UPDATED on October 26, 2018
The least expensive way to heat domestic hot water is with natural gas. Homes without access to natural gas usually choose an electric water heater, since electricity is generally cheaper than propane.
Although most electric water heaters use electric resistance elements to heat water, a more efficient method uses a heat pump — in other words, a device that heats the water using a compressor like the one found in a refrigerator or air conditioner. While a refrigerator transfers heat from the interior of the refrigerator to the room where the refrigerator is located — in effect, heating the room — a heat-pump water heater transfers heat from the room to a tank of water — in effect, cooling the room.
Heat-pump water heaters need backup elements
Compared to an electric-resistance water heater, the main benefit of a heat-pump water heater is energy efficiency. While the efficiency of electric resistance elements is 100% — all of the electrical energy sent to a resistance element is converted into heat — the efficiency of an air-source heat pump can be as high as 250%. The heat-pump isn’t making heat — it’s transferring heat from the air to the water. A heat pump is capable of transferring more energy than the energy required to run it.
The type of heat pump used for heat-pump water heaters can’t heat water as quickly as electric resistance elements, however. While the electric-resistance elements in a typical water heater can heat 20 gallons per hour, a heat pump can only manage about 8 gallons per hour (or even less, if the ambient air temperature is below 68°F).
To make up for this basic deficiency in heat-pump performance, heat-pump water heaters are equipped with electric resistance elements that are energized whenever the heat pump can’t keep up with the demand for hot water. This feature improves the performance of the unit but introduces an energy penalty.
Most heat-pump water heaters have controls that allow a homeowner to choose one of three modes of operation:
- Heat-pump-only mode (a mode that is energy-efficient, but that doesn’t allow long showers).
- Hybrid mode (heat-pump operation plus electric resistance backup).
- Electric-resistance-only mode (a mode that you could choose during cold weather, when you might not want the appliance to cool the space where it is located).
Heat-pump water heaters are clearly more efficient than electric resistance water heaters. Possible side benefits include dehumidification of the room where the unit is located, and space cooling (a side effect which is beneficial in hot weather but potentially problematic during the winter).
Measuring the efficiency of electric water heaters
Electric water heaters (both electric-resistance water heaters and heat-pump water heaters) are rated with an Energy Factor (EF) that is based on a standardized laboratory test procedure. The EF rating is the ratio of the energy delivered to the water divided by the energy used by the water heater. An EF test takes 24 hours; the testing standard specifies the volume and spacing of the hot water draws, as well as the temperature of the hot water and the ambient temperature of the room. An EF rating takes into account standby losses but not distribution (piping) losses.
A typical EF for a heat-pump water heater ranges from 2.0 to 2.5, while a typical EF for an electric-resistance water heater is 0.9. (The EF of an electric resistance water heater is always less than 1.0, due to standby losses through the tank insulation and at the pipe connections.)
While a unit’s EF must be measured in a laboratory, researchers can calculate a water heater’s coefficient of performance (COP) in any location where the unit is installed, as long as the proper monitoring equipment is in place. While the EF of an appliance is fixed, the COP of an installed water heater will vary, depending on the ambient temperature of the room where it is installed and the water use habits of the family using the water heater.
A heat-pump water heater with a COP of 1.8 is twice as efficient as an electric-resistance water heater with a COP of 0.9.
Factors that affect performance
A recent pilot study by researchers from Steven Winters Associates monitored the performance of 14 heat-pump water heaters installed in the basements of 14 homes in Massachusetts and Rhode Island. The study was sponsored by three electric utilities: National Grid, NSTAR, and Cape Light Compact. Robb Aldrich presented the results of the study on March 7, 2012 at the NESEA-sponsored Building Energy 12 conference in Boston.
The monitored water heaters included ten GE GeoSpring units, two A.O. Smith Voltex units, and two Stiebel Eltron Accelera 300 units. The water heaters were installed in older existing homes, not new high-performance homes.
The cost to operate a heat-pump water heater is hard to predict, because performance depends on the ambient temperatures of the room where it is located and the percentage of time that the electric resistance element is on.
The researchers identified the following factors that affect the performance and efficiency of heat-pump water heaters:
- The higher the ambient temperature in the room where the unit is located, the better its performance and the better its energy efficiency. A unit that might perform at a COP of 2.35 at 68°F will only perform at a COP of 1.8 at 50°F.
- The units installed in homes that used a lot of hot water (up to a point) had a higher COP than those installed in low-use homes. “If you don’t use much hot water, your COP is low due to the standby losses,” said Aldrich. “If you use more, the standby losses are smaller, so the COP is higher.”
- Large volume draws of hot water cause the electric-resistance elements to kick in, thereby lowering the COP. “Concentrated draws of hot water make it hard for the heat pump to keep up,” said Aldrich. “A larger tank or a hotter tank might solve this problem.”
