5 Things to Know Before Buying high temperature heat pump water heater price

Dig into the reasons why heat pump water heaters are the most efficient, most comfortable option on the planet.

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Time to upgrade your water heater?

If your water heater is getting up in age—or if it’s been running out of hot water before your shower is even finished—it’s time to start shopping around. 

Well, you’ve found the right place.

In this heat pump water heater buying guide, you’ll get all the details on how and why they’re the best water-heating option for the vast majority of homes.

At Sealed, we’re home energy experts, and we LOVE heat pump water heaters.

Not to mention, there are plenty of tax incentives and rebates for heat pump water heaters (because they’re that good at cutting energy waste).

When you work with Sealed, we’ll handle the paperwork so that you receive all eligible rebates. Learn more.

This is meant to be a comprehensive list of resources, so there’s a lot in here.

Use the table of contents below to jump ahead: 

A quick cheat sheet: What you need to know about heat pump water heaters (aka hybrid water heaters)

For those of you who are late for a date with destiny, here’s a quick glance at heat pump water heaters:

What is a hybrid water heater?

A hybrid water heater is also a heat pump water heater. It’s a type of residential water heating appliance that operates on a combination of heat pump and electric resistance technology.

How much does a hybrid water heater cost?

These appliances don’t come cheap. The appliance itself costs anywhere between $1,500 and over $3,000 depending on tank size, but that number doesn’t include the cost of professional installation or any electric panel upgrades that may be required. 

Tap here for more heat pump water heater cost considerations. By the way, Sealed can help you make your home more comfortable and energy efficient—and that includes getting you eligible rebates on heat pump water heater upgrades, and connecting you to a highly vetted, expert contractor. Find out how.

How efficient are hybrid water heaters?

They’re the most efficient way to heat water for residential use—up to 3 times more efficient than traditional water heating methods of the past (1). More on exactly why and how below.

How do you size a hybrid water heater?

Sizing a new water heater is a job best left to the professionals. We asked our team of experts, and as a general guideline, a 50 gallon tank can be enough for 3 to 4 people. But if your household schedule requires using a lot of hot water at the same time, a 65 gallon tank may be the better option. Alternatively, a 50 gallon tank could be enough for 5 people that space their hot water use out a bit more. Consult a pro regarding the best fit for your hot water usage patterns.

Okay—now that you’ve been through the cheat sheet—for those of you who are ready to dig into the details (and impress your friends with sciencey water-heater knowledge), let’s get started. 

What is a heat pump water heater?

Okay, so if you’re curious what all the buzz is about: A heat pump water heater—also sometimes referred to as a hybrid water heater—is a type of home water heating system that uses a small amount of electricity to move heat from the ground (if you’re using a geothermal heat pump) or the air to heat the water. 

By far, heat pump water heaters are the most efficient way to create hot water at home. They blow other domestic water heating methods… out of the water (pun intended, of course).

In the past, natural gas water heaters were more popular because, well, natural gas used to be a fairly cheap home heating fuel.

But as the cost of natural gas has increased over time—and now that we know more about the harmful effects gas has on indoor air quality and how it can contribute to increased health costs—more homeowners are opting into going fully electric (2).

Nearly 20% of the average household’s energy consumption is used on water heating alone.

And we can’t go without mentioning this: Heat pump water heaters are better for the health of the planet, too. They have a lower carbon footprint because they use less energy to heat up the water in your house. 

That’s good for everyone—including you, your utility bills, and future generations.

But how are they so efficient? Well, we’re glad you asked… 

How does a heat pump water heater work?

A heat pump water heater is more energy efficient than a traditional electric resistance water heater or natural gas water heater because it doesn’t have to work as hard to create heat. 

Heat pumps work by moving existing heat from one place to another, rather than using energy to generate new heat. 

If you have an air-source heat pump water heater, it pulls heat energy from the air (yes, even in cold weather!) to the appliance to generate hot water—that way, you can enjoy washing your dishes, cleaning your clothes, and then get in a good, hot shower after a long day of chores. 

And if you have a geothermal heat pump water heater? It moves heat energy from the ground outside to the appliance to create hot water. 

(Read more about geothermal vs. air source heat pumps here to understand which type might be best for your house.) 

