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Heat Pump Water Heaters: Pros and Cons

Hot water is an essential part of life during the cold season. It’s a good way to start the day, and is also a good way to end it after a long tiring day in the office or a long commute home.

However, it also takes a toll on your wallet. According to the US Department of Energy, water heating accounts for up to 20% of the average household’s energy usage. That translates to roughly $600 a year just for hot water.

If you’re looking for a more cost-effective and energy efficient way to get hot water for your home, then a heat pump water heater just might be the answer.

What is a Heat Pump Water Heater?

The heat pump water heater works by pulling heat from the surrounding air and transferring it to a water storage tank. Instead of generating heat directly like most water heaters, heat pump water heaters use electricity to move heat from one place to another. This allows it to be much more energy efficient than regular water heaters that use electric resistance.

heat pump water heater components

What Are the Advantages of a Heat Pump Water Heater?

✓ More energy efficient

A heat pump water heater is 2-3x more energy efficient compared to conventional water heaters. This also makes them more cost efficient in terms of utility bills.

✓ Environment friendly

In addition to being energy efficient, some heat pumps also use renewable energy sources such as geothermal energy for heating. This allows them to be independent of fossil fuels, along with their associated costs.

✓ Tax Incentives and Rebates

Some heat pump water heaters may qualify for incentives or rebates. Starting in 2023, the Energy Efficient Home Improvement Credit will be worth 30% of the total cost of eligible projects, up to $1,200 per year, or $2,000 per year for heat pump water heaters and heat pump space heaters.

What Are the Drawbacks of a Heat Pump Water Heater?

Temperature limitation

Heat pump water heaters are less efficient when placed in a cold space, since they tend to cool the space they are in. This means that in order to work effectively, heat pump water heaters work best in places with a year-round temperature range of  40º to 90ºF.

Space consideration

A heat pump water heater also requires at least 1,000 cubic feet (28.3 cubic meters) of air space around it. They cannot be placed in a closed off, unventilated space like a closet.

Less efficient in the cold

During the fall and winter months, heat pump water heaters do not function at their optimum performance, or may be inadequate to meet a larger household’s hot water needs. They may need to be complemented by a storage or demand water heater, or utilize traditional electric elements in the tank rather than the heat pump.

Higher upfront costs

Heat pump waters range in price from $1,500 to $3,000, a much higher price tag than conventional hot water heaters. However, tax rebates and incentives can lower some of the upfront cost, and the long-term savings more than make up for the initial cost.

What Are the Different Types of Heat Pump Water Heaters?

1. Stand-alone heat pump water

This is an integrated unit that comes with a built-in water storage tank, as well as back-up resistance heating elements. They draw heat from the air and use it to warm the water in the tank.

Some models can also be retrofitted to your existing storage tank.

2. Geothermal heat pump water heater

This draws heat from the ground during the winter, and from the indoor air in the summer. They have the advantage of being able to work year-round, not just during the warm season. However, they are also more expensive.

3. Desuperheater

This is an auxiliary heat exchanger that uses superheated gasses from the heat pump’s compressor to heat up the water. The desuperheater makes use of the excess heat that would otherwise be expelled to the ground in the summer.

Desuperheaters can be used for storage tanks, as well as tankless or demand-type water heaters.

How to Choose a Heat Pump Water Heaters

Size and First Hour Rating

Sizing is determined by the first hour rating. This is the number of gallons of hot water the heater can supply per hour with a full tank of hot water. The rating should match your peak hour demand, which is the highest-use one-hour period of your household.

To know your home’s peak hour demand, determine the busiest hour of water usage in your household. Add up the gallons used during that period. You can use the table below to estimate water usage for typical household activities.


