Install a Heat Pump Water Heater to Save Cash

A faucet with coins instead of water.

Do you know what your home's biggest energy hog is? If you guessed that it's your water heater, you're correct. There's a way fix that though, and many homeowners are making the change. It's by converting from your old conventional water heater to a new hybrid one known as a heat pump water heater. Since it's a relatively new option, there's a lot of questions about it, including how it works and the pros and cons of buying one.

Heat Pump Water Heater vs. Conventional Water Heater

water heater

The first thing most people ask when they hear about a heat pump water heater is how does it differs from a conventional water heater. Like a conventional water heater, a heat pump water heater still uses electricity, but it just does it a little smarter. How so? Instead of using the electricity to directly heat the water through an element that has to run constantly in order to keep it hot, it moves the heat from the air outside of the tank into the inside of the tank to heat the water. Another way to think of it is to think of how a refrigerator runs: it pulls the heat from the inside of the appliance and then dumps it into the air outside of it. A heat pump water heater works very similarly, just in reverse.

Pros to Buying a Heat Pump Water Heater

The main pros to buying the heat pump water heater involve money, but there are a few more as well. Here's the top 4:

1. Lower Electric Bills

The main reason most people are changing over from the conventional style is for the amount they can save on their electric bill each year. How much are we talking about? Heat pump water heaters can save you anywhere from 50% to 62% a year on your hot water heating costs. To put that in perspective, just consider what half would save you. The average user of a conventional water heater will spend around $570 a year to heat their water, so cutting that in half (let’s round it up) means a savings of approximately $300 a year, or $25 a month. That's quite a bit when it comes to lowering an electric bill.

2. Extra Settings for Savings

It's not only that it saves money in the way that it operates on a daily basis, it's also able to save money because they usually come with settings that conventional water heaters don't have, such as timers that put it into sleep mode when you're gone, and a setting to tell it to only use the heat pump to heat your water. You can also set it back to auto/hybrid should you need a sustained hot water supply.

3. Going Green

Since it's so much more efficient, a heat pump water heater uses less electricity, which is good news for the planet and all of us on it.

4. Rebates and Tax Incentives

Most electric companies offer rebates when you purchase a qualifying heat pump water heater. To qualify, they usually need to fit into the Energy Star standards, which is what you'd want anyway if you want to save money. This is also the rule of thumb for getting any local or federal tax incentives. Between rebates and incentives the water heater may cost you close to nothing in the end.

Cons of Buying a Heat Pump Water Heater

There are three main cons to a heat pump water heater versus a conventional water heater, and just like the pros, most involve money.

1. Installation

water heater and tool box

If you're not very handy and don't feel confident that you could install a conventional water heater, you'll probably want to hire a plumber to install this one for you. After doing some calling around to some local plumbers, I found that they take around 4-5 hours to install it. They also said that a homeowner can indeed install it themselves, and shouldn't have any trouble doing so, especially if they've installed a conventional water heater before and of course follow all installation directions very carefully. There are a few differences, such as having to run a condensation line to the outside and making sure you install it in a large enough, and warm enough room. You will want to check first with your code enforcement office to make sure that self-install isn't against the rules in your area.

2. Initial Cost

The second con is that it's a lot more expensive to buy the hybrid water heater than it is the conventional one. However, this can be offset greatly with rebates, tax incentives and the fact that in a year or two you could recoup most, if not all of your initial investment.

3. Location, Location, Location

The third and final con is that it's not always possible to place this water heater in the same place as you had your old one. That's because the heat pump water heater will take every molecule of hot air that it can find and shove it back inside the water tank, meaning any rooms near that water heater will be very cold, all the time. It also needs to be in a place in your home that has a temperature of 40-90 degrees Fahrenheit, so installation areas may be a bit tricky for some homeowners.

Final Considerations

Some counties, cities, and states are beginning to make it a requirement and not a request when it comes to upgrading your water heater. That's because the savings are not only big for you, they're big for them when it comes to power consumption. This may take awhile to catch on everywhere, but just in case, it's best to check with your local code enforcement office or power company to see if you have to install a heat pump water heater instead of a conventional one if yours goes out. Your local home improvement store usually knows the answer to this question as well.

Like everything, there's many pros and cons to buying a hybrid water heater. Fortunately in this case, the pros mostly outweigh the cons, so if you can afford to shell out the initial investment and wait for it to repay you, it's definitely worth it.