Energy Efficiency Clash: Heat Pump Vs Electric Water Heater

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By Debarghya Roy

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Are you considering a new water heater for your home? With so many factors to consider when making this important decision between a heat pump and an electric water heater, it is essential that you understand all aspects of each type of system before settling on one.

In this blog post, we will look at the differences between heat pumps and electric water heaters, so that you can make an informed choice for your home.

Key Takeaways

  1. Heat pumps are up to three times more efficient than traditional electric water heaters, resulting in significant energy cost savings over time.
  2. Electric water heaters convert electricity into thermal energy and transfer it to the incoming cold water at a faster rate than heat pumps.
  3. Heat pump models come with added features such as digital controls, smart thermostats, touchscreens, etc., that allow for greater control of their performance and increased efficiency over time.
  4. It is important to consider installation costs when investing in a HPWH since they can be up to $2000 or more if special wiring needs to be done compared with conventional electric tanks which require much less cost upfront.

What Are Heat Pump Water Heaters?

Heat pump water heaters are heating systems that are used to transfer thermal energy acquired from the air outside into heated water, significantly improving efficiency and reducing energy consumption.

Heat Pump vs Electric Water Heater

Explanation Of Heat Pump Mechanics

  • Heat pump water heaters use a technology that is similar to air conditioners and refrigerators. 
  • A heat pump captures warm air or ground lower energy from its source, typically outdoors, and moves it to indoors where it can be used for heating purposes.
  • This process uses electric power to move the warmer air collected outside into an interior location where the heat is used to warm up domestic hot water in a tank-style heater system.
  • During this process, the refrigerant gas cycles between two coils made of copper tubing:an evaporator and condenser coil.

Advantages Of Heat Pump Water Heaters

  • Heat pump water heaters require less energy than traditional electric models to produce hot water.
  • Heat pumps can work as both a heating and cooling system by using advanced technologies such as “reverse cycle refrigeration”.
  • Heat pump water heaters are eligible for tax credits and may qualify for local utility rebates or other incentives.
  • Heat pumps work well in all climates and come in both indoor and outdoor models, allowing for greater installation flexibility depending on space constraints.
  • They typically have long warranties and require little maintenance compared to traditional electric water heaters.
  • Most HPWHS also come with added features such as digital controls, timers, smart thermostats, touchscreens, etc., that allow users greater control over the performance of their systems and make them more efficient over time.

Disadvantages Of Heat Pump Water Heaters

The initial cost of purchasing and installing a HPWH is relatively high compared to conventional electric water heaters due to their advanced technologies.

Energy Efficiency Ratings And Savings Of Heat Pumps

Heat pump water heaters are more energy-efficient than traditional electric resistance water heaters, and they offer an attractive investment due to their cost savings.

Heat pumps in particular have higher recovery rates, meaning that the hot water reaches consumers faster than from a conventional model. 

Specifically, they have a Uniform Energy Factor (UEF) rating which measures efficiency and translates into potential savings for households.

This UEF is calculated by measuring the amount of hot water produced per unit of electricity inputted over a given time frame.

Therefore, choosing a high performance product with an excellent rating factors greatly into how much money an owner can save in terms of annual operating costs.

With proper installation and maintenance, many homeowners report significant reductions in their utility bills after switching out their outdated units for newer models with better energy ratings.

What Are Electric Water Heaters?

Electric water heaters are powered by electricity to produce hot water through electric resistance heating elements, and are the most common type of standard water heater found in households.

Explanation Of Electric Water Heater Mechanics

Electric water heaters are one of the most commonly found types of water heaters in homes today. 

Electric hot water heaters use a network of sealed heating elements enclosed coils or immersed heating rods to convert electricity into thermal energy and then transfer it to the incoming cold water.

This process works by causing an electric current to flow through these sealed elements, which creates resistance and generates heat that is quickly transferred to the surrounding tank of cold water and raises its temperature accordingly.

There are two main types of electric hot water heater: 

  • Traditional storage-tank models with sidewall insulation made up from several metal storage tanks.
  • More modern “tankless” variations where a single coil provides flash heating when activated by on/off switches or sensors as required.

Advantages Of Electric Water Heaters

Heat pump water heaters are a great choice for households that want to save energy and money. They have a number of advantages over traditional electric water heaters.

