Image: Department of Energy

In the typical home, the water heater is a significant source of energy consumption, but most consumers don't think much about it.

Tucked away in a basement or utility room, it provides hot water every time you turn on the tap, but at a pretty hefty cost. According to a Department of Energy (DOE) calculator, a base model electric water heater uses about $325 of electricity each year.

But there have been changes to the water heater over the years, improving their efficiency. And DOE conservation experts have lately been singing the praises of the heat pump water heater.

These devices, which employ the technology used by HVAC heat pumps, can be made even more efficient by using ducting for air intake and exhaust.


“Heat pump water heaters can use up to 63% less energy than traditional electric water heaters,” said the study’s lead researcher, Sarah Widder, of DOE’s Pacific Northwest National Laboratory. “When water heating makes up about 18% of U.S. residential energy use, heat pump water heaters offer a real opportunity for energy savings.”

But energy experts came to this conclusion only recently. Previously they assumed savings would be offset by an increased energy use in heating systems.

Since heat pump water heaters work by transferring heat from the air into water, it was believed that would make the indoor temperature cooler. Not bad in summer but in winter but could cause the furnace to work overtime, increasing heating bills.

Ducting is key

But DOE's field tests showed that, depending on how heat pump water heaters are connected to exterior ducting, they can reduce a home’s overall power use. And while they may affect the operation of a home's heating and cooling systems, the effect isn't nearly as much as previously assumed.

Compared with the unducted water heater, the DOE researchers found fully ducting a heat pump water heater reduced a home’s total annual energy use by 4.2%. This translates into a 10-year cost savings of $1,982 for a typical 1,500-square-foot home.

But ducting has to be done a certain way. For example, the researchers were surprised to find exhaust-only ducting actually increased a home’s overall energy use by 2.9%. That adds up to an estimated $1,305 increase in total home energy costs over 10 years.



Heat pump water heaters are sometimes called “hybrid” water heaters because, during periods of high hot water demand, they switch to standard electric resistance heat automatically. These devices also come with control panels that you can use to select different operating modes.

Because they are more efficient than the typical electric water heater found in 41% of American homes, heat pump water heaters can be much less expensive to operate.

That comes as good news since heat pump water heaters are becoming more popular, increasingly being installed in place of conventional electric heaters.

DOE says heat pump water heaters make up about 1% of new water heater sales nationwide. The total number of units sold increased from 34,000 in 2012 to 43,000 in 2013, according to ENERGY STAR.

Like many things that operate more efficiently, saving you money, a heat pump water heater costs quite a bit more than a traditional electric water heater. At Lowes, a 50 gallon heat pump water heater goes for around $1,100 while its electric counterpart can be purchased for less than $300.

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