two men installing a heat pump water heater in a garage

Heat pump water heaters are known for saving money and energy. However, they typically come with slightly higher installation costs. If you’re interested in getting a new water heater, there’s no doubt a heat pump water heater will be worth the cost for the energy savings alone.

But exactly how much will one set you back?

This article will explain how much heat pump water heater installation costs, if the price is more than the average water heater installation, and how long it takes.

There are also a few affiliate links below. You don’t have to use them but if you do, the prices don’t change. We get a small commission, which helps us write up more content like this.

How Much Does Heat Pump Water Heater Installation Cost?

It costs between $800 and $2,000 to install a heat pump water heater. Many customers find the installation cost is the same as the unit price. Some companies charge fixed fees, while others charge per hour. Get a quote before hiring a service technician to install your water heater.

Labor Costs to Install a Heat Pump Water Heater

Labor costs to install a heat pump water heater can vary depending on the company, your location, and other variables. According to Dignity Plumbing, heat pump heater installations typically cap out around $3,000, but they’re rarely that expensive.

A technician adjusting the settings of a heat pump water heater

Factors that could influence the installation cost include:

  • The size of the water heater
  • Whether or not there’s a lot of debris to remove 
  • The company you go through
  • Material fees and trip charges
  • Where you want to have the water heater installed

My Own Story – A Tale of Two Heat Pump Water Heater Installs

I’ve now had two heat pump water heaters installed in our first and second netzero home renovations, and I’ll share some details and costs on them below.

Our First Netzero Home Renovation – Moving The Heat Pump Water Heater Into the Garage

This was an 80’s wood frame house where the two-car garage had a small entryway into the house itself. In that entryway were both the washer and dryer and the original conventional water heater next to them.

a gray water heater in the corner of the laundry room

So basically, the water heater was inside the house.

Knowing that heat pump water heaters make noise, I really didn’t want the new one inside the house, plus it would be a lot cleaner looking if it was out of the room.

The best place for it to go was in the corner of the garage. This way the noise wouldn’t bother anyone, and it also took the very hot air out of the garage itself to put into the water.

Heat pump water heaters emit cool air, just like an air conditioner, so it was perfect to help cool down the garage. They take the heat of the air, heat the water with it, and then vent the cold air back out. It’s pretty awesome technology.

So for the installation, I got some bids, which included moving it from the laundry room to the garage, about 30 feet away.

I was frankly being cheap on the project because I had so much work to do (and who wants to spend more than they have to?). I got bids anywhere from $650 to $1,500 for the labor and of course, went for the $650 one. With materials, it probably was another $200 for that, plus the water heater itself ($1300 at the time).

Note that if you’re not installing it in the exact same place the old one was, you’ll probably have $200-500 in material costs as well. This is because you need thick gauge electrical wire, plumbing piping, and all the random glue, connectors, expansion tank, and more to install the new water heater.

two men installing a heat pump water heater in a garage

They are installing it in the corner of the garage, having to run new plumbing and electrical wire.

The majority of the installation went OK, except they installed a used/busted expansion tank. When I called them to tell them to replace it, they, of course, disappeared. So I replaced it myself for another $40 total.

It’s been almost two years since that installation, and I’m happy to say I haven’t had a single problem.

This was the A.O. Smith Signature line. It’s a bit louder than the Rheem units but still a great water heater. And it saves about $400 per year over the old conventional 50-gallon!

I’ve mentioned the noise a couple of times now, so I thought I’d include this video I made comparing the noise levels so you can see what I mean –

The Second Netzero House – Heat Pump Water Heater Install

We used the Rheem this time, because I knew it was quieter. Plus I wanted to try a different model anyway.

The old (ancient) 30-gallon water heater was propped up above our heads in the garage corner. It had to be on its last leg, but it still kept going. It also used over $550 per year in energy and only for a 30-gallon tank! That is crazy.

a messy garage with a white tank water heater installed in the top corner of it
Yes, your garage will look like this, too, if you decide to renovate an entire house.

For the new heat pump, it made more sense to move it to the floor, and also to another corner where it wasn’t so cluttered.

