If you’re currently using an electric hot water heater, a heat pump water heater can cut your water heating bill in half or more.
We typically hear the term heat pump associated with home heating and cooling but the same process can be used to heat water. A heat pump water heater uses electricity to transfer heat from the surrounding air versus traditional electric hot water heating where heating elements heat the water directly.
To move the heat from the surrounding air, heat pumps work like a refrigerator in reverse. A refrigerator pulls heat from inside a box and dumps it into the surrounding room. This is the heat that has been removed from the interior. A heat pump water heater pulls heat from the surrounding air and dumps it—at a higher temperature—into a tank to heat water so when it operates it cools the air surrounding it.
The following diagram shows a cut away view of a traditional electric water heater. The upper and lower resistance heating elements shown heat the water directly:
Because it needs warm air to extract heat from, a heat pump water heater require installation in locations that remain in the 40º–90ºF range year-round and provides at least 1,000 cubic feet of air space around the water heater. Because they remove heat from the air, they work more efficiently in a warm climate. It is best to install them in a space with excess heat. The good news is that your furnace room can be a good source of heat for the heat pump water heater during the winter months. It is important to remember that a heat pump water heater will not operate efficiently in a cold space. Heat pump water heaters typically also include the resistance heating elements found in a traditional electric hot water heater as a backup to insure that the hot water you are looking for is always available but you can switch them off. The following diagram shows a cut away view of a heat pump water heater:
Heat pump water heater systems are a more complex product than a traditional hot water heater and therefore have a higher initial cost. However, they have lower operating costs, which can offset their higher purchase price Since the unit is more complex, does this mean that it will be less reliable? Since it operates like a refrigerator in reverse, you can think about just how reliable refrigerators are and expect to have a similar level of reliability from your heat pump hot water heater.
A 50 gallon heat pump hot water heater currently costs around $1600 as compared to a 50 gallon traditional electric hot water heater that costs around $400 so they do cost 4 times as much. A traditional electric hot water heater, at the national average electric rate of 11.4 cents/kilowatt hour, costs $560/year to operate. With a 50% improvement in efficiency, the annual costs savings are $280 resulting in a payback of the unit cost in 4.3 years. If we assume a 15 year life for the heat pump water heater, you will save $3,000 over its lifetime!
A heat pump water heater looks similar to a traditional water heater but is typically taller due to the condenser unit on top so be sure to measure the height available where you’ll be installing it. It also requires a drain or pump to remove the water that is condensed from the air during operation. Your air conditioner also condenses water that must be drained so if your heat pump water heater is located near your air conditioner / furnace a drain or pump should be available.