For a super-detailed guide on how modern heat pump technology works, check out the Sealed Ultimate Guide to Heat Pumps.

How much electricity does a heat pump water heater save?

A heat pump water heater can be up to 3 times more efficient than a traditional electric water heater and up to 50% more efficient than a natural gas water heater, according to the U.S. Department of Energy and an analysis by ENERGY STAR (3, 4).

We’ll say this a bit louder for those who are scrolling fast:

Nearly 20% of the average household’s energy consumption is used on water heating alone, so conserving energy for this daily task can make a big difference (5).

How much electricity your new heat pump water heater will use or save overall depends on:

• How many people are in your household
• Your water-use habits (for instance, do you wash your clothes with cold water to save energy?)
• The specifics of your unit, like how big your storage tank is

Hybrid heat pump water heaters can be up to 50% more efficient than natural gas water heaters.

ENERGYSTAR.gov

What’s a hybrid water heater? How does it compare to a heat pump water heater?

For most people looking to switch to a heat pump water heater, a hybrid water heater is probably the best bet, and you’re about to learn exactly why.

A hybrid water heater is incredibly similar to a heat pump water heater—so much so that the terms are often used interchangeably—but there’s one big difference.

Hybrid water heaters are a type of domestic water heater that use a combination of methods to keep your water warm.

A hybrid model has two technologies built into one appliance:

• An electric heating element and
• An air-source heat pump built into the appliance

There are air source heat pump water heaters that can be connected to standalone outdoor condensers, too, but they’re not as common.

Overall, this combo-approach allows a hybrid water heater to switch to the heating method that will work most efficiently when needed—which also makes it a lot smarter than other water heater models, in our opinion.

On the other hand, a heat pump water heater that doesn’t offer a hybrid approach uses air-source or geothermal heat pump heating without an electric heating element backup. 

So a non-hybrid type of water heater is best suited for warm or hot climates and households that use less hot water overall.

In fact, non-hybrid heat pump water heaters are used fairly rarely, which is why the phrases “hybrid water heater” and “heat pump water heater” are often used to refer to the same thing.

Conventional water heaters vs. heat pump water heaters: What’s the difference?

If you’re still wondering What’s the difference between a conventional water heater and a heat pump water heater? it’s a valid question.

If you have an electric water heater, your water is heated by electric resistance heat—or elements that use electricity to heat up the water stored in the tank. (And if you have a hybrid heat pump water heater, you have this backup water-heating system automatically in place.)

Alternatively, natural gas water heaters burn fossil fuel (i.e., natural gas) in your home appliance to heat water that’s stored in the tank. The burner is usually located at the bottom of the tank, and the heat created by the burner is transferred to the water. 

If you have a natural gas water heater with a storage tank, the hot water is stored and transported throughout your home through hot water pipes as needed.

But as cold water enters the tank to refill it, the burner kicks back on to reheat the stored water to the desired temperature, causing it to kick on more often and use more fuel.

If you have a tankless water heater, it heats your water on-demand only when it’s needed.

As water flows through the tankless unit, the gas burner heats it up before it’s carried to your kitchen, bathroom, or laundry room.

Tankless vs. Heat pump water heaters

Tankless water heaters have been the talk of the town in recent years due to their increased efficiency when compared to storage tank natural gas water heaters.

But here’s a surprising fact: Tankless natural gas water heaters are still not as efficient as heat pump water heaters! 

(And they often aren’t as comfortable as a hybrid water heater either. This writer found out the hard way when visiting a home with a tankless water heater and jumping into an ice-cold shower… after leaving the hot water “warming up” for five minutes.)

Tankless gas water heaters can increase your water-heating efficiency up to 34% max, while heat pump water heaters can increase your efficiency up to 50%.

Energy.gov and ENERGYSTAR.gov

Best heat pump water heaters

Wondering what type of hybrid heat pump water heater could be the best option for you?

Generally, we’ve found a 240v hybrid air source heat pump water heater is a smart choice. 

This type of hybrid model works best in a variety of climates and produces cozy, reliable hot water year round. It can run on electric resistance mode or heat pump mode, depending on which is the most efficient any given day. 

Some of the most trusted, best heat pump water heater brands include:

However, every house, climate, and household is different, so it’s best to get professional input on which model or brand is best for your situation.

Expert contractors are an excellent source of knowledge and often carry specific brands or models for good reason. 

