Heat Pump Water Heater Buyer's Guide

Heat Pump Water Heater (HPWH) Buying Guide for Homeowners 

Many homeowners can cut their energy use (and expense) by making the switch to an ENERGY STAR^® certified HPWH when a standard water heater reaches the end of its life. This guide is designed to help you choose which heat pump water heater is the right option for you. But first, why switch?

• For the average household, your water heater is often the second-largest energy consumer behind your heating and cooling system¹
• Heat Pump Water Heaters (HPWH) are up to three times as efficient as standard gas and electric water heaters²
• A household of four can save about $550 per year on its electric bills compared to a standard electric water heater and more than $5,610 over the HPWH’s lifetime³
• The energy savings will pay back the difference in price versus a standard electric water heater in about three years for a household of four³

_{1. https://www.energy.gov/energysaver/water-heating}

_{2. https://www.energy.gov/energysaver/heat-pump-water-heaters} 

_{3. https://www.EnergyStar.gov/products/heat_pump_water_heaters/benefits-savings}

What Is a Heat Pump Water Heater?

Instead of directly heating water in the tank with a gas burner or electric heating element, a HPWH uses electricity to move existing heat from the surrounding air into the water storage tank. It’s similar to how a home heat pump system heats and cools your home, or how a refrigerator keeps your food cold. Here are more ways HPWHs are different from standard storage tank water heaters: 

• HPWHs are much more efficient because it takes less energy to move heat than to create it
• Heat pump water heaters use electricity rather than natural gas, heating oil, or propane to heat water
• Your non-electric energy use will go down if you switch to an HPWH from natural gas, propane, or heating oil, but your electric use may go up slightly. (It will still use less electricity to heat water than a standard electric water heater.) 
• HPWHs remove humidity from the air around them. As with heat pumps and air conditioners, the humidity condenses into liquid water (condensate)
  

Choosing the Right Size Heat Pump Water Heater for Your Family  

Choosing the right tank size is important because heat pump models take a little longer to reheat than standard tank water heaters. Many experts suggest "upsizing," or getting a tank that is slightly larger than the one you have now to make sure there is always enough hot water, even during peak demand. 

General Size Guide:

• 1–2 people: 50–65-gallon water heater  
• 3–4 people: 65-gallon water heater 
• 5+ people: 80-gallon water heater 

Where to Install a Heat Pump Water Heater

HPWHs have different space needs than standard water heaters because they work differently. When choosing where to install a HPWH in your home, you have to consider physical space, ventilation and airflow, and drainage.  
 
Most often, HPWHs can be installed where your old water heater was located. They’re often installed in a basement, because of the constant temperatures, adequate space, and access to drains for condensate. You can also install one in a garage (as long as it remains above freezing year-round), in a laundry or utility room, or in a closet with a ventilated door, as long as a drain is available.

Physical Space Needs

In addition to selecting the right water heater size, homeowners must also consider the physical space needed for a heat pump water heater. Compared to standard water heaters, heat pump water heaters are often taller, bulkier, and need more space for service access.  

Ventilation and Airflow Needs for Heat Pump Water Heaters

Unlike natural gas, propane, or heating oil water heaters, HPWHs don’t need to exhaust combustion gases outside. However, they do need to be in a room at least 700 cubic feet in total volume, where the temperature stays above 40°F year-round.

If installing a HPWH in a space smaller than 700–1,000 cubic feet, the unit will need to be ducted, or extra ventilation will need to be added to the room. This helps prevent overcooling the room where the unit is installed. Always follow the manufacturer’s installation requirements for airflow and clearances.

Here’s how to measure the volume of a room in cubic feet: 
 
1. Measure the floor (length and width). 
Use a tape measure to find the distance between the two main walls on the floor. (If the room isn’t a rectangle or square, use the measurement from the shorter side to come up with a conservative number.) 
 
2. Measure the ceiling (height). 
Place your tape measure against a corner and measure the distance from the floor to the ceiling. 
 
3. Multiply the three numbers. 
To get the cubic feet (volume), multiply those three measurements together using this formula: 
 
Length × Width × Height = Total Cubic Feet 
 
Example: If your room is 10 feet long, 10 feet wide, and 8 feet high: 
 
10-foot length x 10-foot width = 100 square feet 
100 square feet x 8-foot height = 800 cubic feet 
 
Condensate Drainage Options for Heat Pump Water Heaters 
Condensate (water) must be safely drained away from the unit. Common options include: 

• Gravity drain to a floor drain, utility sink, or standpipe near the unit
• A condensate pump that sends water to a drain elsewhere
• Exterior discharge (less common in climates prone to freezing)

Three Ways to Boost the Supply of Hot Water with a HPWH

Does your family use more hot water than average, or use a lot at the same time? Most heat pump water heaters for home installation are "all-in-one" or hybrid systems. They come with a built-in electric heating element as a backup to the heat pump system. Even during times of peak demand, such as when someone is showering while the washing machine is running, there should be enough hot water. 
 
Here are three options for boosting the amount of hot water available during intense demand. The best choice for you depends on the number of people in your home, the size of your home, and how your family uses hot water. 

1. Upsize when switching to a HPWH. A larger water heater tank stores more hot water and can support higher household demand
2. Select a system with strong first‑hour ratings. Heat pump water heaters with a high First Hour Rating (FHR) can deliver more usable hot water during peak periods without increasing tank size
3. Use a thermostatic mixing valve. This type of valve lets you store water in the tank at a very high temperature (like 140°F). The valve then mixes that super-hot water with cold water before it reaches your faucets. This brings it down to a safe temperature (around 120°F) while giving you more hot water to use for long showers or laundry

Is a Heat Pump Water Heater Right for Your Home?

For most homes, a heat pump water heater is a high-tech way to save energy for years to come. By picking the right size and making sure the unit has enough airflow and proper drainage, you can enjoy reliable hot water and a lower energy bill. 
 
If your standard tank water heater is near the end of its useful life, it may be wise to consider replacing it with a HPWH. For most homes — especially those with basements — heat pump water heaters are a highly efficient and future-ready water heating option.  

^{ENERGY STAR and the ENERGY STAR mark are registered trademarks owned by the U.S. Environmental Protection Agency.} 

^{Disclaimer: This guide is intended for consumer education and planning purposes. Always consult manufacturer installation instructions and local building codes when selecting and installing a heat pump water heater.}  

^{© 2026, AM Conservation Inc., All Rights Reserved.}