What is a Heat Pump Water Heater?

Heat pump water heaters use a small amount of electricity to move heat from the surrounding air to the water. And since it’s more efficient to move heat rather than generate it, the heat pump water heater can deliver hot water up to two and a half times as efficiently as a common electric resistance water heater.

Although savings will vary depending on your climate zone, the price of your electricity, and your family’s hot water demands, savings per year for family of four are between $40 and $270, while a family of six can potentially save between $80 and $570 dollars per year. It is not uncommon for heat pump water heaters to pay for themselves in 3 to 4 years, with the savings continuing for 10 or more years.

Why Switch to a Heat Pump Water Heater — Advantages
Heat pump water heaters are a cost-effective method of reducing energy use for heating water especially when compared to the use of common electric resistance water heaters. Traditional electric resistance water heaters are an inefficient and expensive form of water heating, whereas heat pump water heaters have efficiencies and operating costs similar to natural gas storage water heaters, making them an excellent choice for homeowners who currently use an electric resistance, fuel oil, or propane.

How Heat Pump Water Heaters Work

The primary heating mechanism is a vapor compression cycle (like those in a refrigerator or air conditioner, but operating in reverse) that transfers heat from the surrounding air to the water stored in the tank. Auxiliary electric resistance elements are also included for reliability and quicker recovery. Most current HPWHs are truly hybrids: they integrate a heat pump and electric resistance element(s) into a single storage tank.


Things to Consider

Proper Sizing
Larger tank sizes are recommended in households with more than two occupants as they provide a buffer in times of high demand, avoiding the need for electric resistance heating and resulting in more efficient operation.

To properly size a storage water heater, use the water heater's first hour rating. The first hour rating is the number of gallons of hot water the heater can supply per hour starting with a tank full of hot water. The number is determined by the tank capacity, source of heat (burner or element), and the size of the burner or element.

For heat pump water heaters, look for the rating either on the label or in the product literature from a manufacturer. Look for water heater models with a first hour rating that matches within one or two gallons of your peak hour demand -- the daily peak one-hour hot water demand for your home.

To estimate your peak hour demand:
Determine what time of day (morning, noon, evening) you use the most hot water in your home. Keep in mind the number of people living in your home. Then estimate the amount of hot water used during that time. As a rough rule of thumb, a shower uses about 10 gallons of hot water, shaving uses 2, food prep or hand washing dishes roughly uses 4 gallons, running the dishwasher uses 6, and running the clothes washer uses 7 gallons.*

*Water use information is from the Energy.Gov Sizing a New Water Heater discussion and is based on information from the Federal Energy Management Program Energy Cost Calculator.

The Right Location
Selecting an appropriate location for a standard ERWH is relatively straightforward. Any space large enough for the water heater, piping, and servicing can be appropriate for an ERWH. However, HPWHs require special consideration as they require more space and weigh more than traditional ERWHs. The best location must be chosen with respect to the space conditioning equipment, the ambient temperature of the space, and noise. Clearances must be provided to allow for proper airflow as the HPWH must be able to extract sufficient energy from the surrounding air. If a unit is installed in too small an area, the space can have a dramatic reduction in temperature during HPWH operation.

Savings Calculator

Marketed as replacements for electric resistance units, HPWHs promise to save considerable electric energy and money over traditional ERWHs.

According to the U.S. government EnergyGuides for a 50 gallon ERWH with an EF of 0.90 and a HPWH with an EF of 2.35, a HPWH could save 2,684 kWh per year for an average family. These water heaters are considerably more expensive to install than traditional ERWHs, but electric savings will likely save more money over the course of the water heater’s life. The below table shows the installation and annual operating costs, according to the National Renewable Energy Laboratory’s (NREL) National Residential Efficiency Measures Database and the U.S. government Energy Guide labels.

HPWH vs. ERWH (U.S. Government EnergyGuide Labels)

Water Heater Annual Electric Usage (kWh)† Installation Cost* Annual Operating Costs†
HPWH (50 gal, EF = 2.35) 1,856 $2,100 $198
ERWH (50 gal, EF = 0.90) 4,879 $590 $520

* NREL National Residential Efficiency Measures Database
† US Government Energy Guide Labels

Expected Annual Energy Savings by House Size

Number of Bedrooms Average Daily Hot Water Usage (Gallons) Expected Annual Energy Savings (kWh) Annual Utility Bill Savings Return on Investment Payback Period (years)
1 35 1,750 $221 46% 6.6
2 45 2,000 $260 72% 5.8
3+ 55 2,200 $286 89% 5.3
Calculate Your Savings

For savings based Manufacturer’s published Energy Factor, click the links below to use their calculator.

A.O. Smith
Stiebel Eltron

For more information about HPWHs, click here.