specifications and their associated tiers serve as a pillar of members' decarbonization, affordability, and market transformation goals. 

These new revisions reflect market advancements in efficiency, heating capacity, and the ability for equipment with embedded demand response capabilities to support grid reliability. The specifications are designed to ensure that products recognized by CEE deliver cost-effective energy savings that can provide customer bill savings and ensure comfort.  

“We see great potential in these specifications’ ability to reward leadership by manufacturers and support customer adoption of more efficient and grid flexible equipment when promoted by our members,” says John Taylor, Executive Director of CEE. “The CEE specifications’ citation by the federal tax credit program further amplifies their impact and will help us reach more customers. Program administrators of all types stressed the importance of simplicity, comfort, and increased program participation, which we believe will result from these enhancements.”

Residential Electric HVAC Equipment

CEE residential electric HVAC equipment specifications cover central air conditioners (CACs) and air-source heat pump (ASHP) equipment. Heat pumps use an electric compressor to move heat from one place to another, making them much more efficient than traditional boilers and furnaces. Highlighted updates from this revision include:

• Creating two pathways for eligibility. One pathway for heating-dominated applications and whole home electrification scenarios; the other pathway for cooling-dominated and dual-fuel applications.
• Adding an Advanced Tier for split ASHPs that optimizes for cold climate conditions, consistent with the US Department of Energy DOE Cold Climate Heat Pump Challenge Specification.
• Referencing the industry consensus definition of grid-flexible heat pumps (AHRI Standard 1380) for load management requirements, and requiring this criteria for all tiers beginning in January, 2026.

Residential Water Heating

The primary driver for the residential electric water heater specification revision is to maximize the energy savings and demand flexibility potential of heat pump water heater programs..

The revised specifications include:

• Tax credit requirements are unchanged from 2024.
• Referencing the industry consensus for grid flexible water heaters (AHRI Standard 1430) for automated demand response requirements, and requiring this criteria for all CEE tiers beginning in January, 2026.
• Creating a more stringent Advanced Tier with ≥ 3.30 UEF for split-system and 120V heat pump water heaters that will recognize market leadership by manufacturers.

Residential Room Heat Pumps

About CEE Over the course of the last year, CEE has been working to develop a first-of-its-kind Room Heat Pump specification that enables more equitable electrification and decarbonization. CEE originally developed this initiative in association with New York’s Clean Heat for All Challenge. Room Heat Pumps are reverse-cycle room air conditioners and existing models combine the efficiency of a mini-split into a packaged, portable form factor. These products have the potential to replace room air conditioners, improving upon cooling efficiency while adding efficient heating capabilities. Beyond the notable performance achieved by models that meet the CEE specification, the unique form factor of room heat pumps provides opportunities for renters and multi-family building occupants to have improved access to new efficient technologies.

The scope of the proposed specification includes: 

• Three tiers (Tier 1, Tier 2, Advanced Tier) with increasingly stringent levels of performance that deliver efficiency coupled with adequate capacity relative to lower ambient conditions. Tier 1 sets minimum efficiency levels for qualifying products to sufficiently perform efficient heating and cooling in temperate climates, Tier 2 provides levels that accommodate a broader range of low outdoor temperatures that should perform well in most US and Canadian jurisdictions, and the Advanced Tier specifies levels that can provide even greater capacity and perform in still lower ambient conditions for climates with temperatures consistently below 5˚F.