Energy use monitoring data
The measured performance of the 14 heat-pump water heaters enrolled in the study was fairly good. On average, the monitored COP was 1.9 — meaning that the units were more than twice as efficient as an electric-resistance water heater operating at a COP of 0.9.
The best-performing unit (located in a warm basement) had an average COP of 2.6, while the worst-performing unit (located in a small room in a very cold basement) had an average COP of only 1.0.
Where would I put a heat-pump water heater?
There are three places where you might put a heat-pump water heater:
- If you live in a warm climate and you have an attached garage, put it in the garage.
- If you don’t have an attached garage or you live in a cold climate, put it in the basement.
- If you don’t have an attached garage or a basement, put it in a utility room — as long as the utility room is big enough.
It’s important to note that these three locations aren’t equivalent, and the performance of the heat-pump water heater will vary depending on the conditions of the room where it is installed. Many homes don’t have a good place to put a heat-pump water heater.
Before you can install a heat-pump water heater, you need to be sure that you can fulfill all of these requirements:
- You need a room that is big enough; most heat-pump water heater manufacturers advise that the room should measure at least 750 or 1,000 cubic feet, although at least one manufacturer allows its unit to be installed in a room measuring only 500 cubic feet. Remember, in a small room, performance will suffer.
- Ideally, the room will stay above 50°F all year long; however, if the temperature dips lower occasionally, your water heater will still work, although its efficiency will drop.
- The room’s ceiling must be high enough to accommodate the water heater. Heat-pump water heaters are taller than electric-resistance water heaters. These units range in height from 63 inches for the G.E. unit to 82 inches for the A.O. Smith unit. Check the manufacturer’s specs before placing your order.
- The location must allow for the installation of a condensate drain. If a gravity drain (a floor drain) isn’t possible, you’ll need a condensate pump. Since a 120-volt condensate pump that is plugged into a GFCI receptacle will stop working every time the GFCI has a nuisance trip, you probably want to order a 240-volt condensate pump and have it hard-wired.
- The proposed location must be roomy enough to allow for proper airflow around the unit and for proper maintenance of the filter, the condensate drain, and other parts.
- The temperature of the room in which the unit is installed will drop when it is operating, by anywhere from 2 F° to 6 F° — and perhaps even more during heavy draws of hot water. The location should therefore be one where such temperature drops don’t lead to comfort problems.
- The location must be far enough away from occupied areas (especially bedrooms) to prevent noise complaints. “The sound level is about 60 decibels,” said Aldrich. “That’s like a window air conditioner — louder than a refrigerator.”
According to most researchers, garage installations are usually the best. Garages are big, and it’s unlikely that there will be any complaints due to the unit’s cooling effect or noise. Of course, if you live in a climate that is cold enough to freeze pipes in your garage, you’ll have to find somewhere else to put it.
How much space heat do they steal?
Clearly, a heat-pump water heater scavenges heat from ambient air, thereby cooling the space where it is located. However, this is not always a problem.
- It’s not a problem in a garage.
- In a hot climate, even if the heat-pump water heater is located inside a home’s conditioned space, the unit’s cooling effect will be welcome for most of the year.
- In a cold climate, a heat-pump water heater installed inside a home’s conditioned space will rob space heat, forcing the home’s furnace or boiler to work a little harder.
In the worst-case scenario, all of the heat scavenged by the water heater during the winter is robbed from a home’s conditioned space. However, if the unit is installed in a basement, it’s unlikely that the space heating system will need to supply all of the heat scavenged by the heat pump. After all, most basements aren’t heated directly; all they receive is indirect heat.
Assuming that the basement in not used as living space, some but not all of the heat scavenged by the water heater will come from the furnace, and the basement will stay a few degrees cooler than it would have been otherwise. For many homeowners, cooler basement temperatures aren’t a problem. The fact that there is a slightly higher delta-T between the first floor and the basement will have only a very small effect on the home’s heating load.
Quantifying these interactions is extremely tricky. “It’s a crazy thing to try to model,” said Robb Aldrich. “So what we have done is to try to bracket it. If the heat-pump water heater robs no heat from the space” — for example, if the unit is in a garage — “then all the measured electrical savings are really savings. On the other hand, the worst-case scenario would be if the heat-pump water heater operated in resistance-only mode for six months of the year. That’s unlikely; it’s the worst-case scenario. What this means is that from the standpoint of energy consumption, a heat-pump water heater is almost always going to be better than just electric resistance, and often quite a bit better. Yes, the heat is coming from the space during the winter, but not every BTU that you take from the basement needs to be replaced by the heating system; that percentage will vary widely.”
Can the exhaust air be ducted outdoors?
At least one heat-pump water heater manufacturer (AirGenerate of Houston, Texas) allows the exhaust air from the heat pump to be ducted to the outdoors. The idea is that if your heat-pump water heater is making your utility room too cold, you might want to send the cold exhaust air somewhere else.
