Hot Water

Get Yourself into Hot Water

Water heaters consume about 14% of home energy use.  Typically, your water heater sits quietly in your basement and works for years with little notice, and because the fuel it uses is generally shared with other home needs, there is no easy way to know how much energy is going to supply your hot water. So your hot water may be costing you more and causing more CO2 emissions than it should.  When it quits, chances are that the easiest thing to do is to replace it with a similar unit.  But today there are new options, so that choice may be the wrong one if you would like to both stretch your dollars and minimize your carbon footprint.

What is a Heat-Pump Water Heater?

All conventional domestic water heaters use ‘direct’ heating of the water, using gas, propane, oil or electricity; the energy content of the fuel is directly or indirectly applied to the water to heat it.  A heat-pump water heater is different – it removes heat energy from ambient air and uses that energy to heat water – similar to the heat pumps used for home heating.  The big deal is that moving heat requires a fraction of energy of that needed to create the same amount of heat, making a heat pump significantly less expensive to operate than electricity, propane or oil, and comparable to natural gas. Most models are so-called hybrid water heaters, combining heat pumps for highest efficiency with electric resistance for fastest heating in times of high demand.  The Efficiency Factor rating is a model’s relative efficiency compared with that of conventional electric water heaters, which is typically 3.0 or higher for efficient heat pump water heaters.

Recommended Actions

  1. Ask at least two local plumbers for a quote for heat pump water heaters and make sure they are aware of any potential incentives. They will help you decide whether this is a good option for your home. (See also last Question below, in bold)
  2. Choose an installation contractor and install a heat pump water heater, taking advantage of the available rebates.

Financial Considerations

Cost and Savings

Good candidates:

  • If your tank is older than 15 years, get ready NOW for a heat-pump water heater.
  • If you switch from a conventional electric storage to a heat-pump water-heater, a family of four can avoid 1600 lbs/yr of CO2 emissions and save ~$335 per year in electricity costs.
  • If you switch from a conventional oil storage to a heat-pump water-heater, a family of four can avoid over 1900 lbs/yr of CO2 emissions and save ~$165 per year in oil costs.

Available Incentives

  1. Incentives change often. MassSave offers a $600 rebate on qualified models up to 55 Gallons, replacing a conventional electric water heater with a heat-pump system, plus 0% loans up to $25k and 7 years.

Typical payback periods?

  1. Replacing a conventional electric hot-water heater: typically 2 to 4 years for a family of four.
  2. Replacing an old oil-fired hot-water heater: Depends on the situation, but annual operating cost should drop by about half (typical annual oil cost for family of four is $400 to $500 at current oil prices). Payback period will vary but will typically be about 8 years without a rebate.
  3. If you have a solar PV system that generates excess electricity for your home, a heat-pump hot-water system can further reduce both costs and CO2 emissions. Payback depends on the size of your solar PV array.

Environmental Benefits

According to the Northeast Energy Efficiency Partnerships (NEEP), if all standard electric resistance units 50 gallons or larger were converted to energy efficient technologies like heat pump water heaters, approximately 340 million kWh in annual electricity savings would be achieved in the northeast. That is more than 41,000 household’s annual electricity use! Installing a heat pump water heater can have a 40-50% reduction in global-warming gases emissions. The tons of CO2 prevented would be like taking 50,000 cars off the road for a year.

These environmental benefits are due to the fact that heat pump water heaters use one-third as much electricity as a conventional electric resistance water heater. The decision to switch to a heat pump water heater is not only beneficial to your wallet, but also to the environment.

Other Benefits or Potential Draw-backs

When making a decision to switch one’s water heating methods, it is important to weigh out all of your options, to ensure you meet your personal needs and that of your home all while being conscious of energy usage. Below are several advantages and disadvantages of investing in a heat pump water heater to help make that decision.


  • 40-50% energy cost savings compared to conventional electric and oil (at current gas/oil prices)
  • 40-50% reduction in emissions of global-warming gases
  • Can partner nicely with a home solar-PV system to reduce both costs and CO2 emissions
  • Can help cool your home in summer


  • No energy cost saving vs. natural gas (unless coupled with home solar PV system of sufficient capacity)
  • Adds somewhat to home heating load (because it cools local air)
  • High install cost (typical up to $1,000 cost premium over conventional systems)
  • Noise:
    • Louder than a refrigerator
    • Quieter than a dehumidifier


Q: Are heat pump water heaters well-suited for cold climates? A: Heat pump water heaters offer savings, year-round regardless of climate. According to EnergyStar, installing a new heat pump water heater “can save up to $3,500 in energy costs over its lifetime”.

Q: Where will it be installed? A: Heat pump water heaters need to stored in a warm space inside with enough air space around it. Ideally the space should remain between 40° and 90° F year-round with 1,000 cubic feet of air space around the heater. In colder climates, it should be placed in an unconditioned or semi-conditioned basement; if not the heaters will cool the surrounding air, which will raise heating bills in the winter months.

Q: Do these heat pump water heaters require maintenance?  A: Yes. The heat pump water heaters require annual maintenance, such as changing air filters.

Q: What should I ask when looking for a contractor? A: Finding a good contractor to install a system and provide recommendations is an important step of the process. A few tips for choosing a contractor would be to request cost estimates in writing, ask for references, and check if the company will obtain local permits if any are necessary.


To further your research into heat pump water heaters, here are some helpful resources:

  1. EPA EnergyStar Certified Water Heater List
  2. guide to Replacing Your Water Heater
  3. (search for ‘water heaters’)