Heat Pump Water Heaters

Higher efficiency standards

According to the Department of Energy efficiency standards, electric water heaters with more than 55 gallons and up to 120 gallons of capacity must either:

  • Be designed to operate at full capacity only when connected to a load management program.
  • Be nearly 200% efficient.

Only heat pump water heaters (HPWHs) are able to meet a 200% efficiency standard.

Advantages and disadvantages of heat pump water heaters


  • They operate with high efficiency because they use energy only to collect and transfer heat from the air.
  • They provide space cooling where they’re located—a good thing in the summer.
  • They dehumidify the space around them, potentially replacing a dehumidifier.
  • Multiple operational mode options offer manual and automatic adjustment, allowing the system to switch from heat pump to electric resistance mode when hot water supplies are low so they can be recovered in less time.
  • Some models include a vacation mode to save energy when you're away.
  • Cold climate models are being added by manufacturers that will extract heat from outside air in winter and exhaust cold air to living spaces in summer.


  • More mechanical parts mean increased maintenance. You'll need to clean coils and evaporator filters regularly.
  • Higher costs to purchase and install.
  • They require more space to meet the air flow requirements of the heat pump module.
  • They operate at lower efficiency levels in our northern climate. By drawing heat from the surrounding air, they place higher demand on central heating systems resulting in efficiency losses during the winter season.
  • Recovery is slow in heat pump only mode. If the hot water supply depletes, it may take five hours to fully recover in heat pump mode. While you can switch to electric resistance for faster recovery, you'll lose the efficiency of the heat pump mode for that time period.
  • Fan and compressor operations are noisy. This may be an issue if placed in a living space or near a basement family room.
  • Systems may not operate properly with load management (off-peak) programs.

How heat pump water heaters work

HPWHs transfer heat from the surrounding air to heat water. Because they move rather than create heat, they can be extremely energy-efficient.

The evaporator vaporizes a refrigerant. A fan moves the surrounding air and the refrigerant absorbs the air's heat. The heated refrigerant then moves to the compressor, where pressure and temperature increase. The heated and compressed refrigerant runs through the condenser inside the storage tank where the heat transfers to the water supply.

Electric resistance elements operate as a back-up heat source if hot water supplies are depleted and faster recovery is needed.

heat pump water heater diagram

Image credit: Department of Energy