Water heaters are on the list of appliances mandatory for EU energy labelling, but this has not been implemented pending appropriate test standards. The objective of this project is to develop a Domestic Electrical Storage Water Heater (DESWH) which will meet the label requirements’ best possible rating in the suggested, mandatory EU EcoDesign scheme which will enter into force in 2013 . With the labelling system in place, only DESWHs in class A and B will be allowed on the market. NONE of the existing DESWHs would today meet these requirements . The voluntary CECED target lies between the D- and E–rated appliances, behind the more stringent US MEPS . The analysis made for EC DG Energy on energy efficiency recommends support of R&D activities with particular focus on improved insulation and intelligent control systems. This project will reduce the heat loss with more than 40% compared with today’s products with its commercial insulation technology, by developing an aerogel based insulation solution. The DESWH will also have an integrated temperature control regime with the the same life length as the DESWH of 25 years. To compensate for the increase in production cost, we will explore and develop an innovative production method for the inner tanks, where deep drawn steel parts are glued together. As making it possible to introduce less expensive material qualities, to reduce material thicknesses and to avoid the costly and energy consuming welding process, this will reduce production costs by 30%. With the EcoWaterHeater, the customers will be offered a product with a unique life-cycle cost and the smallest ecological footprint among water heaters in Europe.