Electric Heat Pump Water Heaters
Buying Guide and Best Models
(updated 2020)

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Electric heat pump water heaters are ultra-efficient appliances that use two technologies for water heating and are ideal for high-demanding residential home and commercial applications.

Explore the main features of the heat pumps, benefits, the most popular manufacturers, and check out the review of the best models.

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  1. How does the heat pump work
  2. Main components
  3. Types
  4. Popular models
  5. Installing tips
  6. Advantages
  7. Buying tips
  8. HP comparison

How does the heat pump water heater work

Electric heat pump water heater (HPWH) is designed to draw the heat from surrounding air and transfer the extracted heat to water.

It actually moves the heat from one place to another, rather than heating the water directly. It works similarly to the refrigerators or air conditioners but in reverse.

Electric heat pump water heaters use the principle of refrigeration to draw the heat from the air, then increase its temperature and deliver it where it is needed, using the built-in fan, refrigerant, condenser, evaporator coil, and compressor.

The heat from the air brings the refrigerant to vaporize, which goes to the compressor where the refrigerant fluid further increases its temperature. The hot vapor from the refrigerant enters the condenser coil where it transfers its energy to the cooler surrounding water located in the heat exchanger, and further in the storage tank.

In addition to heating water, the surrounding air is also cooled and dehumidified. This is another benefit to heat pump's owners, as the cooled air can be used for cooling houses and therefore reducing the energy consumption.

Main components

  1. Fan
  2. Compressor
  3. Evaporator
  4. Condenser
  5. Refrigerant
  6. Insulation
  7. TPR valve
  8. Cold water inlet
  9. Hot water outlet
  10. Upper and lower thermostat
  11. Drain
  12. Anode rod


There are a few types of heat pumps available for you to buy:

An integral electric heat pump water heater comes as one package and features the pump connected to the storage tank and factory-installed resistance heating elements, used for backup heating. It has the same footprint and connections as the standard storage tank, and installation is similar, except requirements for the condensate drainage.

These are also known as hybrid water heaters because they can switch to standard heating elements when there is a high demand for hot water. The "hybrid" mode is available on the control panel, and the heat pump automatically switches where there is a need for it.

Add-on water heater heat pump, or retrofit unit, is installed in conjunction with an existing heater, either on the top of the tank or wall-mounted. It replaces the function of the tank's lower heating element, being the primary heat source. A small pump has to be installed between the tank and the pump to circulate the water.

There is also a geothermal heat pump that uses the energy from the ground during the winter and is used mainly for home heating. By adding a small heat exchanger, called a desuperheater, you can heat water as well.

Installing tips

Heat pumps do not generate energy directly, and while they operate, they tend to cool the space they are in. This is the reason why the best spots for the installation of heat pumps are isolated locations. These include garages, attics, utility rooms, basements, and rooms where the average temperature is between 40 F and 90 F year-round, but with sufficient air.

In colder climates, they will be installed indoors and would provide cooling and dehumidification inside the room where it is located.

There is a tendency in colder areas that the ice builds up on the condensing coil. This is what causes restrictions in the airflow and damages on the internal components. The recommendation is to buy a pump with the "Defrost Mode" so you will never experience such operation problems.

You should consider installing a heat pump water heater if your home has a high demand for hot water, where the electricity and gas rates are high and where gas is not available.


When it comes to efficiency and money savings, heat pumps are a better solution for heating the pool than the gas water heaters. It is also easy to install; it is reliable and efficient.

As mentioned before, the HPWH provides an energy-saving alternative to the electric heaters because less energy is needed to move the heat than to create it.

Electric heat pump water heaters are the only electric heaters that qualify for a tax credit. In order to qualify, the pump has to have an energy factor, EF, at least 2.0, and a minimum first-hour rating of 50 gph. Look for the Energy Star label, and you will be able to save up to 30% of the cost or up to $1,500 with the included installation and labor costs.


  • Higher initial cost.
  • More prone to failure than the traditional electric type.
  • While they heat the water, they also cool the room, which is not good in cold regions.

Buying tips

Electric heat pump water heaters have more than twice the efficiency of the conventional electric water heaters, and they perform the best in warmer climates while it cools and dehumidifies the surrounding air.

The efficiency depends on the surrounding air, incoming water temperature, heat transfer characteristics of the unit, and losses within the system.

When buying the electric heat pump water heater, use the three parameters for comparison:

  • The heating coefficient of performance, COP, is used for the performance, and it defines the ratio of the energy of the heat pump to the electrical energy unit.
  • Energy Factor or EF is the ratio of energy output to energy input. An average value for these pumps is between 2 and 2.5 (for reference; maximum EF for the electric heater is close to 1).
  • The First Hour Rating (FHR) – higher – better.

Comparing the heat pumps

Our recommendation is to look at the Rheem manufacturer as it produces units with the ultra-efficient heat exchanger made of Titanium. Specially designed heat exchanger helps in the reduction of deposit build-up also.

The GeoSpring electric heat pump water heater from GE as the Energy Star unit is also a good pick, featuring multiple settings including high demand and hybrid mode, electronic back-lit LCD display, flexible and easy-to-use electronic control panel.

Here is the comparison chart of the popular models:

Model/Features Size
American 50
AO Smith
Rheem 50

Other popular heat pump manufacturers/brands are AirGenerate, Stiebel Eltron Accelera 300, E Tech by AO Smith, North Road Technologies, Sanyo, Hitachi, Toshiba...

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How much can heat pumps save

According to the American manufacturer, annual savings are around $428, cost savings up to 68%, with the payback in 2-3 years. As per AO Smith, Voltex hybrid can save you about $305 annually, reduce water heating costs up to 73%, while the payback is the same 2-3 years.

In addition to the above two brands, the estimated yearly energy costs of Rheem heat pumps is around $161 per year.


The main problem with the heat pump water heaters is the initial high purchase and installation costs, but its significant reduction in energy consumption can offset these. These products are a good investment as they reduce the heating costs by as much as 50% while offering the "green" technology with a reduced impact on the environment.

In addition to that, heat pumps have a longer lifespan than the conventional tank-type water heaters, 13-15 vs. 8-12 years.

Related articles

Heat pump buying guide
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AO Smith Voltex
GE GeoSpring
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