Photo of the heat pump water heater in the corner of the garage of the First Attainable Home

Hot water isn’t only a convenience but a staple of a comfortable home.

One of the water heater varieties gaining more popularity today is the heat pump water heater.

However, before investing in one, you should know its advantages and drawbacks.

Electric heat pump water heaters are much more efficient than their traditional counterparts. They’re also environmentally friendly (about 75% more efficient) and cost less to run. However, they can cost more upfront and may not function as well in colder climates.

If you plan on getting yourself an electric heat pump heater, there are some things to keep in mind to ensure it runs optimally.

This article will discuss the pros and cons of an electric heat pump water heater and how this might dictate whether investing in one is the right choice for you or not.

How Heat Pump Water Heaters Work

A diagram showing the components of a heat pump water heater
The inner workings of an electric heat pump water heater. The heat pump part works in the same way as a refrigerator, or a mini split heat pump, and moves heat from the ambient air to the water in the tank. Many units also have backup electric heating elements for times of high demand.

To better understand some of the pros and cons of an electric heat pump water heater, you need to know a bit about how they work.

Instead of using gas or electricity to heat your water directly, heat pumps use the heat in the surrounding air to raise the temperature of your water.

This is why heat pumps do pretty well in warmer climates because there is a lot of heat in the air to absorb and use.

If you’re wondering about the “electric” part of your heat pump water heater, the unit uses electricity to move the heat from the ambient air to the water in your hot water tank.

This is the same concept that refrigerators use but in reverse. Refrigerators take the heat from inside and expel it into the air outside.

Pros of an Electric Heat Pump Water Heater

Many people are making the switch from traditional water heaters to heat pumps. Here are some of the reasons why.

More Efficient Than Conventional Water Heaters

two Energy Guide labels side by side showing the energy savings of heat pump hot water heaters
Heat pump water heaters are two to three times more energy efficient than a traditional water heater. These are the two EnergyGuide labels from a regular water heater on the left, and a new heat pump/hybrid water heater on the right. The savings are huge!

Traditional gas or electric water heaters consume more energy than your electric heat pump water heater.

This is because traditional water heaters use fuel or energy to generate heat directly, which is used to heat the water in your tank.

Heat pump water heaters, on the other hand, move heat from one place to another instead of generating it directly. Moving heat in this way is more efficient than creating it from scratch.

This makes heat pump water heaters two to three times more energy efficient than traditional heaters.

Heat pump water heaters do not use additional fuel or energy to heat your water. It takes heat that already exists in the air and uses that instead.

If all electric water heaters bought in the US were heat pump water heaters certified by ENERGY STAR, the energy costs saved each year would come to almost $8 billion.

You can read more about how much energy an electric heat pump water heater can save here.

Heat Pumps Can Last Longer Than Traditional Units

Because the cost savings of a heat pump water heater are usually felt in the years after installation, it makes sense to know how long they typically last.

Traditional water heaters have a life expectancy of 8-12 years. Heat pump water heaters, if well maintained, can last 10-15 years.

Heat Pumps Are Environmentally Friendly and Family-Friendly

An image of a heat pump water heater replacing a less efficient traditional water heater. The two units are standing side by side, part way through the installation process and are not plumbed in.
Replacing a traditional water heater with a more efficient heat pump water heater is not only good for your wallet in the long-term, but it can also help to minimize greenhouse gas emissions to protect the planet from global warming. This is me swapping out my old 50 gallon for a new A.O. Smith 50 gallon heat pump hybrid water heater at our first netzero home renovation.

One of the primary reasons that many are choosing to switch to electric heat pump water heaters is because they are environmentally friendly.

People want to do their part in saving the environment and are finding ways they can do so by adjusting their way of living.

According to the U.S. Environmental Protection Agency, if the heat pump water heaters in the U.S. were all ENERGY STAR-certified models, 150 billion pounds (almost 68 billion kilograms) of greenhouse gas emissions would be prevented annually.

Since heat pump water heaters do not use gas or oil to heat your water, the risk of gas leaks and toxic emissions is also eliminated.

Moreover, the heat pump water heater tank does not heat up much on the outside, making it extra safe for households with kids and pets.

Helps Reduce Heat During the Summer

As previously mentioned, heat pump water heaters work by absorbing heat from the air to heat your water.

Therefore, these water heaters can help to slightly reduce the surrounding temperature during the warmer summer months.

During the winter, your heat pump water heater can also use any residual heat released into the air by your furnace when you heat your home.

Cons of an Electric Heat Pump Water Heater

Though heat pump water heaters have many advantages, some disadvantages could dissuade you from making the switch.

Take note of the following when deciding, as one of these factors could determine whether a heat pump is the right choice for you.

More Expensive Upfront Costs

A fan of money spread out on a white table.
Heat pump water heaters can be expensive to install, but are much cheaper to run and can save you a ton of money in the long term.

Water heaters that run on heat pump technology are much more expensive to buy than traditional model water heaters.

A heat pump unit can cost two to four times as much as a conventional gas-fired or electric water heater. This doesn’t cover installation costs, either.

Though heat pump water heaters are more energy efficient than traditional models, you’ll save on utility costs in the years following installation.

High upfront costs, despite the savings accumulated over the following years, can quickly put this type of water heater out of many budgets.

Heat Pumps Don’t Perform As Well in Colder Temperatures

Because of how heat pump water heaters function, they may not be suitable for places in colder climates.

They may not also function as well as they could during the winter months. This is because there isn’t as much heat in the air for the heat pump to absorb to heat your water.

