Back to blogs

Is a Heat Pump Water Heater Right For Me?

You may be hearing about heat pump water heaters more than ever right now with updated tax incentives and upfront rebates. But is a heat pump water heater right for your home? We’ll help you decide.

First: What is a heat pump water heater? 

Heat pump water heaters or HPWHs pull warm air from their surroundings and then “pump” it into your water storage tank, hence the name. In order to heat water, the heat pump water heater sponges up the extra heat in a room and pushes it through a compressor unit to create hot water, the same way refrigerators use coils and condensers to extract heat and therefore cool and freeze. 

These units can also be called hybrid water heaters, since in addition to their condenser pump that pushes heat into the water, they also have a backup electrical heating system to help heat water during peak times when your household calls for more water than what your hot water storage tank holds. 

Check out the diagram at the bottom of this article by to see a HPWH in action!

What advantages does a heat pump water heater have over other tank water heaters? 

Heat pump water heaters provide a massive energy savings compared to traditional storage tank water heaters. They may take up about the same amount of space, but can provide just as much hot water using 2-3 times less energy than a gas or traditional electric water heater. Less energy use can result in lower electrical bills, and installing a heat pump water heater to replace a gas water heater means cutting down on your gas bill, too. Eliminating a natural gas appliance in your home can also cut down on carbon emissions and create more clean air for your family to breathe, all while experiencing almost unmatched energy efficiency. 

Right now, there are incredible tax incentives and upfront discounts for heat pump water heaters, too. The Inflation Reduction Act offers upfront discounts that can cover up to 35% of the costs for a new heat pump water heater, depending on household eligibility. Get the details here. 

There could be more savings available depending on your state, too – there is currently nothing in the IRA stating that homeowners can’t stack state rebates on top of these federal incentives. Enter your zip code into ENERGY STAR’s rebate finder and see what’s available to your state right now.

Why choose a heat pump water heater instead of a tankless water heater? 

There are a couple of reasons to stick with a traditional tank water heater as opposed to jumping all the way to a high efficiency tankless water heater. Heat pump water heaters are less expensive to purchase, and can be less expensive to install upfront, especially if you can reuse a lot of the same HVAC and plumbing from a previous tank water heater installation. 

Even accounting for the installation costs, the decreased operating costs of a HPWH will have you looking at serious savings on your electric bills for the lifetime of the unit. 

What if I don’t have the space for a heat pump water heater? 

There are very few downsides to heat pump water heaters, but one of them is that they need at least 800 cubic feet of surrounding air to work properly, according to This is approximately a 10 ft. x 10 ft. room, with 8-foot ceilings. Most people will install them in a basement, garage, or large storage room. If you don’t have this kind of space, we’d recommend a tankless water heater instead. (We really love the latest model from Rheem!) The bonus to a furnace room installation is that the excess heat in the room will boost the efficiency of the heat pump water heater! And it can help to dehumidify the air in a basement as well, perhaps replacing a high energy consuming dehumidifier. 

Temperature may also be a consideration. HPWHs need a year-round ambient temperature of 40º–90ºF, which makes a basement in cold climates the perfect location. If your installation location doesn’t fall in that range, a heat pump water heater won’t be the right choice for you. 

How much hot water do you need and how fast do you need it? 

The most important thing to consider when deciding how big of a hybrid water heater to install: a first hour rating or a peak hour demand. This is the amount of hot water you need in the most demanding hour of the day, often in the morning when everyone is showering and getting ready for the day, or the evening when running laundry or the dishwasher and drawing a bath. has a calculator to help you determine your peak hour rating, and our installation professionals at Water Heaters Now can help you walk through how many showers, dishwasher or washing machine loads, and more you will run in the peak hour. 

Because the heat pump technology is heating water more passively than a conventional electric water heater, it does work more slowly. The electric heat pump works in stages to heat water from groundwater temperature to the 120 degrees you’d like to see coming out of your faucet for a hot shower. For example, if the water temperature coming into your home is 40 degrees, and the surrounding air in your basement is 65 degrees, the heat pump water heater will take that 25 degree difference and put it into the water. Then it will do it again and again, raising the water by 25 degrees each time. It certainly delivers the hot water you need, but can take a little more time to do it. This is what creates such a cost savings when installing a heat pump water heater. 

How do I choose the right heat pump water heater? 

Look for ENERGY STAR rated hot water heaters that give you an estimated dollar amount of energy savings upfront. This will help you determine if the upfront cost of installation is going to be worth it over the long haul. Then, hire a plumber or HVAC professional that has experience with installing heat pump water heaters. According to the NRDC, less than 2% of water heaters in use today are HPWHs, which means many installation professionals have never installed one before.

Also, take into consideration the warranty available on the unit. Water Heaters Now installs only professional grade hybrid heat pump water heaters which can last 15 years or longer, with a professional-grade warranty to match. 

Lightning fast quotes.

Our water heater experts are standing by to help. Complete our form or call to schedule service.

Get a quoteA picture of a water heaters now technician.