The U.S. Department of Energy is proposing efficiency standards it says will save Americans billions a year on the operation of their water heaters and eliminate millions of tons of carbon dioxide emissions.

The proposal announced Friday would mandate heat pump technology in the most common-sized electric water heaters and mandate improved condensing and other technology in fossil fuel-burning units.

The department is mandated by Congress to make periodic updates in efficiency requirements; this is the 18th it has issued so far in 2023. The last update of water heater standards was in 2010.

The agency said it followed recommendations from two major water heater manufacturers, the Consumer Federation of America and a variety of stakeholders as it put together this new proposal. If adopted on the timeline DOE proposes, it would take effect in 2029.

Warming up water for household purposes accounts for about 13% of annual residential energy use.

The actual consumer benefit of the new standard would depend on the cost of fuel or electricity and on the speed of replacement of old technology with new. But DOE estimates that over the course of 30 years, the proposed standards could save Americans $200 billion and reduce CO2 emissions by 500 million metric tons.

That breaks down to a savings of $1,868 over the lifespan of an electric heat pump water heater compared with a traditional electric resistance unit, the department said. Further savings accrue with credits, rebates and other incentives offered through the Inflation Reduction Act.

The rule also would boost minimum efficiency ratings for tankless and storage water heaters that burn oil or gas, again by relying on technology improvements.

In total, DOE estimates the proposed rule would reduce energy used by water heaters by 21% and provide a $2.8 billion-a-year health benefit.