Heat pump water heaters in cold climates vs. warm climates

Okay, so now that you have a better understanding of how heat pump water heaters work when compared to traditional water heaters or tankless systems, let’s tackle an important question that often comes up.

If heat pumps use heat energy from the atmosphere to warm up your water, what happens in the winter? 

In a colder climate, heat pump water heaters have to work harder to extract heat energy from the air or ground.

So if you live in Buffalo, New York, unfortunately, your heat pump water heater has to do a little more work than if it lived in Key West, Florida, year round.

(Although, you could consider taking your heat pump water heater on a tropical vacation to give it a break every now and again.)

Okay, jokes aside: What if you do live in Buffalo, New York? Does your water heater stop working in the winter?

Nope. And here’s why: The backup heating element in your hybrid water heater kicks on and keeps your water hot and cozy on a very cold winter’s day—while still using less energy on average than a traditional water heating system. 

That way, you can enjoy a long, hot shower after shoveling snow from the driveway… with zero guilt and hot water still left over.

And what if you heat your entire home with a heat pump? (You can, you know!) 

Cold climate heat pumps are designed to operate as reliably and comfortably as ever in colder temps, so not to worry. 

Read What temperature does a heat pump stop working? to learn why heat pump home heating is reliable—even in a Montana winter.

With a heat pump water heater, you can enjoy a long, hot shower after shoveling snow from the driveway… with zero guilt and hot water still left over.

Are heat pump water heaters worth it in cold climates?

Yes, heat pump water heaters are worth it in cold climates. Modern heat pump water heaters are efficient even in cold climate areas.

Like we mentioned above, a heat pump water heater can be up to 3 times more efficient than a traditional electric water heater and up to 50% more efficient than a natural gas water heater (6, 7).

We’ll let that sink in for a minute.

Want more information on high-temperature air pump? Feel free to contact us.

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That means you could save up to 50% of your water heating costs when you switch. 

Plus, water heating makes up 19% of the average household’s total energy consumption, so this isn’t just spare change (8). And when you have a lot of people in your household, the savings can be higher. 

When you live in a cold climate, every penny of your energy-spend counts because winter heating costs can be a beast.

If you live somewhere it gets (and stays) cold, you can make your hybrid water heater even more efficient by installing it in an area that stays warmer in winter… and by ensuring you have proper insulation and air sealing throughout your home. 

Get insulation and air sealing in your home—they help your HVAC and water heating system work more efficiently year round.

But remember: The majority of heat pump water heaters are hybrid models that include an electric heating coil backup that your water heater automatically switches to when needed.

So you’ve always got a hot shower, whether you live in Phoenix, Arizona, or St. Paul, Minnesota.

Can you run out of hot water with a heat pump?

If you’re worried about running out of hot water after switching to a heat pump water heater, don’t be!

Typically, when a household “runs out of” hot water, it’s because they have a water heater—heat pump or otherwise—that is incorrectly sized or is on its last leg and is ready to be replaced.

When a household “runs out of” hot water, it’s because they have a water heater that’s incorrectly sized or is on its last leg.

A professional home performance contractor can help you get the correctly sized water heater replacement for your household.

Plus, when your hot water heater is correctly sized and professionally installed, you can rest easy knowing you’ll have plenty of hot water for daily use.

Which leads us to our next tidbit of information…

When should you replace your water heater? 

If your water heater is getting up in age, it’s time to think about making a switch.

Typically, storage tank water heaters last about 10 years at the most, while tankless water heaters can last longer with proper maintenance.

And if your water heater breaks down, you don’t want to end up without hot water for weeks while waiting for a new water heater to be installed.

So when your water heater starts showing signs that it will kick the bucket soon, start shopping for a replacement.

Here are a few symptoms of an aging water heater:

• Sudden, unexplained increase in energy consumption
• Water discoloration
• Signs of rust and corrosion
• Inability to produce enough hot water for household use

How long will a heat pump water heater last?

With proper maintenance and care, a heat pump water heater (also referred to as a hybrid water heater, remember?) can last up to 15 years on average, and possibly more depending on your household use patterns and appliance maintenance schedule.

Of course, how long your water heater lasts will depend on how much hot water your family uses and if it receives regular care according to the manufacturer’s directions.

