Is a heat pump water heater a good choice for your home?

Hot water is an ever-present part of your daily routine at home. You need hot water for showers, cleaning dishes, cleaning clothes, and more. Heat pump water heaters (HPWHs) offer a new and energy-efficient way to get the hot water you need.

Did you know that hot water is responsible for around 20% of your home's energy use? That makes choosing your next water heater an important decision. The Natural Resources Defense Council says that HPWHs use about one-third of the electricity compared to traditional electric models, making them a more energy-efficient and cost-effective choice for homeowners.

A heat pump water heater, sometimes called a hybrid water heater, uses heat pump technology to heat water more efficiently than conventional electric water heaters. Rather than generate heat like a standard electric water heater, a heat pump water heater transfers heat from the air around it.

HPWHs have control panels that let the user select from different operating modes, including:

• Heat pump only (maximizes energy efficiency) - also called energy saver mode.
• Hybrid (high-demand mode) - Heat pump water heaters are called “hybrid” because they include backup electric resistance elements like standard electric water heaters. This is a default for most HPWHs. In hybrid operation mode, the heat pump is prioritized, but the unit may also use standard electric resistance during periods of high hot water demand. A properly sized HPWH system can meet typical hot water demand without triggering electric resistance.
• Electric resistance only (least efficient) - this mode is used during maintenance and uses the most energy.

Initial cost. The upfront cost of buying and installing a HPWH is more than a standard electric water heater. HPWHs typically range from $1,500 to $3,000 (before installation). However, tax credits and rebates can make this investment more manageable.

Energy savings. Because HPWHs are more efficient, you will use less energy. How much money you save on energy bills will depend on what heating fuel you are replacing. By replacing a fossil fuel water heater, your electric bill will go up, but you will no longer have that fuel cost. For example, by replacing a standard electric water heater with an  ENERGY STAR-certified HPWH,  a household of 4 can save approximately $550 per year on their electric bills and an estimate of  $5,610 over the HPWH’s lifetime.  Larger families—that typically use more hot water—will save even more.

Installation space. Heat pump water heaters perform best in spaces that do not regularly get colder than 40-45F. Locating your water heater in a basement can be a great option if the space normally stays above freezing. Your heat pump water heater needs access to air to run at peak performance. Most HPWHs need about 700 cubic feet of surrounding air space, about the size of a 10 ft x 10 ft room with a 7 ft ceiling. Specifications can vary, and your installer can determine the proper setup based on manufacturer specifications. 

Drainage. HPWHs come equipped with a condensate drain line that directs the moisture away from the unit. This drain line typically connects to a household drain, like a floor drain, or can be routed outside.

Cooling. A HPWH will cool the space it is installed in, year-round. Heat pump water heaters transfer heat from the air around it into the tank. This releases some cool air, leading to cooling of the space. If you are installing a heat pump water heater in a living area, a qualified installer can help you mitigate any concerns about comfort.

Maintenance. Like any major mechanical system in your home, HPWHs require regular checks to make sure they work properly. This includes cleaning the air filter regularly and checking the condensate drain.

Noise Levels. HPWHs have a fan and compressor, both of which can make a modest amount of noise when the HPWH is heating water.  You may want to avoid locating a HPWH where sound levels are more important to comfort, such as bedrooms and living areas. To reduce the noise, your installer may recommend adding sound insulation.