The average annual air temperature around the water heater (Tam ) is derived from the location of the water heater. If the water heater is located inside conditioned space, Tam is set to the indoor air temperature (default value of 67.5 °F). A future improvement of the modeling would be to have this default indoor air temperature correspond to thermostat settings. If the water heater is located in the basement, Tam is set to the average of the indoor and outdoor air temperatures (outdoor air temperature taken from the 30-year-average weather tape data for their location, see Section 4.1 Weather Data), otherwise Tam is set to the average outdoor air temperature.