  • Heat pump water heaters are up to three times more efficient than electric resistance water heaters due to their use of electricity to move heat rather than generate it directly.
  • Heat pumps can save an average household up to $330 in energy costs compared to conventional water heaters.
  • Hybrid units offer customizations such as backup systems or hybrid mode technology for consistent hot water on demand even during peak usage periods.
  • Many heat pump models come with warranties ranging from 6 – 10 years, which helps protect homeowners against premature failure of their unit and its components over the lifetime of ownership

Disadvantages Of Electric Water Heaters

  • Initial installation costs can be high–up to $2000 or more if special wiring needs to be done–whereas traditional electric tanks can be installed for much less cost up front.
  • In colder climates, air – source units may not perform as well due to the ambient air temperatures. In these cases it’s important to choose a model specifically designed for cold climates or opt instead for a ground source or split system water heater installation.
  • Heat pumps take longer than traditional electric tank models to achieve full heating potential so they aren’t ideal if you have very high hot water demands within your household.

Energy Efficiency Ratings And Savings Of Electric Water Heaters

Electric water heaters are rated according to their level of efficiency or energy-saving ability

These ratings can help consumers find the most efficient models that will help them save money in the long run on utility bills.

Their efficiency is determined by measuring how much electricity it takes for a water heat pump to generate a set amount of heat, relative to the amount of electrical power supplied to the unit itself.

This key measure is known as its coefficient of performance (COP). The higher the COP rate, the more efficient and cost effective operation will be over time. 

For example, an electric water heater with a 3 COP rating meaning it requires 3 units of electricity just to produce 1 unit of heat can result in monthly savings compared to those with lower ratings such as 2.5 COPs and below.

Moreover, purchasing a model rated at 7+ domestic hot water systems (DHW)/30ºC – meaning it produces 7 kilowatts per hour when setting temperature is 30 degrees Celsius will be 14% less energy than standard DHW system models despite initial higher costs.

Comparing Functionality And Operation: Heat Pump Vs Electric Water Heaters

Let’s examine the key differences between these two types of water heaters, emphasizing their advantages and disadvantages.

Heat Pump Water HeatersElectric Water Heaters
Operate by using electricity to move heat from one place to another, making them more energy-efficient.Generate heat directly using electricity, which may consume more energy.
Can be two to three times more efficient than electric water heaters, leading to significant energy cost savings.Less energy-efficient compared to heat pump water heaters, which may result in higher energy costs.
Typically, they have a slower recovery rate, so they may take longer to heat a large volume of water.Usually, they have a faster recovery rate, allowing them to heat water more quickly.
Can be affected by the ambient temperature, as their efficiency decreases in colder environments.Not influenced by the ambient temperature, maintaining consistent performance regardless of the climate.
May produce cool air as a byproduct, which can be beneficial in hot climates but may require additional heating in colder environments.Do not produce cool air as a byproduct, making them less beneficial for temperature regulation.
Generally larger and may require more installation space.Typically more compact, allowing for easier installation in tight spaces.

Impact On Water Temperature: Heat Pump Vs Electric Water Heater

Impact of both the systems on water temperature determines the efficiency of each system,

Impact Of Heat Pump

The temperature of the water heated by a heat pump is affected by a few factors, such as interior and exterior air temperatures. 

As energy efficient alternatives to electric resistance or gas-powered water heaters, heat pumps extract thermal energy from ambient air and outdoor spaces.

Impact Of Electric Water Heater

Electric water heater process entrails compressing the warm indoor air into heats it up more until it’s hot enough to serve your hot water needs. 

While this makes them a highly efficient way of heating your home’s water supply, their use of natural rather than electrical heating may result in fluctuations in water temperature throughout the day.

On the other hand, electric resistance water heaters are powered entirely by electricity.

Long-term Cost Of Installation And Operation: Heat Pump Vs Electric Water Heater

Comparing the long-term cost of installation and operation is an important factor when deciding between a heat pump or electric water heater.

Initial Installation Costs: Heat Pump Vs Electric Water Heater

Heat pump water heaters have higher initial installation costs compared to traditional electric water heaters. 

The following table highlights the key differences in installation costs between heat pump water heaters and electric water heaters.

Type of Water HeaterUnit CostInstallation CostTotal Initial Cost
Electric Water Heater (50-gallon)$400$300-$700$700-$1,100
Heat Pump Water Heater (50-gallon)$1,100$400-$1,400$1,500-$2,500
Geothermal Heat Pump Water Heater$13,000-$36,000Varies depending on location and requirements$13,000-$36,000+

Cost Comparison: Heat Pumps Vs. Electric Water Heaters

The following table provides a cost comparison between heat pump water heaters and electric water heaters, keeping in mind factors such as initial costs, operating costs, and energy efficiency.

