South Dakota Cities Find Success With Water Heater Programs

April 15, 2022

by Paul Ciampoli
APPA News Director
April 15, 2022

The cities of Volga and Howard, S.D., are finding success with water heater programs, with customers in both cities taking advantage of rebates on water heaters offered by Heartland Consumers Power District.

Volga and Howard offer Rheem Marathon water heaters for sale at the local utility.

Heartland began offering rebates to residential and commercial customers in 2015 for installing electric water heaters with a lifetime warranty. Marathon water heaters are the most popular brand fitting that description.

The program was developed because it was seen as a win-win: the customer had an efficient water heater with a lifetime warranty and the utility saw an increased electric load. They are also a great fit for a load management system.

Currently, Heartland offers a $200 rebate for the purchase of a water heater 50 to 79 gallons. For water heaters 80 gallons and larger, a $400 rebate is available.

Since Heartland began offering rebates on water heaters, customers in both Volga and Howard have qualified for a proportionately large number of rebates.

Heartland provided rebates for the installation of 291 water heaters from 2015 through 2021. Of those heaters installed, 89 were in Howard and 76 in Volga. The installations in those communities represent 56% of total installations, with 30% in Howard and 26% in Volga.

The city of Volga has been selling Marathon water heaters as far back as 2010.

The city offers both 50- and 85-gallon models, offering discounts to the customer on both. Fifty-gallon water heaters are offered at a price of $768.50, a discount of $368.50 from the city’s cost to purchase. With the $200 rebate from Heartland, the customer pays $568.50. The 85-gallon water heaters are sold for $1,165.50, which includes a discount of $365.50. After the rebate, the final cost to the customer is $765.50.

The city attributes the success of the program mostly to word-of-mouth. While the information is available on the city’s website, they don’t actively promote it.

To make it as convenient as possible, the city will deliver the water heater at no extra cost.

To get the discounted pricing, the customer must have the water heater hooked up to the city’s load management system. This helps keep the city’s peak demand down, which keeps the city’s costs down.

City Electric Superintendent Chad Collins says the program is worth continuing because minimal time is taken by city staff to run it. The city orders water heaters as needed, more when they know a new development is in the works. Because the tanks are so efficient, they don’t get complaints about them being controlled through load management.

Howard has also been selling Marathon water heaters for over ten years. The city originally started the program with the idea that it was a good customer service — since customers purchase both water and electricity from the city, efficient water heaters seemed like a good product to sell at a discount.

Like Volga, the city of Howard doesn’t advertise the Marathon program. Word-of-mouth is the main advertising tool. Local plumbers are aware of the program so when they get a call from someone needing a new water heater, they refer them to the city.

Including the rebates offered by Heartland, Howard sells the water heaters for about half price. A 50-gallon heater costs the purchaser $487.77 after rebate while an 85-gallon model costs $576.

In order to qualify for the discounted pricing, the water heater must be hooked up to the city’s load management system.