This one wasn’t as bad as the first install because we weren’t moving it too far. It was also cheaper in labor – maybe about $600 for labor and another $100 for materials. If you “have a guy” or get multiple bids, you can keep your installation costs low.

a blue tesla model 3 on the left with a rheem hybrid heat pump water heater on the right in a garage
Here is the new Rheem heat pump water heater installed in the garage corner.

Swapping out my old 30-gallon for this new 40-gallon Rheem unit saves about $450 per year on the energy bill, enough to power that Tesla Model 3 there for about 10,000 miles a year. Pretty cool!

Why Do Heat Pump Water Heaters Cost More to Install?

Heat pump water heaters can cost more to install because there is a bit more plumbing versus traditional water heater tanks. There’s a condenser drain line that has to drain to the outside of the house somewhere, because the heat pump creates water when operating. It’s just like your HVAC unit drain line. So there’s a bit more of a install for that factor, otherwise it’s pretty much the same.

I would also add in another factor – and that’s contractor knowledge. Not many people I spoke to actually knew what a heat pump water was. They thought I meant tankless or something else. So because they may be unfamiliar, the price could be higher. Make sure they’ve installed specially a heat pump water heater before.

Other reasons for the potentially higher cost of heat pump water heater installation include:

  • They save tons of money compared to conventional water heaters. Companies often charge more if they know there’s a greater value in their water heaters. Next to tankless water heaters, heat pump water heaters are some of the most energy-efficient appliances you’ll come across.
  • Materials needed. New plumbing, electrical wire, connectors, fittings, drywall (if opening up the wall), paint, and lots of random things.
  • Most service technicians charge a removal fee for the old water heater tank. This fee could range from a few dollars to $100 or more. Always check the fine print to know everything about additional fees, taxes, etc. You could remove the old water heater yourself if you don’t want to pay the removal charge.
  • The cost of not getting multiple bids. It’s no secret that some technicians work faster than others. Therefore, fixed rates might be your best bet. You could save hundreds of dollars. recommends referring to the Better Business Bureau (BBB) to know if the installation company is trustworthy. If it has a low rating, no amount of money is worth potential installation errors and hazards. Companies with high BBB ratings typically charge a bit more, but you get what you pay for.

A homeowner makes adjustments to the foam insulation attached to the pipes atop his water heater tank

How Long Does It Take to Install a Heat Pump Water Heater?

It takes up to six hours to install a heat pump heater if you hire a technician. If you DIY the installation, you’ll save a lot of money, but it might take much longer to install. My two projects above took about 4-5 hours each. It’s nice that it can be a half a day project.

Additionally, many companies void warranties on DIY installations. As a result, you’ll also miss out on service warranties.

Here’s why it’s worth paying for the installation of a heat pump water heater:

  • Hot Water Solutions NW explains you’ll have to drain and refill the tank by yourself – this could take a long time, especially if you don’t have anywhere to drain the water. Many cities forbid their residents from draining the water into the street. Hiring a technician means you don’t have to deal with this process.
  • You could miss out on thousands of dollars worth of warranties – DIYing the installation means you’ll have to pay for all of the repairs out of pocket. So it’s not worth losing the peace of mind of having a warranty contract. Furthermore, you have to buy all of the installation materials beforehand.
  • Choosing the proper heater pump water heater placement is paramount – heat pump water heaters pull heat from the surrounding area. If the pipes are in the wrong place, you might miss out on a lot of energy savings. Further, your water could take a lot longer to heat.
  • Some companies offer rebates if you get the water heater and installation through them – these rebates range from $50-$100 or more. But, again, they depend on the installation company and the water heater’s make and model. Also, these rebates are usually removed if you don’t let a professional handle the installation.

Although it costs a bit of money and takes half a day or so to install a heat pump water heater through a company, it’s a worthwhile investment. You’ll thank yourself later, especially if you need to pay for repairs. 

Manufacturer warranties and service warranties are often invaluable. They last up to half a decade or more, and you might miss them if you DIY the installation.

Final Thoughts

While heat pump water heaters cost more than conventional tank water heaters, they’re more than worth it. You’ll reduce your carbon emissions, monthly energy bills, and more. 

You’ll also get a water heater that lasts twice as long as conventional models. Some of these water heaters include energy tax credits, too.


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