Heat Pump Water HeatersElectric Water Heaters
Initial CostsHigher upfront costsLower upfront costs
Operating CostsLower long-term costsHigher long-term costs
Energy EfficiencyMore energy-efficient, resulting in reduced energy consumptionLess energy-efficient, resulting in increased energy consumption
Annual SavingsA household of four can save around $350 per year compared to an electric water heaterNo significant annual savings compared to heat pump water heaters
Maintenance costOn average, homeowners see up to $800 in energy savings per year for a heat pump compared to an electric model with standard efficiency.In terms of maintenance costs, the two systems are fairly comparable and depend largely on whether you own it or rent it long-term.

How Climate Affects The Efficiency Of Heat Pumps And Electric Water Heaters?

The efficiency of heat pumps and electric water heaters can be impacted significantly by the climate. 

In general, higher ambient temperatures will increase the efficiency of both types of water heater and reduce standby losses, making them more efficient in warmer climates.

On the other hand, colder climates are less conducive to heat pumps as their efficiency tends to decrease when outdoor air temperature is lower than 40ºF or 5ºC. 

Similarly, electric water heater performance may decline under cold weather conditions due to decreased thermal energy transfer caused by more frequent on/off cycles.

Therefore, it is important for homeowners in areas with milder climates to take advantage of higher ambient temperatures while those in cooler locations should pay attention to their choice of a heating system that best suits their needs and budget.

How does Water Usage need to Affect The Choice Between Heat Pumps And Electric Water Heaters?

Heat pumps and electric water heaters are two different types of hot water heater options, with each having its own benefits and drawbacks. 

When selecting a type of water heater for your household, one key factor to consider is the amount of hot water you need on a daily basis.

Heat Pumps

  • Heat pumps are a great option for households with higher demand levels of hot water use. 
  • Heat pump water heaters can provide the same amount of hot water that electric systems do, using significantly less energy. 

Electric Water Heater

Conventional electric resistance models when higher than normal levels of hot water is used in short periods and on a regular basis, such as for extended showers or multiple loads of laundry in one day it can reduce the efficiency of a heat pump by requiring more auxiliary electric resistance.

Comparing The Environmental Impact Of Heat Pumps And Electric Water Heaters

Heat pump water heaters can have a significantly lower environmental impact than electric water heaters when it comes to energy and electricity usage. 

These systems utilize an existing source of thermal energy from air or ground sources, using up to 70% less electricity, which translates to fewer carbon emissions. 

The US Department of Energy has reported that the rated efficiency of a typical split-system air-source heat pump is around 300%, compared with just a 98% rate for electric resistance heating units. 

That means more hot water delivered faster for your household while cutting back on overall greenhouse gas emission levels.

In addition, because they use up to 3 times less electricity than traditional electric models, these devices can help you save money on utility bills in the long term as well. 

Heat pumps are even suitable for colder climates by providing ambient space conditioning during winter months where conventional furnaces would be used leading to increased comfort at home without needing additional fuel consumption.

Common Repairs And Replacements

The following are common repairs and replacements needed for a heat pump water heating system:

  • Cleaning out air filters regularly – to ensure no blockages which improve the efficiency of heat pumps.
  • Checking thermostat settings periodically – to make sure they are accurate and set to the desired temperature since inaccurate readings can cause energy inefficiencies.
  • Replacing fan motors/bearings – these may need replaced due to wear or if they become too noisy from high speeds.
  • Regularly removing condensate drain & line clogs – this could become blocked due to buildup within the line or clogs caused by debris from outside sources such as leaves, animals, etc..
  • Refrigerant Leak repair/replacement – refrigerant lines should be checked occasionally for signs of leaks that may need patched up before any major repairs arise from them having been neglected for too long .
  • Compressor Replacement – depending on how often it’s used, your compressor may need replaced after numerous years of use as this is what pulls cold air into the unit for efficient cooling cycles while still being cost-effective in energy saving features too .

Tips For Selecting The Best Water Heater For Your Household

When it comes to choosing the right water heater for your household, there are several factors you should consider. 

Energy efficiency ratings, installation cost, energy savings over time and maintenance costs are some of the important points you should take into account.

Heat pumps (sometimes referred to as hybrid water heaters) differ from conventional electric or gas-powered water heaters in that they employ a mechanical process called ‘heat exchange’ which captures ambient air outside the unit and transfers it inside via compressors and fans.

Heat pumps also have higher initial installation costs but provide greater long-term savings when compared against electric options. So if you intend on living in one place for a while they could be the right choice for you.

You will also need to ensure that the space around your prospective new heat pump is well ventilated as this ensures its condenser coils remain cool otherwise the system can become too inefficient and break down more often than agreed by warranty terms.