Average water consumption

Clothes washer (top-loading)

43 to 51 gallons per load

Clothes washer (front-loading)

27 gallons per load

Dishwasher (standard)

7 to 14 gallons per load

Dishwasher (efficient)

4.5 gallons per load

Kitchen sink

3 gallons per minute

Bathroom sink

2 gallons per minute

Shower or tub

5 gallons per minute

Energy Efficiency

After determining the size, you’ll want to look at the energy efficiency. Heat pump water heater efficiency is measured by the energy factor, which is a number based on the amount of hot water produced per unit of fuel or power consumed over a regular day. 

This balances the recovery efficiency and losses from being on standby as well as from the cycling of water through the system. The higher the energy factor number, the more efficient the heat pump water heater is.

Operating Cost
Apart from the price tag and installation cost, you should also take the operating costs into consideration. To estimate the unit’s operating costs, use this formula:

365 days / year x 12.03 kWh / day ÷ EF (Energy Factor) x Fuel Cost ($/kWh) 

= annual cost of operation

The 12.03 kWh / day figure is the average daily energy usage, based on a Department of Energy test procedure for hot water heaters, for a household of three.

Recommended Heat Pump Water Heaters

Bradford White RE2H50S6-1NCWT 50-gallon AeroTherm Heat Pump Water Heater

This heat pump water heater has a 50-gallon storage capacity. It has a first hour delivery rating of 65 gallons, and an Energy Factor of 3.39. The operating air temperature range for this hot water heater is between 35°F and 120°F. When air temps are outside of this range, your unit will operate in Standard Electric Mode.

An important feature when choosing a hot water heater is the Recovery Rise. A 90° recovery rise for this tank is about 21 GPH. In other words, when the cold water enters the hot water tank, it will take just about 15 minutes to rise 90° inside the tank. 

The AeroTherm Heat Pump Hot Water Heater is Energy Star Qualified and includes 4 operating modes – heat pump mode, hybrid mode, electric mode and vacation mode.The first mode is the most efficient, while Hybrid Mode combines both the Heat Pump efficiency and savings with electric recovery when necessary. The Electric Only Mode operates as a regular electric hot water heater and offers the fastest recovery time. Finally, Vacation Mode sets the heating temperature to 50° for when the family is away.

Bradford White RE2H80T6-1NCTT 80 Gallon AeroTherm Heat Pump Water Heater with Microban Technology  - 208/230 Volt
Price: $3,399.00 Bradford White RE2H80T6-1NCTT 80 Gallon AeroTherm Heat Pump Water Heater with Microban Technology - 208/230 Volt

This item CANNOT be shipped to the state of Washington. When was the last time you even looked at your hot water heater? Hot water should not be something we t...

View Product

Bradford White RE2H80T6-1NCWT 80 Gallon AeroTherm Heat Pump Water Heater

This larger model can hold up to 80 gallons in the storage tank. It has a higher First Hour Delivery Rating of 87 gallons to meet the needs of bigger households, and a 3.48 Energy Factor. 

This Energy Star-rated heat pump water heater measures 73-1/2 inches high from the floor to the water connection and 25″ wide. It has 2″ of non-CFC foam insulation covering the sides and top of the tank, reducing heat loss, resulting in less energy consumption, improved operation efficiencies and jacket rigidity. This unit is offered with both a 6-year and 10-year warranty.

Bradford White RE2H80T6-1NCTT 80 Gallon AeroTherm Heat Pump Water Heater with Microban Technology  - 208/230 Volt
Price: $3,399.00 Bradford White RE2H80T6-1NCTT 80 Gallon AeroTherm Heat Pump Water Heater with Microban Technology - 208/230 Volt

This item CANNOT be shipped to the state of Washington. When was the last time you even looked at your hot water heater? Hot water should not be something we t...

View Product

Mickey Luongo

Mickey is the resident heating and air conditioning expert with over 15 years of experience in the industry.

2 thoughts on “Heat Pump Water Heaters: Pros and Cons”

  1. Matthew Goddard says:

    We live in Phoenix where the garage is almost always hot. Can the heat pump water heater cause the water to get too hot? Will the compressor shut down when the water temperature reaches a specified temperature? Does the system require a mixing valve to avoid the use of scalding hot water?

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