What Is a Heat Pump Water Heater? 7 quick and easy facts

When it comes to energy and cost-efficient ways to supply your home with hot water, heat pump water heaters are one of several alternatives to choose from.

Heat pump water heaters use a compressor and evaporator system to heat the water in the tank. They are highly efficient but can be costly to purchase and generally require more maintenance than their counterparts. Therefore, their usability comes down to personal preferences and circumstances.

To learn a good deal about these water heaters, how they work, and what would be the ideal choice for you, keep reading.

What Is a Heat Pump Water Heater?

In order to understand how a heat pump water heater works, you must first have an inkling of how a heat pump operates. Get info on that here: What is a Heat Pump?

While conventional water heaters function by using resistance or gas to generate heat, heat pump water heaters work by transferring heat from a liquid in a coiled pipe into the water in the tank.

They achieve this by utilizing the same technology used in refrigerators (except in reverse), which allows them to transfer heat from one area to another.

Due to the gradual nature of this process, they tend to require a longer heat-up time than other water heaters in order to reach your desired temperature. So there is a give-and-take element that a potential owner will have to consider.

Some models, called hybrids, have the ability to adapt and switch between high-efficiency and lower-efficiency modes. This switch is made depending on the specific conditions they’re working in at a given moment. Efficiency and adaptability are two of the most favorable qualities when it comes to these water heaters, which has allowed them to reach considerable mainstream success.

Read: No Hot Water In The House? Here’s Why

How Does a Heat Pump Water Heater Work?

Heat pump water heaters pull warmth from the surrounding air and transfer it into your tank. This is quite different from generating heat via resistance or flame.

These water heaters function using the same technology that you’ll find in refrigerators, just in reverse. They pull heat from the outside space, increase its temperature, and transfer it to the water in a storage tank.

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This way of functioning makes these systems ideal to use in locations where the surrounding temperature stays within a range of 40º–90ºF (4.4º–32.2ºC).

Heat pump water heaters cannot function properly when placed in a cold space because there needs to be a certain amount of heat in the air from which it draws.

Instead, try installing them in a place or location where adequate heat is fairly constant. When doing so, you won’t need to worry about how your water heater is functioning or whether it will lose efficiency and get overworked.

Side note: By pulling heat out of the ambient air, they tend to lower the temperature of the area they’re in. It can make a noticeable difference in a small room.

What is a Heat pump water heater cutaway

A Step-by-Step Explanation of How a Heat Pump Water Heater Works

To better understand the process of how this heating system can provide heat to your indoor space without generating it, here is a step-by-step explanation.

  1. Remember that heat always chases cold. A fan placed on top of your water heater heat pump will draw in the air from the room and push it past the fins of an evaporator, which is filled with a liquid medium at a very low temperature. This liquid has a very low boiling point.
  2. Because of this, heat is pulled from the passing air and is absorbed into the liquid, raising the liquid’s temperature enough to turn it into a gas. Rising temperature causes expansion, which then causes higher pressure.
  3. This warmed gas then flows into the compressor. Here, the gas is compressed, causing further heating and higher pressure.
  4. The hot gas is now pumped through a series of coils (usually copper tubing) that run the length of the tank. As this happens, a heat energy transfer occurs from the gas in the coils to the surrounding water in the tank. This causes the water to heat up, while the gas cools down. As the gas cools, it turns back into liquid. 
  5. After the gas has cooled down and turned into liquid, it gets pumped back to the evaporator, and the whole process repeats itself again, creating a cycle. This is how water heater heat pumps are able to provide heat to your water supply by simply transferring heat from one area to another.

Now that we’ve seen how a water heater heat pump works, let’s talk about some of the different ways they can be implemented.

Combination all-in-one water heater heat pump

Suppose you want a temperature control system that can function as a heater, cooler, and water heater. In that case, you may want to look into investing in a combination system that pulls heat from the outside air and transfers it indoors in the winter while pulling excess heat from the inside air in the summer.

While it’s ‘heating’ or ‘cooling’ the air in your home, it also is heating your water. These combination systems work ideally in warmer climates, as the full functionality of their system relies on pulling heat from surrounding air. 

