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Chances are, you don’t spend a lot of time thinking about your water heater, as long as it’s working. But when your water heater quits at the end of its 10-15 year lifespan, you might just find yourself standing in a cold shower. Or worse, the heater’s tank has corroded through, turning your basement, garage, or utility room into a soggy mess and running up additional bills for drywall repair and carpet cleaning.

Still, spending money to replace an operating water heater is a tough sell to most homeowners; it’s akin to spending for a new roof—why fix something if it doesn’t leak? But changing out your existing electric water heater for a new one that uses a heat pump and the air in your home to warm water will help your bank account and the planet.

The initial purchase price for a heat-pump water heater (HPWH) is higher than a conventional electric-resistance unit. My local big box lumberyard sells water heaters made by Rheem. A conventional 50-gallon electric water heater with an LED control panel and a 12-year warranty sells for $587. A similarly equipped and warrantied HPWH lists for $1199.

But that’s just the very beginning of the equation. If you buy an ENERGY STAR-certified heat-pump water heater in 2016, you’ll receive a $300 Federal tax credit, which means that you can deduct that amount from the taxes you owe the government next April. Learn more about the federal tax credit at www.energystar.gov/taxcredits. There are also state-by-state and power-company rebates and refunds available on ENERGY STAR models. My home state of Connecticut will give me up to a $400 instant rebate on the cost of an HPWH if I buy it from a participating distributor. Go to www.dsireusa.org for a searchable database of state incentives. Visit www.energystar.gov/rebatefinder to find utility rebates, too, or check with your utility provider.

And then there are HPWH’s low operating costs: The U.S Environmental Protection Agency (EPA) calculates that a family of four will spend $330 less on hot water every year by switching to an HPWH from a conventional electric unit. That’s substantial, especially over the course of the heater’s life.

Courtesy of Energystar.gov

How an HPWH Almost Pays for Itself in Two Years

$1,199

- $1001

- $4002

$699

- $6603

$39

1. real savings on $300 Federal tax credit for those at 30% bracket

2. state rebate: Connecticut

3. $330 annual energy savings x 2 years

Another benefit of choosing an ENERGY STAR-certified heat-pump water heater is that the environmental benefits are also huge. According to EPA, if every residential electric water heater in the country were replaced with a heat-pump water heater, 140 billion pounds of annual greenhouse gas emissions would be prevented, equivalent to the emissions from more than 13 million vehicles.” Learn more at energystar.gov/waterheaters.

Richard Trethewey, This Old House’s plumbing and heating expert, says, “There’s no question that your existing electric water heater will eventually go south. Replacing it with a heat-pump water heater before that happens just makes good sense.”

Heat Always Moves from Hot to Cold

To understand how a heat-pump water heater turns 68-degree-or-cooler room air into 120-degree water, there are two facts you have to grasp: First, heat is a measurable unit of energy, and secondly, heat energy always moves from hot to cold.

Heat energy is expressed in calories, or more commonly for household purposes, as British Thermal Units (Btus). One Btu equals the amount of energy it takes to raise the temperature of a pound of water by one degree Fahrenheit or almost 252 calories. (Burning off the calories from eating a frosted donut is not really related to this discussion.) There are Btus of heat energy in all rooms, but a warm room has more than a cooler one.

Heat energy can be moved, always in the direction of more energy to less (or warmer to colder). Think of grabbing onto a steel tool handle in winter. Your hand suddenly feels chilled, but it’s not the metal’s coldness moving into you hand. What’s actually happening is that the heat energy from your hand is moving into the cooler metal. Your hand may feel cold but only because it has less heat energy in it, and, in fact, the steel has gotten warmer from your touch.

How it Works

In operation, a fan mounted on the top of an HPWH’s water tank pushes room air across a radiator-like grid filled with cold liquid refrigerant in a closed system of tubing. The refrigerant has a low boiling point, and the air’s heat raises the liquid’s temperature enough to turn it to a gas. A compressor then increases the pressure of the gas, further raising its temperature. A pump circulates the tubes filled with hot compressed gas down and around the cool water in the heater’s tank. The heat from the hot compressed gas moves toward the cool water, raising its temperature and cooling the gas back to a liquid where it is then pumped back to the radiator, and the fun starts again. Trethewey says, “Conventional water heaters make heat, but an HPWH just moves it.”

A heat-pump byproduct is cooled, dehumidified air. Some models allow you to vent that conditioned air to another room in the house, which can be a boon during summer months, but most models just blow that cooled air into the room where the unit it located. Similar to an air conditioner, an HPWH also produces a small amount of distilled water that has to be directed outdoors or into a drain, a consideration when you’re choosing a location for the heater.

HPWHs do use some electricity, but a lot less than a typical electric unit. Grid power is needed to run the fan and the compressor. Also, all HPWHs, sometimes known as hybrid water heaters, do have electric heating elements in the water tank that provide back-up hot water during times of very heavy usage. Lots of online user reviewers report always having plenty of hot water without ever having to use the back up electric power.

An LED control panel on the units let the user select the water temperature and choose between heat-pump-only mode, all-electric mode, and hybrid mode, which is a combo of the two and will only kick in if the hot-water demand is high. Most also have a vacation mode that allows you to input the number of days you’ll be away. During that time, the heater won’t operate, but it will start up before you return so you can come home to a hot shower and do loads of laundry.

Installation Considerations

Unlike other types of water heaters, you shouldn’t install an HPWH in a small closed closet because it wouldn’t have enough warm air to power the heat pump. Most manufacturers recommend a space that’s at least 100 square feet.

Keep in mind that an HPWH is going to remove heat and lower the temperature of the room where it’s installed, so putting one in a space that you already pay to heat could be robbing Peter to pay Paul. But along with the Btus made by your heating system, there are lots of other heat sources in a home: solar gain from windows, cooking equipment, and keep in mind that every person is a 98.6-degree source of heat. A room with a clothes dryer or a utility room with a furnace is an ideal location.

Your energy-dollar savings will vary. An HPWH installed in an unheated garage could rely more heavily on electric-heat mode than a utility-room installation, especially during the winter. And cooler intake water will require more Btus to get hot.

If you’re replacing a conventional electric water heater, chances are there’s already a 220-volt wire in the room, but if your existing unit is gas, you’ll need an electrician to run a 220 circuit.

HPWHs are taller than conventional water heaters because of the heat pump located on top of the tank. Check manufacturers’ specs before buying; it’s likely that some units won’t fit in a low-ceiling crawlspace.

Another consideration is sound. HPWHs can be as noisy as some window air conditioners, something you might not want to listen to if, for example, you’re thinking about an upstairs-laundry-room installation next to the bedrooms.

Manufacturers’ websites are a good source for more information. Some have energy-savings calculators and water–heater-sizing recommendations based on the number of occupants in a home. You’ll also find searchable installer and distributor databases. And all the sites are filled with specifications on their various models, such as how much insulation surrounds the water tank. Insulation slows the movement of heat, something you want to consider after your new heat-pump water heater moves heat into the water.

<p>Download this <strong><a href="http://www.thisoldhouse.com/sites/default/files/es-waterheaterinfographc-sept2016.pdf">helpful guide to savings</a></strong> when upgrading your water heater to ENERGY STAR!</p>

Download this helpful guide to savings when upgrading your water heater to ENERGY STAR!

Resources

Click here to learn how to install your own ENERGY STAR heat-pump water heater in this step-by-step video with Richard Trethewey. And, remember, if your water heater is older than 10 years, the investment now will assure comfort, savings, and peace of mind to come. Visit ENERGY STAR for more information.