Heat Pump Water Heater

Most homes still use fossil fuel or an inefficient electric system for water heating.  However, many people are now selecting super-efficient heat pumps to replace their aging systems.  Heat pumps can be three to four times as efficient as the older technologies and are often the best option for low operating cost & low impacts on climate.

Cost Range

$3,500 - $5,500

About the technology

Is it New?: Not really — heat pumps have been around for years. For example, your refrigerator is one, and air conditioners are also heat pumps. However, the widespread application to home water heating is somewhat recent in many areas.

How it Works: Heat pumps use electricity to move heat from one place to another, instead of creating the heat directly. This is what makes them so efficient when compared to conventional heating systems.  

Applicable Types of Heat Pumps: Various types of heat pumps are available to match a home’s particular needs.  For example, some draw heat from the ground, some from well water, and some (the great majority) from the ambient air.  Additionally, some are designed to just supply domestic hot water (such as for showers, etc.) and others also supply hot water for home heating through radiators or underfloor heating. 

Economics: Heat pumps are generally more expensive to install than a conventional system.  In many areas, however, incentives are available that can defray this additional cost. Additionally, you can often save money on your energy bills going forward, especially if you’re switching from heating with electricity, propane/LPG, or oil.   

Environment: Heat pumps are a great way to reduce your carbon footprint.  Their excellent efficiency, combined with the fact that they don’t burn fossil fuels, often lets them cut greenhouse gas emissions by 75% or more.  Plus, as grid-supplied electricity becomes cleaner, the percentage reduction will grow over time.

Frequently Asked Questions (FAQ)

1. What is a heat pump water heater (HPWH)?

Heat pump water heaters use electricity to move heat from surrounding air to the water tank water instead of heating the water directly. This process makes them very efficient — three to four times more energy efficient than standard electric water heaters — and can significantly cut water heating costs in many cases. Heat pump water heaters have tank capacities similar to standard models, with the same range of temperature adjustments.

2. What types of HPWHs are available?

Heat pump water heaters generally fall into two categories – unitary and split-system models. Both use storage tanks, unlike the tankless water heaters that are sometimes used in homes. Unitary systems are “drop-in” units that have approximately the same shape as a conventional tank water heater, but are somewhat taller to accommodate the heat pump. The split systems consist of an indoor storage tank and an outside unit with a compressor (and associated equipment) that captures heat from the outside air. Split systems require additional plumbing between the indoor and outdoor units.

3. Can a HPWH function in any climate?

Yes, they can, but you need to consider the type of HPWH and where it’ll be located.  Most HPWHs function well if the temperature in the area they’re located remains above freezing the great majority of the time.  In colder climates this can be the case in many basements, in many garages, and certainly in closets inside the house.  If the temperature becomes too cold for the heat pump to operate efficiently, most HPWHs have backup resistance heating elements that can provide the needed hot water, but with greatly reduced efficiency.  It should also be kept in mind that a HPWH will cool the area in which it’s located and this could result in increased heating bills.  Some split HPWH systems, where the compressor unit is located outside, can operate in heat pump mode even down to very low temperatures (but at a reduced efficiency).  In such situations you wouldn’t have to worry about cooling your conditioned space during winter. 

4. How much hot water is available for the household?

Heat pump water heaters come with different tank sizes. The most common sizes currently on the market are 50, 65, and 80 gallon units. After being depleted of hot water, HPWHs (while operating in their efficient, heat pump mode) take longer to recharge than conventional fossil-fueled and electric water heaters.  Some professionals suggest replacing your old water heater with a somewhat larger HPWH to compensate for this.  For example, you might replace a conventional 50 gallon water heater with a 65 or 80 gallon HPWH.

5. What are the advantages of using a HPWH?

Heat pump water heaters use a proven energy-efficient technology. If you are switching from an electric water heater, a HPWH can reduce your water heating costs by up to 70%. If replacing a natural gas water heater, you’ll likely reduce your monthly water-heating costs, but the savings may not be substantial (depending on the energy prices in your area). Pairing the HPWH with a rooftop solar system can generate substantial savings when compared with a conventional water heater. Also, there’s an environmental advantage to using a HPWH.  If a water heater fueled by natural gas, propane, or fuel oil is replaced with a HPWH powered by clean electricity, your carbon footprint is greatly reduced.

