The Homeowner's Handbook to Heat Pump Water Heaters

The Homeowner’s Handbook to Heat Pump Water Heaters

When considering a new water heater, the options can seem overwhelming. Yet, one choice stands out for its efficiency and eco-friendliness: the heat pump water heater. This article delves into everything you need to know about these innovative devices, ensuring you’re well-informed before making a decision.

What Are Heat Pump Water Heaters?

Heat pump water heaters (HPWHs) are on the cutting edge of water heating technology. Unlike traditional models that generate heat directly to warm water, HPWHs transfer heat from the surrounding air into the water in the tank. This process is not only more energy-efficient but also environmentally friendly. It’s like how a refrigerator works, but in reverse, pulling warmth from the air and using it to heat water.

These water heaters are ideal for climates where the ambient air temperature remains between 40°F and 90°F year-round. They can be installed throughout the home, including basements and garages, providing enough air circulation space.

How Heat Pump Water Heaters Work

The principle behind a heat pump water heater is relatively straightforward. In the case of a refrigerator, heat is extracted from the interior and expelled into the surrounding room. Conversely, a heat pump water heater pulls heat from the surrounding air and then transfers it—at a higher temperature—into the water stored in its tank. This method of heating water is what makes HPWHs exceptionally energy-efficient.

How Do Heat Pump Water Heaters Work?

There are two main types of heat pump water heating systems available: stand-alone units that come as integrated systems with a built-in water storage tank and backup resistance heating elements and retrofit systems designed to work with existing conventional storage water heaters.

Installation Requirements

HPWHs require electricity to operate, specifically, a 240-volt electrical connection. This requirement may necessitate an electrical system upgrade for some homeowners, adding to the initial investment. However, the efficiency of these units means they use less electricity over time compared to traditional electric water heaters, contributing to overall energy savings.

For optimal performance, heat pump water heaters must be installed in locations that maintain temperatures within the 40º–90ºF (4.4º–32.2ºC) range throughout the year. Additionally, they require a minimum of 1,000 cubic feet (28.3 cubic meters) of air space around the unit to ensure proper air circulation. The air that passes over the evaporator can either be exhausted back into the room or vented outdoors.

It’s important to note that HPWHs are less efficient in colder environments, as they tend to cool the space in which they are installed. However, installing them in areas with excess heat, such as a furnace room, can significantly boost efficiency.

HPWHs are not limited to heating water. Some systems are designed to provide heating, cooling, and water heating all in one. These air-source heat pump systems draw heat from the outdoor air during winter and from indoor air in the summer, making them particularly effective in warm climates due to their ability to remove heat from the air.

For those interested in geothermal solutions, geothermal heat pumps draw heat from the ground during winter and indoor air during the summer for heating and cooling. A desuperheater component can be added to these systems to heat water using the superheated gases from the heat pump’s compressor. This setup can provide a significant portion of a household’s hot water needs, especially in the summer when the system operates more frequently.

Heat Pump Water Heater Operating Costs

Initial costs for heat pump water heaters are higher than those for traditional electric or gas water heaters. However, the annual operating costs tell a different story.

These details, prominently displayed on the yellow Energy Guide label found on every new water heater, clearly compare different types of water heaters, including traditional electric and gas models and more efficient hybrid options.

Annual Operating Cost: This figure represents how much you can expect to spend annually to operate the water heater. The operating cost for a typical 50-gallon electric water heater exceeds $400 annually. In contrast, propane or natural gas models, though slightly cheaper to operate at around $300 a year, still carry significant operating expenses. However, the game changes with hybrid water heaters. These appliances, leveraging heat pump technology alongside traditional electric resistance, operate at just above $100 annually — substantially reducing energy costs.

First-Hour Rating: This rating indicates the volume of hot water the unit can produce in an hour, factoring in the recharge time or the time it takes for the water to heat up again. It’s a crucial metric for households with high hot water demand. Gas models, known for their quick recharge times, boast a first-hour rating of approximately 86 gallons for a 50-gallon tank. On the other hand, hybrid heat pump water heaters (HPWHs) have a slightly lower first-hour rating, around 65 gallons, due to their marginally slower recharge rate. However, they still outperform or match resistive electric models with a first-hour rating of 61 gallons.

Despite the higher initial purchase price — around $1,200 for a new 50-gallon hybrid HPWH compared to about $600 for a traditional gas or electric model — the drastic reduction in operating costs makes hybrids appealing. Homeowners can recoup the difference in price through energy savings in just two to three years, making hybrid water heaters an environmentally friendly option and a financially savvy one over the long term.

HPWHs provide an efficient and effective solution for meeting a household’s hot water needs. By combining resistive heating with heat pump technology, these units offer the best of both worlds: significant energy savings and adequate hot water supply to meet daily demands.

While their first-hour rating may be slightly lower than that of gas models, hybrid water heaters’ overall performance and cost savings make them a compelling choice for homeowners looking to reduce their energy consumption and save money on their utility bills.

Pros and Cons of Heat Pump Water Heaters

The advantages of heat pump water heaters extend beyond their efficiency and environmental benefits. They can save energy bills significantly, contribute to reduced carbon emissions, and offer versatile solutions catering to water heating and space heating or cooling needs. Despite their higher initial cost than traditional water heaters, the long-term savings and benefits make them an attractive option for environmentally conscious homeowners.


  • Energy Efficiency: HPWHs are among the most energy-efficient water heaters available. They use less electricity by transferring heat from the air into the water rather than generating heat directly.
  • Environmental Impact: By using less electricity, these water heaters reduce the demand on power plants and decrease greenhouse gas emissions.
  • Cost Savings: HPWHs’ energy efficiency translates into lower operating costs, saving homeowners money on their utility bills.


  • Higher Initial Cost: The upfront cost of an HPWH is higher than that of a traditional water heater. This can be a barrier for some homeowners despite the long-term savings.
  • Space Requirements: These units require space for air circulation around them, which may limit installation options in smaller homes or apartments.
  • Performance in Cold Climates: In colder climates, the efficiency of an HPWH can decrease as it becomes harder to extract heat from the colder air.

What to Look For When Buying a Heat Pump Water Heater

When shopping for an HPWH, consider the following factors:

  • Size and Capacity: Choose a unit that can meet your household’s hot water needs. A family of four might require a water heater with 50 to 60 gallons capacity.
  • Energy Efficiency Ratings: Look for models with high Uniform Energy Factor (UEF) ratings. The higher the UEF, the more efficient the water heater.
  • Rebates and Incentives: Many utilities and government programs offer rebates and incentives for purchasing energy-efficient appliances, including HPWHs. These can help offset the higher initial cost.


In summary, heat pump water heaters offer an innovative, efficient, and versatile solution for meeting a household’s hot water needs. Whether you’re building a new home, upgrading your existing water heater, or seeking ways to reduce your environmental footprint, a heat pump water heater could be an excellent investment toward a more sustainable and cost-effective future.

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