This is why it’s also recommended that the room where your water heating unit is installed should be well-insulated.

Hybrid models are now being offered and recommended to cope with this drawback. For example, there is an electric-type hybrid.

The heat pump part of your unit will work during the warmer months and when it can during the colder season.

When your heat pump needs to recover, the traditional electric resistance water heater can take over the task of heating your water.

The ideal environmental temperature for a heat pump water heater to function optimally would be 40°F – 90°F (4.44°C – 32.22°C).

Heat Pumps Take Relatively Longer To Heat Water

A woman with her finger under a stream of water coming out of a hot faucet waiting for hot water to arrive.
We all know that feeling of waiting for hot water to become available from our hot faucet so that we can take a bath or do the dishes. If you’re waiting for the water to heat up, it will take longer with a heat pump water heater than with a traditional water heater.

Compared to more conventional water heaters, heat pumps take a bit longer to heat your water.

This is because of the lower operating temperatures of heat pump systems compared to gas furnaces and electric resistance systems.

For this reason, heat pumps may have difficulty providing enough hot water during peak or high-demand hours. One example would be at the start of the day when everyone wants a hot shower before work.

This is why a hybrid model is recommended to keep up with the demand. An electric hybrid can take over when your heat pump struggles.

This Water Heater Type May Not Be Suitable for Smaller Homes

Smaller homes may not have enough space for a heat pump water heater.

Because heat pumps absorb heat from the air, these units also need enough air space to function well. More space is also required for a condensation drain or pump.

The minimum required amount of air space around your heat pump water heater for optimal performance is around 750 – 1000 cubic feet (21.24 – 28.32 cubic meters).

That space would be bigger than a small bedroom since the minimum required space for a habitable room is 70 square feet (6.5 square meters). The minimum ceiling height of 7 feet (2.13 meters) would make a small bedroom just 490 cubic feet (13.88 cubic meters).

So, your heat pump water heater would need a room the size of two small bedrooms.

Unless you have a dedicated room, or a basement, for utilities, the space requirement will push this type of heater off your list of possible home improvements.

A closet for your water heater is not nearly enough space.

Other Factors To Consider Before Purchasing an Electric Heat Pump Water Heater

Aside from the pros and cons, here are some other tips and recommendations when investing in an electric heat pump water heater for your home.

Plan Ahead and Do Your Research

A man with a clipboard planning when to replace his hot water heater. There is a tankless water heater that he's standing next to.
It’s important to plan ahead and to avoid being forced into a quick decision about what type of boiler to install. So make sure you think about this before your current heater gives up on you.

If you plan to transition to a higher-efficiency water heater model, start your research and planning before facing an emergency.

This way, you are in no rush and can find the model that best suits your needs and space. You will have time to plan when to switch models, maybe during the summer, when hot water will be less in-demand.

If you need a few ideas of other water heaters that may be the best for your home and needs, check out these water heater options.

ENERGY STAR also has a product finder that can help you research the energy consumption and other details of different appliances you may need in your home, not just heat pump water heaters.

You May Be Eligible for Rebates

When switching to the energy-efficient and environmentally-friendly heat pump water heater, your municipal government, utility, or energy service provider may offer incentives.

One example of rebates is the $300 federal tax credit for ENERGY STAR heat pump water heater units. The Inflation Reduction Act of 2022 was also recently signed, so residential energy efficiency credits are extended up to 2032.

To find out more possible rebates offered in your local area, you can visit ENERGY STAR Rebate Finder and just enter your zip code.

These incentives and rebates can sometimes be enough to put an electric heat pump water heater within your budget.

An Electric Heat Pump Water Heater Needs an Insulated Room

Air sealing around an electrical outlet using spray foam.
Air sealing is a critical part of ensuring insulation does its job properly. Eliminating drafts around electrical outlets using spray foam can make a huge difference to the energy efficiency of a room.

Aside from the cost of the unit and installation costs, you may need to have your utility room insulated.

This is because your heat pump water heater needs access to or the presence of warm air to function well.

Getting your water heater room insulated will incur additional costs- both the cost of the insulation material and possibly professional installation.

If you’re going DIY for your insulation, you can opt for fiberglass batt insulation. This type of insulation is easiest to carry out and won’t break your budget.

You can purchase the Owens Corning Faced Insulation Roll on Amazon. It’s made to fit 2×4 wood stud walls ideally.

This insulation doesn’t just provide great thermal control. It helps with soundproofing too. Installing this on your utility room walls can help block any sounds from your water heater from the rest of your home.

Another way to help insulate your utility room is to use weather strips for gaps around windows or under doors to block out the entry of cold air.

You can use CloudBuyer Indoor Weather Stripping (available on Amazon.com). It also helps to block noise and is backed with a strong adhesive that ensures it sticks well to where it’s applied on door or window edges.

If you have any questions about the best type of insulation for your utility room, don’t be afraid to consult a professional or an experienced contractor.

Moreover, check any local regulations or standards if you plan to renovate your home to accommodate your water heater.

Make sure to read over the manual that comes with your electric heat pump water heater. Some may have specific requirements depending on the model of the water heater.

You can also consult the supplier or manufacturer of your equipment.

Final Thoughts

Heat pump water heaters are much more energy and cost-efficient than gas-fired or conventional electric-resistance water heaters.

By using them, you’ll also be able to save a lot in utility costs and do your part for the welfare of the environment.

However, heat pump water heaters usually cost much more than conventional models. They also don’t function optimally in cold climates.

That’s why electric hybrid heat pumps are recommended to cope with some of the drawbacks of the heat pump.

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