There’s only one problem with this approach. According to David Kresta, a project manager at the Northwest Energy Efficiency Alliance in Portland, Oregon, the temperature of the exhaust air coming off of a heat-pump water heater is in the range of 45°F to 60°F. If you send all of that exhaust air out of the house, an equal volume of makeup air will enter the house from the outdoors. If the outdoor temperature is lower than the temperature of your exhaust air, you’ve made your house even colder than it would have been if you had exhausted the heat-pump inside your house.
Not only that, but the exhaust fan will have to work a little harder (and use a little more electricity) to send the exhaust air through ductwork than it would to just blow the air in your utility room.
How much will I save?
Robb Aldrich calculates that a family in New England could save between $40 and $270 per year by switching from an electric-resistance water heater to a heat-pump water heater. That calculation is based on a family that uses 35 gallons of hot water per day, with an electricity cost of 17 cents/kWh. (If you pay only 8.5 cents/kWh, your savings will only be half as much, of course.)
The low end of the savings scale ($40 per year) is for a heat-pump water heater installed in a bad location (a small, cold room). The high end of the savings scale ($270) is for a unit installed in a good location (a large, warm room).
According to Aldrich, the incremental cost to install a heat pump water heater (compared to an electric resistance water heater) varies from $1,400 to $2,700, depending upon which model was installed.
One of the reports that was issued by the Steven Winters researchers — — includes a table with somewhat more optimistic conclusions that those summarized by Aldrich during his presentation. (Presumably, the optimistic assumption is based on avoiding bad installations in small, cold rooms.) According to the optimistic assumptions, a family using 35 gallons of hot water per day can expect annual energy savings of 1,750 kWh. If electricity costs 12.6 cents/kWh, the annual saving is $221, and the payback period is 6.6 years (based on a relatively low incremental cost of $1,458 to install the heat-pump water heater).
Families that use more than 35 gallons of hot water per day can expect a shorter payback period.
Choosing a heat-pump water heater
When it comes to integrated heat-pump water heaters — that is, units that come with a tank — five models dominate the market:
- AirGenerate makes the ATI50 (with a 50-gallon tank) and the ATI66 (with a 66-gallon tank). The larger unit costs about $1,900 to $2,000; it has an EF of 2.40 and a first-hour rating of 75 gallons.
- A.O. Smith makes the Voltex in two sizes (60 gallon and 80 gallon). The larger unit costs about $1,850 to $2,100; its EF is 2.33 and its first-hour rating is 84 gallons.
- General Electric makes the GeoSpring. It has a 50-gallon tank and costs about $1,200 to $1,500. Its EF is 2.35 and its first-hour rating is 63 gallons.
- Rheem makes the HP-40 (with a 40-gallon tank) and HP-50 (with a 50-gallon tank). The larger unit costs about $1,300; it has an EF 2.0 of and a first-hour rating of 67 gallons.
- Stiebel Eltron makes the Accelera 300. It has an 80-gallon tank and costs about $2,400. Its EF is 2.51 and its first-hour rating is 78 gallons.
[Author’s note: For an undated list of water heaters available in 2018, see “Revisiting Heat-Pump Water Heaters.”]
All of the researchers I talked to emphasized the benefits of a large tank size, so don’t buy the G.E. unit, the Rheem unit, or the smaller AirGenerate unit. “Bigger and hotter tanks are better,” said Aldrich. “It’s counterintuitive.”
According to “Measure Guideline: Heat Pump Water Heaters in New and Existing Homes” by C. Shapiro, S. Puttagunta, and D. Owens, “The units with smaller tanks demonstrated difficulty in maintaining hot water delivery in high demand situations, even if their electric resistance elements are used. The units with larger tanks provide a buffer in times of high demand and therefore are expected to use their heat pump for recovery, rather than reverting to electric resistance heating to maintain outlet temperature. The result is more efficient operation and better performance in terms of availability of hot water. In households with more than two occupants, a HPWH with a larger tank will likely be a better option.”
One other factor to consider: only one manufacturer (AirGenerate) makes a heat-pump water heater with a stainless-steel tank. The material used by the other four manufacturers is enameled steel. In most cases, stainless-steel tanks last longer than enameled-steel tanks.
How long will they last?
We don’t yet know how long the current generation of heat-pump water heaters will last. Nor do we know which parts will fail first — the controls, the compressor, or the tank.
When I asked Aldrich about the longevity of these units, he said, “That’s a big question. I am cautiously optimistic. Ten or 12 years ago, we did a study of the early models available, and we noticed failures during the first few years after the units were installed. We are not seeing anything like that now with the newer units. The controls are more robust. If you think of a refrigerator, how long does a fridge last?”
So I asked a follow-up question: “Well, would you put one in your own house?”
He answered, “If I didn’t have natural gas — yes, I would.”
Last week’s blog: “Are Tankless Water Heaters a Waste of Money?”