April 2026 EnergyWiseSM Tip: Heat Pump Water Heaters

April 2026 EnergyWiseSM Tip: Heat Pump Water Heaters
By: Energy Efficiency Program Manager Cory Fuehrer

Most homeowners who have heat pumps use them to heat and cool their homes. But a heat pump also can be used to heat water. You may have already seen one of these units in a “big box” or appliance store and wondered what it was and how it worked. Here are the details:

Heat pump water heaters use electricity to move heat instead of generating heat directly through electrical resistance. It takes a lot less electricity to transfer heat than it does to generate heat. Therefore, heat pump water heaters can be two to three times more energy efficient than conventional electric resistance water heaters.

To move the heat, heat pump water heaters work like a refrigerator in reverse. While a refrigerator pulls heat from their interior and dumps it into the surrounding room, an air-source heat pump water heater pulls heat from the surrounding air and moves it into their internal water tank. Another type of heat pump water heater has indoor and outdoor components that move heat from outside the home. Still others are integrated with other space conditioning heat pump systems, which combine all the required equipment into a single unit located inside home.

Stand-alone heat pump water heaters, which contain all the necessary equipment in one unit, require installation in locations that remain in the 40º– 90ºF temperature range year-round. Rooms housing heat pump water heaters should provide at least 500 to 1,000 cubic feet (28.3 cubic meters) of air space around the unit. As heat is transferred into the hot water tank, cool exhaust air can be vented back into the room or ducted outdoors. Ideal locations for installation are in spaces with excess heat, such as a furnace room. The temperature of the room in which the unit is installed will drop when it is operating by 2 F° to 6 F° and perhaps even more during periods of high demand for hot water.

The energy to feed the heat pump water heater can come from passive solar gain, heat from a conventional heating system, the warming effect of soil surrounding a basement wall, or any other heat source. The cooling of air while the unit is operating is especially advantageous in the summer. If the unit is installed in a basement located in a humid region, it also removes moisture from the air, which reduces and may eliminate the need for a separate dehumidifier. Since the heat pump water heater operates as dehumidifier, a condensate drain must be available.

In their “heat pump only” mode, heat pump water heaters cannot heat water as quickly as electric resistance water heaters. In this mode, they can only generate about 8 to 10 gallons per hour. To make up for this basic deficiency in performance, heat-pump water heaters are equipped with electric resistance elements that are energized whenever the heat pump cannot keep up with the demand for hot water. This feature improves the performance of the unit but does reduce its overall efficiency.
Most heat-pump water heaters have controls that allow a homeowner to choose one of three modes of operation:

• Heat-pump-only mode (the most energy-efficient).
• 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).

A study in the northeast U.S. revealed that households installing a heat pump water heater could save between $40 and $270 per year when compared to using an electric-resistance water heater. Savings calculations were based on a family household that uses 35 gallons of hot water per day, with an electricity cost of 17 cents/kilowatt-hour. Lower end savings were seen when the heat-pump water heater was installed in a bad location (a small, cold room). Conversely, the high end of the savings scale was seen when the unit was installed in a good location (a large, warm room).

Your local public power provider, in partnership with Nebraska Public Power District, wants to help you make the most from the energy you use to produce hot water in your home or business. For more ideas on saving energy while running your business or home, along with possible EnergyWiseSM energy efficiency financial incentives to help with the cost of upgrading to a heat pump water heater, contact your local utility or visit www.energywisenebraska.com for additional details.