Upgrading your water heater? Consider a heat pump water heater

It takes a lot of energy to heat water, much more than it takes to heat the same volume of air. For example, you would have to operate a 100-watt light bulb for about 36 minutes to heat one cubic foot of water by one degree Fahrenheit. The same volume of air would heat up in less than one second with the same light bulb. Although there is far less water in your hot water tank than there is air in your home, hot water heaters consume roughly 13% of the average home’s total energy, according to the Energy Information Agency (2018). So, an easy way to reduce your home’s overall energy consumption is to install an efficient hot water heater. 


Energy consumption breakdown in average US home
Energy consumption breakdown in average US home. Source: Center for Sustainable Systems, University of Michigan.


An Easy Way to Save

You may be familiar with heat pumps as they relate to your home’s heating and cooling system. You may even own a heat pump furnace. The same technology can be applied to water heaters. A heat pump water heater (HPWH), also called a hybrid water heater, is two to three times more efficient than a standard electric water heater, according to the DOE. The difference between the two is that a HPWH, includes a tank, compressor, and a fan all in one unit, as you can see in the image at the top. 

Whether you’re looking to reduce your environmental impact or save money on your energy bill, a HPWH is a win-win. EnergyStar.gov estimates an annual savings of about $330 per year for a family of four.  The larger your household, the more water you'll use, and the more energy you’ll save!

How does it work

A HPWH works like a refrigerator, but in reverse. The heat pump uses a compressor to move heat from the surrounding air and into the water storage tank. The reason this type of water heater is so efficient is because it is easier to move energy than it is to create it with a standard electric coil. There has to be a sufficient amount of heat in the air however for the heat pump to transfer into the water; HPWHs are most effective when the surrounding temperature is between 40 and 90 degrees F. HPWHs on the market today will likely include a backup electric coil in case the surrounding temperature drops too low or if there is a large demand for hot water. 


  • Save energy and reduce electric bills compared to electric hot water heaters
  • Longer life span compared to traditional water heaters (about 13-15 years compared to 8-12)
  • No combustion gas concerns (it’s electric)
  • Digital controls let you set operation of the heater according to your preference of efficiency vs. quick recovery
  • Ideal for a garage or other un-conditioned space


  • Most units are quite large and may require plumbing and installation modifications, including a condensate pump and drain line
  • Requires some maintenance; the air filter needs to be changed every 1-2 years
  • They make more noise than a traditional water heater; think dishwasher sound
  • The upfront cost is more than a traditional electric or natural gas system

 Although the initial cost can be about three times more than a traditional electric hot water heater, the total cost to own and operate a HPWH is about half of a traditional electric unit. A back of the envelope calculation suggests that the payback for a HPWH is about 4.5 years. 

If you have a gas water heater, it may not make sense to switch to a HPWH because the cost of natural gas is relatively inexpensive. 


The HPWH below was installed in a sealed, unfinished basement. This system ties into a whole-house water purification system, which filters out chlorine, fluoride, and other water contaminants. 

Heat pump water heater connected to a whole-home water purifier


Heat pump water heater

Below is a heat pump water heater installed in a garage. This one is connected to a recirculation pump, so all of the hot water lines are insulated. This is critical, otherwise there would be constant heat loss through the pipes resulting in wasted money and energy. 

Heat pump water heater in a garage


Selecting a Heat Pump Water Heater

When selecting a heat pump water heater, you should consider the following:

  1. What size and system do I need?
    A good way to estimate your size requirement is to consider the number of bedrooms and bathrooms you have in your house. Most heat pump water heaters have a capacity of 40, 50, 66, or 80 gallons. You’ll also want to note the first-hour rating. This is a measurement of the number of gallons of hot water the unit will produce in one hour of operation (note that heat pumps are slower to heat water than traditional systems). CLICK HERE for more information on sizing your water heater. You may also want to consult with a qualified installer.
  2. How much space do I need? 
    Heat pump water heaters are often taller and wider than traditional systems, so you need to make sure you have space available. And, don’t forget about the air filter; you’ll need a little extra room for servicing. An installer can help guide you through this process as well.
  3. What should I look for in an Efficiency Factor (EF)? 
    The efficiency factor is a rating that indicates how much heat energy is created per unit of electricity consumed. The higher the EF, the lower the operating costs. The most efficient HPWHs have a EF of 2.0, which means they produce two units of heat energy for every unit of electric consumed. Not bad!

Ready to talk to an expert?

If you’re ready to spend some of your tax return on an energy efficiency improvement in your home, consider upgrading your electric hot water heater for a heat pump water heater. The experts at E3 can help you select a model that’s just right for your home. Get in touch today!