For example, if you have a household of 8 and never perform regular maintenance, it could last significantly less than 15 years.

If you know your water heater is nearing its replacement time—or maybe you’re just ready to leave natural gas behind and exchange it for better efficiency and healthier air—there are a few things to consider before you make the upgrade.

Switching to a heat pump water heater: Pros and cons

Before we jump into the pros and cons of heat pump water heaters, we should clarify: As home energy experts, we are very pro heat pump. In fact, it’s the only type of water heating system or HVAC system that we install. 

(We should also mention here, you can get a brand-new heat pump installed by an expert contractor if you work with Sealed—and we help you understand what rebates you may be able to apply to your project costs, too!)

In our experience, we’ve found that heat pumps are more comfortable, more efficient, and a healthier option for practically almost every household use case. 

In our experience, we’ve found that heat pumps are more comfortable, more efficient, and a healthier option for practically almost every household use case. 

However, if you aren’t sure what type of water heater is the best and most efficient for your house and climate, we’re happy to talk it through with you.

If a heat pump isn’t right for you, that’s okay. We’re here to help!

So without further ado—even though we’re very pro-heat pump water heater—you’ll get both the pros and cons below.

Heat pump water heater advantages: The pros of switching to hybrid water heater

The advantages of installing a heat pump water heater include having:

• The most energy-efficient water heating method on the market
• Generous tax credit and rebate options for heat pump water heater upgrades
• More comfortable, reliable water heating compared to tankless systems 
• Better indoor air quality (since you won’t be burning fossil fuels to heat your water)
• No carbon monoxide risk with your water heating system
• Lower operating costs over time

Disadvantages of heat pump water heaters: The cons of hybrid water heaters

The cons of installing a heat pump water heater could include the:

• Initial appliance and installation costs
• Possible need for an electrical upgrade (depending on the age of your house)
• Potentially shorter lifespan than a tankless water heater

Even with the possibility of a slightly shorter lifespan compared to a tankless water heater, hybrid heat pump water heaters are significantly more efficient.

So your new heat pump water heater will often pay for itself sooner and reduce more energy use during its lifetime.

How much are heat pump water heaters?

A hybrid heat pump water heater appliance alone can cost up to $3,000, depending on the tank size and appliance features you choose.

And according to one homeowner’s documented personal experience in Bloomberg, a professional heat pump water heater installation could cost over $8,000, including the appliance costs and inspection fees.

 What’s behind the higher costs? Well, a few things, including:

• Increased demand for energy-efficient appliances due to rising energy prices
• Better, more advanced technology built into modern hybrid water heaters
• Expert training and certifications needed to install newer, more efficient technologies
• Skyrocketing labor and material costs in recent years—in some areas, there have been 40–80% price increases (9)

But, don’t fret yet! Appliance and installation costs vary based on your location and market availability in your area—and if you work with Sealed, we’ll handle the paperwork to help you get all eligible rebates toward a heat pump water heater.

Plus, because of their superior efficiency, hybrid heat pump water heaters are so well-loved by the government and utility providers that there are financial incentives to install them in your home. 

And these incentives can do an excellent job at hedging some of those costs!

Hybrid water heater rebates and heat pump water heater tax credits

Hybrid water heaters have plenty of cheerleaders behind their adoption—and that’s because conserving energy benefits everyone (even your utility company!), so there are plenty of incentives to help make the switch easier on your budget.

• Heat pump water heater tax credits can be claimed on your annual federal tax return if you’re eligible
• State rebates vary widely across the U.S., but new programs are expected to roll out in 2023 under the Inflation Reduction Act
• Utility rebates are often offered for energy-efficient appliance upgrades, and we can help you understand what rebates are available in your area

In 2022, the Inflation Reduction Act was signed into law, and it created several new programs for energy-efficient home upgrade incentives. To learn about what home upgrades are included in the new legislation, check out our Homeowner’s Guide to Inflation Reduction Act Tax Credits and Rebates.

If you qualify to work with Sealed, we can help you understand what federal, state, and utility financial incentives your home energy upgrades may be eligible for. 

How to get a high-performance heat pump water heater

Thinking of finally making the switch to a heat pump water heater? 

We believe upgrading to a more comfortable, more efficient, and healthier home should be simple and easy to pay for, so we designed a better way to do home improvement. 

