What I Wish I Knew About Heat Pump Water Heaters
Electrifying home water heating is still far from being a seamless experience.
Years and years of living within the same four walls can lead a homeowner to take for granted the comforts and conveniences provided by complex systems. We all come to expect the indoor temperature to be just right, hot water ready on demand, and new appliances to work seamlessly when plugged in.
Inevitably, there comes a time for every homeowner when an unexpected event forces them to come to grips with how their home works on the inside. For me, that moment came on a chilly Saturday morning at the tail end of a New England winter when I woke up to a house with no hot water.
A quick check confirmed that all the hot water pipes had indeed been drained empty. Ah — the basement, I pondered aloud to the dog as I faced the inevitable journey below. Yay! Basement! Let’s go!, the dog barked eagerly, leading the way into the mysterious depths of the house.
As I began to make my way downstairs, I could see the edge of a 50-gallon puddle of water stretching over the basement floor. A quick Internet search guided me through the immediate next steps: cut off the gas, water, and power supply to the unit, check the pressure release and drain valves, and find the leak. It came from the bottom of the tank, likely indicating a crack. I would need a brand new water heater once I was done cleaning up the mess.
As someone who spends working hours educating homeowners on electrification, this was a clear opportunity to put my money where my mouth is. I would make the switch to a modern, energy efficient heat pump water heater (HPWH), thereby reducing my reliance on the fossil gas infrastructure by burning less stuff to make energy in my home. Home electrification happens one appliance at a time, and the next in line would be the deceased gas heater with a cracked tank that I was staring at, as my dog and I stood next to it with our toes (and paws) submerged in two inches of cold hard water.
The most efficient way to heat water
The heat pump water heater is an ingenious device. It uses energy to source heat from the surrounding air by using a compressor and a refrigerant system. Humans have been making fire to heat water for thousands of years, but we now have the technology to extract residual heat from a cold and damp environment such as a basement, and deposit that heat into a pressurized tank that supplies hot water to the entire home at any time of the day or night. Think about that for a minute: steaming hot showers are made possible by concentrating into otherwise cold water the heat already in the basement. If we were to drop this concept on someone from a couple of centuries ago, it would blow their minds.
Not only that, but the amount of heat energy that a HPWH can extract is three to four times higher than the energy it consumes. The uniform energy factor (UEF) measures the units of heat energy that the water heater can transfer into the water tank for every unit of energy consumed from the electrical grid or the gas network. My new water heater has a UEF of 3.44, compared to between 0.63 and 0.93 for gas water heaters.
That is a remarkably efficient solution for heating water. HPWHs can significantly reduce the energy demands for the second highest utility expense in a typical home.
The water heater market in the United States is roughly split between gas and electric water heaters, with the share of electric on a steady climb since 2017. There are two kinds of electric water heaters: Electric-resistance models make up the vast majority of units sold today, while HPWHs (also called hybrid water heaters because they use a heat pump with electric resistance for backup) are currently only around 2% of the market.
That share is about to rise steeply due to new efficiency standards finalized by the Department of Energy, which apply to electric tank water heaters only (gas models are exempt). The new standards require a UEF of at least 2.3, an impossibly high bar for electric-resistance models because their UEF is always lower than 1 due to unavoidable energy loss as the heating elements convert electricity into heat. Consequently, HPWHs are expected to become the de facto standard for electric water heaters, likely capturing the lion’s share of the market as more homes electrify.
As more homeowners go through the break-and-replace process I’ve just experienced, it’s fair to assume that a HPWH will soon come to a home near you — perhaps even your own! So here I want to examine what is involved in upgrading from a gas water heater to a HPWH, as an increasing number of homeowners will make that switch.
What I learned by installing a HPWH
Unless you’re just swapping the broken unit for a new one just like it, the entire process can be disorienting. There are many reasons why home electrification is hard and requires determination. Electrifying your water heating is no different, but the process can be simpler if you know what to expect. Here’s what I learned.
1. Find a good contractor
Far and away the most important thing you can do is to find a good contractor. Unless you’re an extreme kind of DIY outlier, you’ll need to rely on the guidance of a pro. It is critical to find someone with extensive experience who can provide honest advice about choices and trade-offs.
I reached out to two large companies in the Boston area. Both were expensive, neither gave me confidence that they knew what they were doing, and one of them flat out recommended that I just get another gas unit “for half the cost and in half the time." Tempting, but I was determined to electrify. I ended up going with a small business I found through MassSave that not only had the best quote, but is local to me and has more expertise than the two big companies put together (how many contractors deploy the word “decarbonization” right on the home page?? If you’re in Massachusetts and want to electrify, give them a call)
Throughout all this, I was also sensitive to the contractor experience. I had three companies come in, put specs together, send me a quote, and do a few follow-ups. That is a big expense, which they likely would not have to worry about with a gas water heater; they could have just gotten me the new model of whatever I had and be done with it. Aside from the higher cost of sale for HPWHs, the two big companies did not inspire trust about the equipment and could not do a good job of guiding me through the process when discussing sizing, noise levels, and other aspects of switching from gas to electric.
2. It might take a while
Contractors can usually install a gas replacement at a moment’s notice, but a HPWH can take a few days. If that doesn’t seem like a big deal, you try telling my wife that the nightly bathing routine in our household will rely on the kitchen kettle and a bucket for the next week, all because I am on a mission to save the planet from a climate disaster.
