Heat pump hot water heaters (HWHPs) heat domestic hot water by transferring heat out of the surrounding air into the water.
Before You Buy
Incentives. If you have the time, before investing in a HPWH, look into the financial incentives that are available. The requirements and guidelines of the various incentive programs may help guide you in selection of equipment and installer.
Federal, state, and local governments may be offering tax and other incentives for heat pump water heaters, to encourage electrification and conservation of energy. https://www.energystar.gov/about/federal-tax-credits/heat-pump-water-heaters https://www.dsireusa.org/ https://www.energystar.gov/about/federal-tax-credits
Your local electric utility may offer HPWH incentives to promote energy conservation and/or electrification.
Low flow fixtures. The payback period for purchase of low flow fixtures is much much faster than the payback period for purchase of a HPWH. If you can find low-flow fixtures such as showerheads that perform well for you, this is a smart way to reduce the energy consumed by your water heater. It may even be a way to reduce the cost of the HPWH if it means you can get by with a smaller capacity. Over the years, the flow rates of plumbing fixtures have dropped dramatically, so if your house is an old one, the potential for savings may be high, and the payback on your investment, rapid. If you'd like to test the flow rate of your current showerhead, make the gallon mark on a bucket, then turn on the shower to maximum flow and find out with a stopwatch (available on your phone) how long it takes to fill to the gallon mark. Divide 60 by the number of seconds to calculate the flow rate in gallons per minute (gpm). To explore manufacturers and models that may perform well at low flow rates, explore EPA's Watersense website: https://www.epa.gov/watersense
Packaging
A unitary HPWH looks much like a standard hot water heater. It combines all parts of the heat pump with a tank to store the hot water, and is normally located inside the building. Advantages: Easy installation, and attractive packaging. Disadvantage: Potential difficulty avoiding increased use of energy for heating the house.
A split HPWH has an inside unit and an outside unit typically
connected by refrigeration pipes that go through the wall. The outside
unit normally contains the compressor, evaporator and evaporator fan.
The inside unit has a water tank, and the condensor coil. Advantage: Avoids taking heat from house in winter. Disadvantages: A more complex installation, including running refrigeration piping. Exposure to weather and possible damage by something falling on it or running into it. May be considered unattractive aesthetically.
Sometimes the outside unit includes all of the heat pump components, and is called a "packaged" unit. The hot water produced is piped through the wall of the house to a storage tank inside the house. That way the heat is taken out of outside air rather than the house. Advantages: No need for installer to run refrigerant piping. Doesn't risk increasing heating requirements in the house. Disadvantages: Exposure to weather and possible damage by something falling on it or running into it. May be considered unattractive aesthetically.
Energy Efficiency
HPWHs should be two to four times more efficient than the traditional electric resistance hot water heater.
Some of the HPWHs are "hybrid" meaning that they combine a heat pump and electric resistance heat, to bring down the price. The hybrid heat pumps may have practical benefits, including lower price, but they are less energy efficient...offering an efficiency somewhere between electric resistance and heat pump.
The efficiencies of HPWHs can vary dramatically, so it's worth taking a look at multiple options. The Energy Star website is a good way to do that because they generally list the more efficient options, and offer an objective comparison between the products on the Energy Star product list.
Because HPWH efficiency falls off in low ambient air conditions, the location of the HPWH will affect the annual average efficiency. You can't choose your climate, but you may have some choices about where to locate your HPWH.
To maximize efficiency and to help the environment, the installer of a split HPWH should be careful to make sure there are no refrigerant leaks and that the system is properly charged. Soap testing joints before applying pipe insulation can be used to check for leaks.
Location
HPWHs take heat out of the air at the same time they heat water, so the question of where to place a new one is worth some consideration.
A unitary HPWH is normally installed in an unheated garage or unfinished basement, to avoid increasing the amount of energy used to heat the house.
Heat pump efficiencies drop as the ambient air temperature drops, so the fact the basement or garage is likely to be warmer than the outside air in the winter is beneficial so long as (1) the basement or garage doesn't get too cold in the weather, and (2) the colder basement or garage doesn't increase the amount of heating required for the house. The key is that the space has enough air and heat transfer to provide heat to the heat pump without causing the temperature of the space to drop excessively.
If you live in a hot climate with a very mild winter, you may want to consider placing a unitary HPWH in your living space rather than the garage or unfinished basement. That way the HPWH would cool your house at the same time it heats your water. The cooling of the house would be a "free" side benefit of the hot water heater. Ideally, over time, manufacturers and designers will begin to integrate the space heating and cooling system (HVAC) with the domestic hot water system, so that the fact the HPWH is also an air conditioner will become useful in the summer but the cooling effect will be re-directed to the outside or unheated spaces with adequate outside air circulation during the winter.
