A no-brainer: ENERGY STAR-Certified Heat Pump Water installations with Electric Water Heater replacements


Do you know what the second largest home energy user is? Most would guess the refrigerator, dishwasher, lighting, or washer/dryer. Or you might even be inclined to point to that large screen TV that seems to be on all the time. However, despite often being out of sight, hot water heaters earn the distinction of being the second largest home energy user. Those hot showers and baths will cost a family of four more than $600 per year with a standard electric water heater.

There is now a way to cut these electric water heating costs in half and save your customers thousands of dollars over the lifetime of the water heater — ENERGY STAR certified heat pump water heaters (HPWHs). Take a moment to learn: how much HPWHs save, how HPWHs qualify for generous incentives, and the differences between HPWHs and conventional electric water heaters.

ENERGY STAR-certified HPWHs will turn a routine electric water heater replacement into an opportunity to save your customers enormous amounts of money, support a healthier environment, and position yourself as the go-to expert in installing an innovative energy savings technology.

How much can I save my customers?

HPWHs cut the high costs of electric hot water heating in half, and represent one of the most cost-effective and signifciant savings available in a home. Table 1 shows HPWH savings based on household size.

A family of four can save $330 per year with a HPWH compared to a conventional electric water heater. Costing roughly $800 more than a standard model, the energy savings will pay for that incremental price in 2.4 years. Over the 13-year lifetime of the HPWH, a family of four will save an astounding $3,500 and prevent over 20 tons of greenhouse gas emissions. A family of six will save over $5,500! These savings assume electricity rate of 12 cents per kWh — the national average.

How much are utilities offering?

Thousands of dollars in lifetime savings is a big incentive for purchasing an ENERGY STAR certified HPWH, and generous utility incentives sweeten the deal even further! Utilities understand that energy efficient products often cost more and that “first-cost” is a difficult barrier to overcome, regardless of how compelling long term savings are. To push the market towards efficient products, they often offer incentives on energy saving products.

Table 2 shows examples of the utility incentives available across the country for HPWHs. Some incentives are as high as $1,000, more than the estimated cost differential compared to standard models, to encourage consumers to purchase HPWHs. Check with your local utility to determine which incentives are available in your area.

How is an HPWH different?

Using the same technology as a refrigerator, a HPWH transfers heat from surrounding air to the water in the tank — producing cool dry air along with hot water (see diagram showing the heat pump, which sits atop the water tank). During periods of high hot water demand, HPWHs switch to standard electric resistance heat — which is why they are often referred to as “hybrid” hot water heaters (see diagram showing both the electric heating elements and hot refrigerant lines in the water tank).

HPWHs also have programmable settings; “economy” mode uses only the heat pump setting, and “vacation” mode shuts down the heater for a set amount of time.

Due to this unique way of heating water, HPWHs have some simple requirements regarding location. An ideal space for a HPWH is in an unheated basement near a furnace or a garage in a very hot climate. In general, HPWHs should be installed in unoccupied space where:

  • Cooling of the space will not be an issue.
  • Sufficient height and a condensate drain are available.
  • At least 1,000 cubic feet of surrounding air is available that remains between 40° F - 90°F year-round.

Also, you should be aware that a HPWH will be heavier than a conventional unit due to the heat pump, make noise, like a dehumidifier, when it is running, and dehumidify the air — perfect for basement settings.

A tried and true technology, HPWHs have been installed in homes for more than a decade and are manufactured by the companies you know and trust — A. O. Smith, GE, Rheem, Bradford White, and more. They are available at all major distributors and big-box retailers. ENERGY STAR labeled HPWHs have been third party certified to meet stringent efficiency standards.

Next steps

To ensure ENERGY STAR certified HPWHs are installed on your next call for an electric water heater replacement, please take the following steps:

Check with your local utility to find out how large the rebates are for HPWHs.

Talk to your distributor or retailer to check on the availability of ENERGY STAR certified HPWHs for emergency replacements.

Explain to your customers the enormous savings opportunity through ENERGY STAR certified HPWHs by using ENERGY STAR’s HPWH “Soak in the Savings” fact sheet.

If you have any questions about HPWHs please go to www.energystar.gov/waterheaters or email ryan.steven@epa.gov.

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