Geothermal water heater heat pump

A geothermal heat pump accomplishes the same thing, but uses a different medium to do it. Instead of ambient air, they use the ground temperature, which remains constant throughout the year, from which to draw their heat.

These are mostly used for home heating and cooling, but can also incorporate water heating, like the combination setup mentioned above. If you’re interested in water heating this way, you might want to look into adding a desuperheater to the system.

Yes, I said desuperheater. I know, that sounds like a made-up term from a science fiction B-movie, but it’s actually a real thing.

A desuperheater is a heat exchanger that can increase water’s temperature by using superheated gases and fumes produced by the heat pump’s compressor. These exchangers come in many types and forms; therefore, you should be able to find one that is adaptable to your heating system, regardless of whether it is tankless or not. 

Desuperheaters can’t produce much heat in the colder months. For this reason, you may want to rely on some backup options for heating your water as well. But on the flip side, they are more than sufficient to use by themselves during warmer summer months, as the excess heat they can extract from the surrounding air is able to handle all of your water heating needs.

Heat Pump Water Heater Efficiency

Water heater heat pumps are renowned for their high efficiency both in terms of cost and energy. Their technology, centered around heat transfer rather than generation, demands lower energy consumption to sustain the desired temperature of your water, leading to favorable effects on your electricity bills.

heat pump water heater installed

These systems exhibit adaptability, serving various purposes simultaneously, earning them the name ‘hybrid systems’. They seamlessly transition between multiple operating modes based on your temperature preferences, adding to their versatility.

Some of these highly customizable settings include: 

  • Economy: When employing this configuration, the appliance optimizes its performance by utilizing the pump solely to generate sufficient energy for heating your water supply, without affecting the overall temperature of your space. This mode proves advantageous, especially in the warmer summer months, preventing excessive energy consumption.
  • Automatic Mode: This serves as the default setting, commonly applied year-round. Its versatility makes it well-suited for everyday usage, ensuring a substantial heat output for your space while maintaining cost-effectiveness.
  • Timer: Found in some of the latest models, this feature enables you to temporarily halt the device’s operation, preventing unnecessary heating during periods when you’re away. By avoiding unwarranted energy usage, this setting enhances the efficiency of water heater heat pumps as a heating system for your home.

How Much Does a Heat Pump Water Heater Cost?

Heat pump water heaters come with a substantial initial cost, running into thousands of dollars for both purchase and installation. Despite this, their operational costs are notably lower compared to traditional alternatives, often offsetting the overall expenses over time.

Installation expenses vary based on factors such as system size, model, geographical location, and the chosen service provider — often exceeding $4200. This can pose a significant financial commitment that might not align with every homeowner’s budget. It’s crucial to view this purchase as a long-term investment with potential benefits.

Given the low operational costs, a heat pump water heater has the potential to reimburse its upfront expenditure within 2-3 years of use. With a lifespan extending up to a decade, this system transforms into a financially sound investment over the years.

The actual savings depend on various contextual factors, necessitating thorough individualized cost analysis before deciding to integrate this relatively expensive heating system into your home. A comprehensive guide is available to assist you in ensuring the precision of your research.

Read: How Much Does It Cost To Move A Furnace And Water Heater?

Benefits of Using a Water Heater Heat Pump

These water heater heat pumps offer a plethora of advantages which have made them one of the most popular choices throughout warmer countries. Here are some of the most important pros to consider:

Read: How Much Electricity Does Water Heater Use?

High Efficiency

As I mentioned in a previous section, transferring heat requires a lot less energy consumption compared to generating it. For this reason, water heater heat pumps are an energy-efficient and sustainable choice that can help you provide adequate hot water to your home with minimal energy usage. This level of efficiency can notably lower your electricity needs, which will often allow you to save a fair amount on operational costs.

Heat pump water heaters are, in fact, the heating technology that offers the lowest operating costs in today’s market, saving the average family upwards of $3500 during its lifespan. This impressive advantage gives these systems a significant edge over other, less efficient alternatives, which has directly affected their rising popularity and demand.

Remember, cost savings are completely dependent on geographical location, electricity rates, and quality of equipment.


