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The Next Generation

New heat-pump water heaters: What’s old is new again

How would you like to start your day with a cold shower? We’re guessing you wouldn’t. Just as hot showers are taken for granted, so is quick and easy access to hot water for cooking and cleaning. As a result, water heating has become the second largest user of energy in an average home, accounting for approximately 20 percent of residential energy consumption.

To save energy, consumers have wrapped water heaters in thermal blankets or wrapped hot water pipes in insulation. While those practices should continue, a new type of water heating product is entering the market, promising to lower energy consumption and save consumers money.

Heat-pump water heaters, while not a new technology, are experiencing a rebirth. A handful of small companies produced units in the 1980s and 1990s. But random failures and other issues, such as the need for utilities to install special electric service to power the devices, soured consumers on the technology.

In addition, many electric cooperatives offered (and still offer) load management programs that depended on briefly shutting off standard electric-resistance water heaters (which can store hot water for many hours) as a way to cut electric use during times of peak demand when power prices skyrocket. These programs, in turn, helped co-ops keep electric bills affordable. Heat-pump water heaters, unfortunately, could not be used in these efforts.

Now, some major water heater manufacturers and other appliance companies have entered the market with a new and improved generation of heat-pump water heaters. Tests are being conducted on these products to determine whether they will really help consumers save energy and trim electric bills.

Heat-pump water heaters come in two types: The more expensive “integrated” model replaces an electric-resistance water heater with one that combines a heat pump with a storage tank. The second version adds a heat pump unit to an existing electric water heater.

In both versions, a heat pump circulates a refrigerant, which absorbs heat from surrounding air before it passes through a compressor to maximize heat output. Essentially, heat drawn from the air transfers to water in the tank.

While a heat-pump water heater can produce most of the hot water a family requires, a backup electric-resistance element in the tank takes over when outside air becomes too cold or when consumers need extra hot water. In summer, cool exhaust air can be released into the vicinity where the heat-pump water heater is located, assisting home cooling, or it can be returned outside via ducts

Because a heat-pump water heater uses electricity to move, rather than generate heat, it consumes roughly half the electricity of a conventional electric-resistance model. But this added efficiency comes with a high price tag. Integrated units sell for $1,400 to $2,000—more than twice the cost of a standard electric-resistance water heater. Depending on your co-op’s electric rate and the installed cost of a heat-pump water heater, including any financial incentives, payback for the purchase can take as little as three years.

Heat-pump water heaters are most efficient in warm and damp climates. Homes in those regions also benefit from the appliances’ cooling and dehumidifying features.

A heat-pump water heater needs a space of at least 10 square feet to ensure adequate air exchange. An open basement, a utility room, or—in some areas—a garage will work.

Noise becomes another consideration when deciding where to place a unit. While conventional electric-resistance water heaters operate quietly, most heat-pump water heaters boast noise levels similar to window air conditioners.

Heat-pump water heaters are not a universal option. Residents in colder climates will see decreased performance during winter. If the heat pump is designed to work at ambient air temperatures of 45 degrees or higher, the water heater’s electric element will operate whenever air temperatures drop below that level, reducing energy savings.

To learn more, visit and search for heat-pump water heaters.

Alice Clamp is a technology writer for the Cooperative Research Network (CRN), a service of the Arlington, Virginia-based National Rural Electric Cooperative Association. The mission of the CRN is to monitor, evaluate and apply technologies that help electric cooperative utilities control costs, increase productivity and enhance service to their consumer-members.