With Sealed, you can get energy upgrades like a heat pump water heater, high-performance insulation, professional air sealing, or a super-efficient heat pump HVAC system from a highly vetted, experienced contractor, and we’ll make sure you receive all eligible rebates.

Ready for a home energy makeover? Complete our easy, quick questionnaire to take the first step.

Check out our FREE home energy-efficiency guide to learn how 3 core efficiency upgrades can make your home more comfortable year round.

It was two years ago this week we had the nasty old fossil gas natural draft water heater removed.   (That’s it in the photo below.)  Outside of running a gasoline powered generator inside a house, this kind of water heater is probably the number one source of carbon monoxide in homes.  Yes, the hot water is cheap, but how much is your health worth?  So my replacement for this fossil was a heat pump water heater (HPWH).  It’s a Rheem Performance Platinum, and I love it!

Choosing a heat pump water heater

I am not an expert in heat pump water heaters, and I don’t know the range and availability of products all that well.  But I have friends who keep up with that stuff, so I asked one of them.  John Semmelhack of Think Little is a big proponent of all-electric homes, and he recommended the Rheem model that I ended up buying.  Manufacturers are always changing their models, though, so my generation 4 has evolved into the generation 5 model (I think).  Also, when you’re searching for information, Rheem uses the term “hybrid water heater” because its main source of heat is the heat pump, but it also has built-in electric resistance heating.

One of the choices you have to make when buying any water heater is size.  I sprang for the 80 gallon model for one simple reason.  If I’m going to use a heat pump water heater, I want it to use the heat pump all the time.  I don’t want to use the electric resistance heating element at all unless the heat pump fails.  The smaller the tank you buy, the more likely it is you’ll have to use some electric resistance heating.

The bigger tank has the other advantage of having more hot water available.  My 80 gallon model has an 89 gallon first-hour rating.  Did I go overboard?  Yeah, probably.  I do that sometimes.  This weekend we’ll get to put it to the test as we’re having family in town for my 120th birthday party.*  That larger tank should come in handy.

The Rheem app

The Rheem HPWH connects to wifi and has a nice app for your smartphone.  The screenshot below shows the main screen for the water heater, with the basic info about the generation (4), water temperature setting (120° F), mode (HP only), and links to other data (schedules, usage report, and wifi settings, to the left of the temperature).

And it has one annoying notice I wish Rheem would change.  That green bar is ALWAYS there for me because I’ve set the mode to heat pump only.  Their so-called Energy Saving mode would actually use more energy because it would use electric resistance heat sometimes.

Monitoring energy use

We fired up (so to speak) our new water heater on 14 September 2019, so we just passed the two-year mark.  How much electricity have we used in that time?  The chart below shows our first full year of data.  The total was 486 kilowatt-hours (kWh).  The lowest month was August at 23.75 kWh, and the highest was December at 68.6 kWh.

Notice the pattern?  Water heating energy use is low in summer and high in winter.  The main reason for that is the entering water temperature.  As everything cools down in the fall, the municipal water supply cools down, too.  That means it takes more heat pumped into the water to raise the temperature to 120° F.

A second reason is that we use more hot water in winter, although I actually haven’t measured that yet.  Next year, however, I’m going to set up flow meters and temperature sensors on my all-new hot water plumbing when I remodel my basement.  Then I’ll have the data to prove it, at least in my household.  Those data will also tell me how many kilowatt-hours it takes to get a gallon of hot water, by each month of the year and averaged over the whole year.

A third reason we use more energy in the winter is that the HPWH pulls heat out of the air, and our basement air is cooler in winter.  In my case, we currently don’t heat or use the basement much so it’s not a big deal.  In cold climates, it can be a big deal.

Another nice feature of the Rheem app is that it can show your current usage compared to usage for the previous period.  The chart above shows it by month for 2021 so far compared to the corresponding months in 2020.  It also does daily by hour, weekly by day, and monthly by day.

Our annual consumption

Since it’s been just a couple of days over two years since I started up the heat pump water heater, I can tell you how much energy we’ve used in that time and how much it has cost us.  From 14 September 2019 to 14 September 2021, we used 1,002 kWh.  I also track our electricity use in a spreadsheet (doesn’t everybody?), and over that period, our average rate from Georgia Power has been almost exactly $0.10 per kilowatt-hour (excluding taxes and fees).  So we’ve paid just a bit (two bits actually) over $100 for two years’ worth of hot water.