A split HPWH doesn't risk increasing the amount of energy used by the house's heating system in the winter, but there are other topics to consider. You'll want the outdoor unit located where it's protected from traffic or other potential damage. If it's located on the ground, you'll want a concrete pad to mount it on. If you get a lot of snow in the winter, be sure the snow doesn't collect around the heat pump or it will limit the ability of the evaporator fan to move air across the evaporator. Some are mounted on brackets on the outside wall. The same considerations apply when locating a packaged HPWH. In both cases, the inside unit or tank is ideally located near the outside unit to minimize refrigerant or hot water piping.
Cold Weather Performance
If you live where the outside air temperature is sometimes below freezing, make sure the manufacturer and installer are used to providing HPWHs in your climate.
Performance at cold temperatures. (1) The degree to which the efficiency of a HPWH drops off at low outside air temperatures varies from one model to another. Heat pumps with variable speed compressors are normally more efficient than heat pumps with constant speed compressors. Check manufacturer's literature for what happens to the heat pump's efficiency as the outside air temperature drops to temperatures common in your climate. (2) Check that the outside unit is protected during cold weather against damage such as ice or frost build-up on the evaporator, or damage to the compressor from oil/lubricant migration.
Attention to Detail. In all heating systems, pay close attention to insulation. The colder the location the more critical the insulation. Exterior insulation requires protection from rain. Where the insulation goes through a wall or support, the insulation should be continuous, and protected from compression. Where a piece of insulation is attached to equipment or to another piece of insulation, avoid insulation gaps, and leakage in seams between pieces of insulation cladding. Wet insulation is generally far less effective than insulation that is protected from the elements. Gaps in insulation cladding can lead to condensation on the pipes and drips onto the surfaces below the piping.
Heat Tape. Where necessary, protect pipes at risk of freezing with heat tape. Control the heat tape with a thermostatic control that brings it on only at temperatures near freezing.
When using a unitary system, remember that the garage or basement where the HPWH is located will be colder than it used to be before the HPWH was installed.
CO2 Heat Pump Water Heaters have a higher efficiency at low ambient temperatures than the non-CO2 HPWHs, but they too will need to implement defrost cycles during cold weather, to eliminate frost that otherwise builds up on the outside (evaporator) coil.
New Technology: CO2 Heat Pump Water Heaters
When choosing a HPWH, the selected model will come with a specific refrigerant that will influence the HPWH's efficiency. Refrigerants are also important environmentally because some have high global warming potential. When selecting a heat pump, if you care about global warming, check the rated global warming potential of the refrigerant. (The list of available refrigerants is going to shift in the coming years as current legislation begins to ban high GWP refrigerants for specific uses.)
We are living in remarkable times. The rate of technological innovation is high, opening opportunities and challenges to those who are interested. CO2 HPWHs offer an important technological breakthrough that is currently advanced far enough that you may be able to participate directly by purchasing one for your home. The housing doesn't look unusual, but the physics of these HPWHs is fundamentally different, and they offer three radical benefits when compared to their competitors:
(1) The efficiency doesn't drop off as much at low outside air temperatures, so the overall annual efficiency is higher.
(2) They easily produce a large temperature rise in a single pass through the HPWH. They can raise incoming cold water to 140F.
(3) The refrigerant has a global warming potential of 1. The competitors either have a very high global warming potential, or higher toxicity or flammability or both. In other words, the CO2 refrigerant offer a major and unique breakthrough in environmental harm reduction.
Although HPWHs have become common across the United States, CO2 HPWHs may not be easy to purchase throughout the country.
The northwest has seen a fair number of CO2 heat pump installations. Sanden heat pumps, first introduced in Japan, have models that are sized well for single-family homes, and offer a model that is packaged, so the installer mounts the unit outside your house and pipes the hot water through the outside wall to a hot water tank inside the house. This makes the installation relatively simple, because the installer doesn't need to run refrigerant piping.
The list of manufacturers offering HPWHs is likely to keep growing. Ask local installers what they recommend, or contact dealers to find out where to go for qualified installers. See whether any of the people you know already have one, and if so what they recommend. Your local electric utility may also have advice.
Newer models have better systems for freeze protection, monitoring, and alarms, so you may want to check that you are getting the latest model if the new characteristics look beneficial for your climate.
If you are a technical nerd, look up some white papers on CO2 heat pumps. The physics of this vapor compression cycle is unusual and interesting.
CO2 HPWH Challenges:
- relatively unfamiliar and may be difficult to obtain in some parts of the country
- high operating pressures in the refrigerant loop
- generally more expensive than their competitors
5/29/25