Rebates And Incentives To Be Considered For Choosing Efficient Models

When considering the purchase of a heat pump water heater, federal tax incentives and state-sponsored sales rebates can help make them more affordable. \

Inflation Reduction Act

The Inflation Reduction Act offers tax credits and rebates for energy efficient models such as those supplemented with solar energy, or heat pumps. According to the Department of Energy, Energy Star models have the potential to save consumers up to $300 a year in energy costs.

Federal Tax Incentives

Through the Inflation Reduction Act (IRA), consumers can receive a tax credit when purchasing an Energy Star certified heat pump water heater for their home. The maximum eligible amount for 2020 is $300 with no dollar limit for retrofit applications.

State-sponsored Sales Rebates

  • Many states provide additional rebate programs designed to encourage citizens to purchase energy efficient products like heat pump water heaters. 
  • These range from utility rebates available in most states that cover part of the upfront cost of installation to instant cash rebates that reimburse customers up to half of the cost of their contractor’s installation services on qualifying products purchased in certain states.

Factors To Consider When Choosing Between Heat Pumps And Electric Water Heaters

There are many factors to consider when choosing the right water heater for a household. These include electricity and maintenance costs, energy efficiency ratings, space requirements, installation costs and climate considerations. 

Energy Efficiency Ratings

Heat pumps tend to have better energy efficiency ratings than electric water heaters in most climates as more than 80% of its running cost comes from incoming ambient air which is normally cooler compared to the desired hot water temperature required by consumers. 

Electric Water Heaters on the other hand typically feature an “energy factor” rating that measures how efficiently it converts electrical energy into hot water while operating at full capacity with tanks ranging from 20-80 gallons which means a higher yearly operation cost due to electricity required for heating up large volumes.

Cost Of Installation And Operation

Heat Pumps tend to be quite costly upfront even if rebates in certain areas may bring down prices considerably thus making the payback period much shorter.

Electric water heaters where labor warranties are far greatly lower today whilst utilities offered incentives aimed at encouraging widespread adoption dramatically cutback operational costs associated with such appliances over their HPWH counterparts helping drive down both acquisition running expenditures overall potentially.

Advanced Features And Customizations Of Heat Pumps

Heat pump water heaters come with a wide range of features and customizations to meet the needs of any household.

Programmable settings 

  • Homeowners can set their HPWHs to run on certain times, days, or temperatures for greater control over their energy usage. 
  • Many models are Wi-Fi compatible, allowing owners to monitor and adjust settings from anywhere in the world with an Internet connection. 
  • This feature not only provides convenience but could also result in significant utility savings if used properly and consistently.

Tank size options

Heat pump water heaters typically come in 50-gallon tanks as well as 28-, 33-, and 40-gallon tank sizes that provide ample hot water on demand without wasting excess energy when it is not needed. 

Additionally, some models offer split systems that divide the tank’s capacity into smaller units with separate thermostats for maximum flexibility in managing your hot water supply throughout the house or business premises.

Noise reduction technology

Newer HPWHs offer sound insulation around the condenser coil to reduce operational noise levels significantly, giving homeowners peace of mind knowing that they don’t have to choose between sacrificing efficiency for quietness anymore.

Compatibility with renewable energy sources

Some HPWHs can be adjusted for use with solar photovoltaic panels as part of a green energy system setup which works effectively at night when solar power isn’t available and during cool periods when traditional air source heat pumps.


What is the difference between a heat pump and an electric water heater?

The main difference between a heat pump and an electric water heater is how they generate hot water. 

A heat pump uses air-source technology to pull warm air from outside, compress it, then transfer that energy into heated water for use throughout the home. An electric water heater relies on electrical elements to directly generate the warmth necessary for providing hot water.

What are the advantages of using a heat pump over an electric one?

Using a heat pump offers several benefits in comparison to traditional electric models such as higher efficiency ratings with up to 400% more energy saving than standard systems, lower running costs due to electricity rates being 80%-90% cheaper than non-heat pumps & greater sustainability.

Who should install my new heating system?

It is highly recommended that any new or replacement heating system you’ve opted for be installed by qualified professionals who have experience handling similar projects.

This should include someone who is licensed & insured completing safety checks before turning

Are there any maintenance requirements associated with these types of heating systems? 

Both types require regular maintenance performed annually (or even more frequently depending upon usage) which includes checking all components-related functions like filters, vents/drains/lines amongst others.


Heat pump water heaters are an efficient choice when it comes to reducing long-term costs related to electricity usage saving consumers on average 10 – 50% in heating expenses compared to traditional constantly running tanked hot water tanks or traditional electric hot water units.

Heat Pump