6. Is a tankless electric water heater more efficient?

No. Tankless electric water heaters can be at most 100% efficient since they directly heat the water with electricity. A HPWH just moves heat (instead of creating it) and can be effectively 300-400% efficient.

1. How much does a HPWH cost?

The purchase price of a heat pump water heater is higher than the cost of a conventional electric or fossil-fueled water heater, but utility rebates, tax credits, and promotions can significantly reduce the purchase price. Plus, the unit will generally have lower operating costs, cutting your monthly bills right away. Numerous factors can affect the installed price, including geographic location, installation complexity, model selected, and local labor costs.

2. How much can I save on energy costs with a heat pump water heater?

It depends on a number of factors, especially the type of water heater you’re switching from and the energy prices in your area. If you’re replacing an electric water heater, you can cut your water heating costs by up to 70%. If replacing a natural gas water heater, you’ll likely reduce your monthly water-heating costs, but the savings may not be large. If replacing propane or fuel oil as your water heating fuel, your savings can be substantial. Pairing the HPWH with a rooftop solar system can generate very large savings since the solar power will be less expensive.

1. What are the steps needed to install a HPWH?

If you’re replacing an electric water heater with a unitary HPWH, the process is generally pretty straightforward. As with any unitary HPWH, a drain line would need to be installed to handle the condensate from the heat pump.  When switching from a fossil-fueled water heater, an electrician may need to run a 240V line from the main electrical service panel (or a sub-panel) to where the HPWH is installed. However, HPWHs that run on 120V power are becoming more available, so this should become somewhat less of a problem in the future.     Regardless of the type of water heater being replaced, a split HPWH requires additional work since an outdoor component must be installed as well as the indoor component. 

2. Where can I install a HPWH?

Heat pump water heaters can be installed in a variety of locations, from an unheated garage or basement, to a heated utility room, to an indoor closet. With a unitary HPWH, the compressor is located just above the storage tank, making it noisier than a conventional water heater.  This must be considered for any indoor (closet) location.  These HPWHs also release cold air as they capture heat from their surroundings, which can be helpful during the summer and a problem during the winter.  Split HPWHs don’t present the same issues as indoor installations since the noise and cool air are associated with the outdoor component of the water heater.  However, split HPWHs require additional plumbing to connect the indoor and outdoor components and are generally more expensive.

3. What is the recommended tank size?

A normal rule of thumb is the use of a 50 gallon tank for 3 people or fewer and an 80 gallon tank for 4 or more people in the household.  However, the optimal size depends a lot on the water usage patterns of the household.

1. What maintenance does a HPWH require?

Unlike conventional water heaters, heat pump water heaters use an air filter that needs to be cleaned periodically to ensure efficient operation. Other maintenance needs are similar to those of standard tank water heaters that operate on electricity or fossil-fuel.

1. Can I save on carbon emissions if I switch to a HPWH?

Yes, it will reduce your carbon footprint.  The amount of the reduction depends on the carbon intensity of the electricity used to power your HPWH and the energy source (such as natural gas, electricity, etc.) you’re switching from.  If you add rooftop solar at the same time, the carbon footprint of running a HPWH is drastically reduced.

1. How do I operate a HPWH?

Heat pump water heaters are more interactive than conventional water heaters. Most models feature a control panel that allows homeowners to select water temperature and operation mode. Some are WiFi connected and come with a smartphone app. The app lets you control the HPWH and examine energy consumption patterns that can then be used to optimize the usage.

2. What is the warranty on a HPWH?

Major manufacturers of heat pump water heaters typically offer 6-year or 10-year warranties on their products.

1. What types of incentives are available?

Many utilities around the country offer rebates for heat pump water heaters. In addition, state- and county-level incentives are also sometimes available.