Heat pump water heaters function using electricity, not by burning fuel (as many other heating system alternatives do). Therefore, they are in many ways easier to operate and use for extended periods of time in your home, making them a reliable and accessible source of heat.

Eligibility for RHI Programs

Governments often provide incentive programs for the production of renewable energy. Therefore, depending on your local RHI (Renewable Heat Incentive) schemes and laws, you may be able to receive compensation for using a renewable energy source with a heat pump water heater. 

water heater with lower cover removed


When using this type of heating system, you’re not only providing warmth to your house using renewable energy, but you’re also further reducing your consumption of natural resources by decreasing your energy needs. As I mentioned in a previous section, heat pump water heaters require a substantially lower amount of energy to heat your home and water supply. 

Disadvantages to Using a Water heater Heat Pump

Along with the excellent advantages listed above, choosing this alternative comes with some drawbacks that may impact its usability for you. These disadvantages include:

High Installation Costs

Although you can significantly save when it comes to operational costs, this may be a moot point for those homeowners who can’t afford to install a heat pump water heater system in the first place. As I previously mentioned, installation costs can, in some cases, go up to several thousand dollars, meaning it may not be the most accessible choice for everyone.

It is critical that you perform a thorough analysis of your particular situation before deciding to go with a heat pump water heater. Check with your local power utility company to compare usage rates.

Doesn’t Work Efficiently in Colder Climates

Because of their technology, some heat pump water heaters can’t work efficiently in colder climates. This factor is usually the first drawback you should consider when thinking about purchasing a one for your home. Therefore, if you live in a colder area, heat pump water heaters won’t always be the best choice for you. 

However, there are hybrid options that could still make it feasible. In order to attain the extra amount of heat desired, you may consider using a backup heating system. Such a system would only be used during the coldest times of the year.

Noisy and Requires Significant Work and Maintenance

While working, heat pump water heaters may produce some rather loud noises that can turn out to be problematic, especially for light sleepers.  This is due to the compressor and fan cycling on and off.

Also, especially if this is a retrofit installation, you might need to invest a substantial amount of time and effort to situate the system in place properly. In some cases, you will also need to apply, wait for, and attain a building permit before adding the equipment to your house.

Even after the installation process is completed, the system will require frequent professional checks that should to be conducted once a year, or so. So if you’re looking for a low-maintenance option, you may be better off looking at another alternative.

Finally, because these units have so many more working parts than a conventional electric or gas water heater, it is likely that more maintenance will be required over its lifespan.

Is Buying a Heat Pump Water Heater Worth It?

Buying a water heater heat pump is worth it only if you live in a warmer climate and can afford the initial installation costs. In this case, they can be a smart, beneficial investment in the long run. Otherwise, there might be a better-suited alternative for you.

Choosing the best heating system for your home depends on your priorities and circumstances. After reading through the previous list of pros and cons, you can go ahead and compare every factor mentioned with your preset needs. This process will help you understand which of these elements is prone to affect you more, allowing you to make a well-informed decision.

Best Heat Pump Water Heaters

  • Rheem Hybrid Smart Tank Water Heater. A quiet, highly-efficient alternative that doesn’t break your bank. The Rheem water heater makes an excellent choice for any homeowner, as it comes with a built-in hybrid pump design and high wi-fi connectivity.
  • AO Smith Voltex Hybrid. Another alternative (available on Amazon.com) that boasts up to 71% lower energy usage, compared to standard water heaters.
  • Electrolux Electric Hybrid Heater. The quietest option out of all the picks. This excellent heater made out of stainless steel provides a durable, highly-efficient, and cost-friendly way to warm up your water supply. 

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Read: Rheem Water Heater Error Codes


Heat Pump Water Heaters present a compelling and efficient heating option for homeowners residing in warmer climates. While the initial installation cost is relatively high, their exceptional efficiency leads to substantial savings in operational expenses, effectively balancing the overall financial outlay.

However, it’s essential to note a significant drawback — these water pumps might struggle to function optimally in colder climates. If you find yourself in such conditions, it’s advisable to explore alternative heating solutions to effectively warm your living space.