The longer lead time has to do with the supply chain not caring about equipment that homeowners have never even heard of. But that is changing quickly. As HPWHs rise in popularity, more distributors are stocking them, enabling a faster turnaround for contractors. In the end, my guy was pretty fast and managed to restore hot water in two days once I approved the quote. But the other reason that installing a HPWH could still take a bit longer is…
3. You’ll probably need electrical work done
Most HPWHs (but not all) require a 220V line to be pulled from the breaker box to where the unit will be placed. Chances are you don’t have a 220V socket in the right place, and chances are your plumber won’t be able to do that work. Another reason to select a decarbonization pro is they’ll probably be licensed to do the electrical work too, and can get it all done in one visit.
A bigger question is whether your electrical panel can support a HPWH. Newer panels support at least 100 amps and should cope just fine, depending on your current load (a HPWH can draw up to 30 amps at peak operation.) If the panel does need upgrading, that will take considerably longer and cost a lot more, at which point you’ll be reaching for the phone to call that contractor who promised to deliver a gas water heater that same day. I don’t blame you. In truth, the best time to upgrade your panel is before you have to. This topic is a much deeper rabbit hole which I’ll have to save for another day.
4. Learn how to size it
Sizing the tank was a major source of confusion for me. The most common advice out there is to stick to the same size, indeed a no-brainer when replacing like-for-like. But when switching to electric, the calculation is not that straightforward.
The key spec to look for is the first hour rating (FHR), the maximum amount of hot water that the unit can deliver in the first hour of usage. A heat pump will be slower to heat the water when compared to a flame, which means that a tank of the same size might mean a lower FHR. In my case, my old 50-gallon gas unit FHR was 83 gallons, whereas my 50-gallon HPWH has a FHR of 67 gallons — effectively a downsize. Some resources suggest going up one size when moving to a HPWH. I find that recommendation to be rather frustrating, as a larger tank will cost more and could wipe out the economic benefits of electrifying.
Three months after deciding to stick with the same tank size, we have not run out of hot water except on one day of exceptionally heavy usage, so I am fairly confident it was the right decision. But this form of range anxiety is real, and it has led me to be more mindful about my hot water usage — probably a good thing anyways.
5. You might need to care about decibels
Depending on where your water heater is placed, noise could be a consideration. I was nervous that the HPWH would be too noisy, since I know people with a utility room right next to a living area who do notice when the unit is working.
I decided that wasn’t a major factor since my HPWH would sit in the basement and it is a quiet model, rated at 50 dB. When it is working at full power, there’s a faint, barely noticeable hum in the room directly above the water heater. The kitchen fridge and the gas boiler are far louder though, so it is a non-issue for me.
6. The space around it gets colder
As I pointed out, the HPWH heats up the water by extracting heat from the surrounding air. It’s basically an air conditioner, so the area around the unit does cool by a few degrees. My basement is spacious enough that the drop in temperature isn’t noticeable, but this could be a consideration for tight spaces.
7. It will dehumidify your basement
An unexpected and pleasant byproduct is that I no longer need to run a dehumidifier in the basement (a significant energy cost in a humid basement like mine.) A HPWH draws in the moist air and passes it over a cool evaporator coil. This causes the moisture in the air to condense into water, which is then drained away, leaving the air that blows out the back of the unit not only cooler, but drier.
8. Costs are higher upfront, but much lower in the long run
The retail cost of a HPWH starts at around $2,500. After adding installation costs, electrical work, and a healthy margin to recoup the high cost of sale, I received quotes ranging from $5,500 to $8,500 (for different tank sizes), all of which factored a $750 MassSave rebate. All told, once I claim the 30% tax credit in next year’s tax return, the net cost of my HPWH was just shy of $4,000.
Running costs for my old gas water heater:
The gas unit was rated for a consumption of 250 therms per year (I’m certain it was an under-estimate, but let’s stick with that)
The cost of natural gas in my area is $2.24 / therm, which means I had been paying at least $560 per year for hot water.
Estimated running costs for the HPWH:
Most credible reports I found estimate consumption between 2 and 2.5 kilowatt-hours (kWh) per day for a household of two, or between 730 kWh and 910 kWh per year.
At the 30¢ per kWh I pay in Massachusetts, annual costs for the HPWH will be in the range of $220 - $270. That is validated by this handy calculation which estimates $260 per year for two people.
I can also use the new HPWH’s vacation mode for the 4-6 weeks each year when the house is unoccupied and shave another $20 or so from the annual costs, and maybe another $10-$20 from not having to run the dehumidifier.
It looks like at the very top end of the estimates, the HPWH’s running costs will be less than $300, compared to at least $550 for the gas water heater. That’s a minimum savings of $250. More realistically, savings should be nearly $400 per year.
If I assume that the cost of getting a new gas heater would indeed have been half of the $4,000 I paid, those $2,000 would be recouped over 5-8 years. Because the HPWH will operate for at least 15 years, I can expect to save a minimum of $1,750 (7 years x $250) and probably $4,000 (10 years x $400) or more over its lifetime.
Much like the numbers I’ve been running for my EV, electrifying water heating has a hefty upfront cost, but it easily pays for itself in the long run.
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Resources
Massachusetts Clean Energy Center and the Department of Energy do a pretty good job of explaining water heater choices.
For general electrification, go to The Switch Is On or Rewiring America.
I got a HPHWH and I think I regret it. I wish I would have gotten the unit that combines with the standard HP, moving the compressor and the cold it brings (in winter) to the roof rather than right next to the master bedroom. But we didn’t want to add cost and complexity to the whole thing.
Thanks for sharing your experience with HPHW. I’m curious if you considered one of the 120V models from Rheem or A O Smith. The manufacturers recommend upsizing the tank size, but you’d avoid the cost of running 220V service to the unit.
BTW, I haven’t personally replaced ours (tankless gas), mostly because I haven’t walked into a flooded utility room, but have had several contractors quote outrageous fees to get the ball rolling for an eventual replacement.