Someone hand-washing dishes under hot water

Your water heater provides hot water throughout your home, and is usually the second largest source of energy use in the home (after space heating). When you turn on your shower or run your washing machine, you’re using water provided by the water heater.

Many traditional water heaters that have been around for decades burn fossil fuels – like natural gas, propane, or fuel oil – which contributes to pollution. Others might use electric resistance to produce heat, which although electric, are inefficient and costly to operate. 

Even tankless water heaters – which are often touted as super efficient – require a lot of energy. They fire up on demand and use a lot of amperage at once, heating water as it is used, rather than keeping a standing tank of water hot. 

Heat pump water heaters, sometimes referred to as “hybrid” water heaters, are an energy efficient electric option. Instead of burning fuel to generate the heat, they work by pulling heat out of the air and transferring it into a tank storing water (learn more about the different types of water heaters).

A heat pump water heater installed inside a homeowner's garage. The top has vents to allow airflow.

Benefits of a heat pump water heater

In addition to being more energy efficient and better for the environment, heat pump water heaters often save you money on your bills.

If your current water heater runs on fuel oil, propane, or electric resistance then you’ll very likely save money on your energy bills. If you’re on natural gas, you’ll be closer to breaking even, but it depends on local energy prices.

Retrofitting for your home

Heat pump water heaters are powered by a compressor that pulls heat out of the air and transfers it to an insulated water storage tank, which means it needs ample space from which to pull. An unfinished basement or garage is a great place for a heat pump water heater. 

If your current water heater is in a small space like a utility closet, it may not have enough airflow to heat the water. You may need to install louvered doors to increase the airflow, or you may need to get a special kind of heat pump water heater – called a split system – where the compressor sits on the outside and the tank sits inside.

Electrical panel and wiring

Depending on the capacity and remaining space of your electrical panel, you may need to have an electrician add or reconfigure circuits on your panel and add 220V outlets for the heat pump water heater to plug into (learn more). This should be done in preparation for or alongside the heat pump water heater install.

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