How does that compare to our old fossil gas water heater, you ask?  We lived with it for less than three months, so I don’t have full data.  But based on the little that I do have, it looks like the gas water heater would have cost us close to the same amount (again, excluding taxes and fees).  So, there’s no direct economic benefit to switching from a gas water heater to a heat pump water heater…when I look at the cost based on rates only.

I had already made the decision to get rid of our gas furnace, however, and that meant our only remaining gas appliance would be the water heater.  At about $38 per month (screenshot above), the fees just to have gas would make the heat pump water heater a big money saver.  Based on a marginal cost of $1,200, the extra $450 per year in gas fees ($38 x 12) would give me a simple payback of about 3.5 years!

If I had replaced an electric resistance water heater, however, we still would have saved money; just not as much.  The efficiency of water heaters is rated by something called the Uniform Energy Factor (UEF).  Higher numbers are better, and my HPWH has a UEF of 3.7.  (You can see it on the EnergyGuide above.)  A standard electric water heater has a UEF of about 0.9, making my HPWH about 4.1 times as efficient.

Instead of 501 kWh per year, I would have used about 2,000 kWh per year with an electric resistance water heater.  At $0.10 per kWh, I would have saved about $150 per year on water heating.  With a simple payback of about 10 years in this case, it wouldn’t be hard to justify this purchase for economic reasons, assuming a 15 or 20 year lifetime and minimal maintenance costs.

Noise, ducting, and filtration

One thing people have complained about with some heat pump water heaters is that they’re too noisy inside the house.  Some probably are, so I measured mine using the NIOSH SLM app on my phone.  Here are my results:

• 53 dBA — one foot straight out from the exhaust port
• 48 dBA — one foot to the side of the exhaust port
• 46 dBA — five feet away, at the mechanical room door
• 37 dBA — four feet to the side of the mechanical room door

That’s pretty quiet.  For reference, here are some other noise levels on this scale:

• 60 dBA — normal conversation
• 50 dBA — rainfall
• 40 dBA — refrigerator hum
• 30 dBA — soft whisper

Another nice feature of the Rheem model I bought is that it allows for the intake air and exhaust air to be ducted.  You can see the exhaust port in the lead photo.  It’s to the right of the digital display screen.  My water heater is in the basement, so I could run a duct up to the encapsulated attic to bring in warmer intake air and make the heat pump more efficient.  But it would be more trouble than it’s worth in my case.

I will need to run a short duct to the mechanical room wall, though.  After I remodel the basement and put a door on the mechanical room, the HPWH won’t have much air in that space so the duct will bring in air from the rest of the basement.

Even if you don’t duct air from another place, the ability to duct intake air allows you to put a better filter on the system.  The filter that comes with it is one of those paper-thin, see-through filters that mostly catches larger stuff.  I haven’t done it yet, but when I remodel and move the water heater, I’ll also add a decent filter to the system and get it all sealed up to eliminate bypass.  I want to keep that coil as clean as possible.

Is it worth it?

In my case, it certainly was worth it.  We have low rates for fossil gas here in Georgia, but they come with high fees.  Getting rid of the backdraftable gas water heater was a high priority for me.  Not having to worry about low-level carbon monoxide poisoning (or worse) brings a peace of mind that’s priceless.  And I’m doing my part to decarbonize my existing home by going all-electric.  I could have saved on first cost by going with a standard electric resistance water heater.  Had I been ready to put photovoltaics on my roof, I might have done that.

I love my heat pump water heater and am really happy with it.  It’s quiet, efficient, and gives us all the hot water we desire.  It even provides a little bit of cooling and dehumidification.  And that’s the topic for an article coming later.

 

Allison Bailes of Atlanta, Georgia, is a speaker, writer, building science consultant, and the founder of Energy Vanguard. He has a PhD in physics and writes the Energy Vanguard Blog. He is also writing a book on building science. You can follow him on Twitter at @EnergyVanguard.

 

* OK, it’s not my 120th birthday party alone. My wife and I will be a combined 120 years old on Saturday. I turn 80.5 and she 39.5…or something like that.

 

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