A picture of an old regular hot water heater on the left, and a new hybrid heat pump hot water heater on the right. There is a red X by the old one, and a green check next to the new one, indicating the new one is better for energy efficiency.

Heat pump water heaters provide an excellent way to save energy. For example, a family of four can save more than $311 in energy bills annually by using a heat pump water heater. However, before installing a heat pump water heater, it’s crucial to know if it’s compatible with your home’s energy source.

This article will discuss how heat pump water heaters work and what to consider when buying one. We’ll also cover their pros and cons to help you decide if a heat pump water heater is the right choice for your home.

So without further ado, let’s get into it!

Are Heat Pump Water Heaters Gas or Electric?

Heat pump water heaters are electric. These heaters use electricity to transfer heat from the surrounding air into the water inside the tank. This process is much more energy-efficient than using electricity to generate heat directly. 

Heat Pump Water Heater Functions

Moving an object is easier than creating it. This is the principle used by heat pump (hybrid) water heaters to move heat from one region to another. Direct heat generation would consume more power, thus more energy bills.

Energy Star states heat pump water heaters work the opposite of refrigerators. In a refrigerator, heat is moved from the inside to the outside. In a heat pump water heater, heat is transferred from outside to inside to heat water in the tank.

This heating process uses electricity but is two to three times more efficient than gas or electric water heaters.

Heat pump water heaters use the following processes:

Absorbing Warm Air Into the Unit

The first step of heat pump water heaters’ function is absorbing heat from the surrounding air into the compartments. This process is made possible through a fan attached to the compressor.

The heat pump has three main parts, including:

  • The compressor
  • Evaporator coils
  • Expansion valves
  • Condenser coils

The air enters the unit and flows through the evaporator coils and the compressor. The coils absorb heat energy from the air to heat water in the water tank. The cool and less humid air is then expelled back to the surroundings.

A newer mini-split compressor outside the exterior of a home

You can also use heat pump water heaters to cool the warmer parts of your house because the air expelled from the unit is dry and cool, making it suitable for cooling a home.

It’s worth mentioning that the air absorbed into the water heater must not be hot to heat the water. These water heaters are efficient at absorbing heat even from low-temperature air. 

In most cases, Energy Saver recommends installing hybrid water heaters in places with temperatures between 40-90°F (4.44-32.22°C).

Refrigerant Increases Air Temperature

As air passes through the evaporator coils, it comes into contact with refrigerant. A refrigerant is a substance that can either be a gas or liquid. It helps in transferring heat from one area to another.

In this case, the refrigerant helps absorb heat from the air and transfers it to the water tank. The compressor then increases the pressure and temperature of the refrigerant before it flows into the expansion valve.

The refrigerant makes heat transfer possible due to its low boiling point. When the refrigerant reaches the expansion valve, it changes from liquid to gas. This change decreases its pressure while increasing the temperature.

Up to this point, the gaseous refrigerant is still hot because it’s yet to transfer heat to the water.

Heating the Water

The heated refrigerant must now transfer heat into the water and flow back to the evaporator unit—the refrigerant flows into the condenser coils, and the water is pumped to the top part of the unit.

As the refrigerant flows through the coils, it transfers its heat to the water in the tank. The now-cooled refrigerant changes into a liquid before flowing back to the evaporator unit.

A diagram showing the components of a heat pump water heater
Courtesy of the Department of Energy

The entire process of absorbing, heating, and releasing air is continuous. As a result, the water in the tank is always kept warm and ready for use.

The above steps happen inside a heat pump water heater to make it work. These units are also known as hybrids because they combine electricity and the heat extracted from the surrounding air to function.

It’s worth noting that electricity comes into play during the moderation of water temperature. If the water temperature is low, heat pump water heaters use electricity to increase it. However, if you live in a hot area, the heat absorbed from the air is sufficient to heat the water.

The beauty of these units is that you can use them for both commercial and domestic purposes. Also, they have a long lifespan of about ten years with proper maintenance.

Factors To Consider When Choosing a Heat Pump Water Heater

Some of the factors to look for when buying a hybrid water heater include:

  • Size: The water heater should meet your household’s hot water needs. You can determine the suitable size based on the number of hot water devices in your house.
  • Energy efficiency: Choose a hybrid water heater with the Energy Star label. This guarantee’s the appliance’s energy-saving capabilities.
  • Cost: The initial cost of buying and installing a hybrid water heater is higher than that of electric and gas models. However, you’ll make up for the difference in a few years through energy savings.
A homeowner makes adjustments to the foam insulation attached to the pipes atop his water heater tank

Pros and Cons of Heat Pump Water Heaters


  • They are more energy-efficient: These heaters move heat from the air instead of generating it. This makes them more energy efficient than their electric and gas-powered counterparts.
  • Eco-friendliness: Hybrid water heaters don’t release greenhouse gases into the environment. According to Energy Star, replacing all residential water heaters with hybrid heaters would reduce greenhouse emissions by 140 billion pounds (63.5 billion kg).
  • Long lifespan: These units can last up to ten years with proper maintenance.


  • The upfront cost is higher: Heat pump water heaters are costly compared to other types of water heaters. Their prices range between $2,100 and $3,300.
  • Not suitable for all climates: If you live in a colder region, this type of water heater might not be ideal for you. These units rely on warm air to function efficiently.
  • Size: Most heat pump water heaters are about twice the size of electric and gas models. As a result, they might not fit in some laundry rooms and storage closets.

Final Thoughts

Heat pump water heaters use electricity to move heat from the surrounding into the water. Therefore, they are efficient in saving energy. However, they are more costly than their electric or gas-powered counterparts.


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