Inside Home Systems: Cut Carbon and Costs With a Heat Pump Water Heater

Boiler system and laundry in a basement interior

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More home buyers than ever are choosing energy-efficient heat pump water heaters over fossil-fueled water heaters. In 2022, American homeowners installed over 4 million HPWHs, and sales of HPWHs increased by 26%. Sales of gas water heaters decreased by 17% for the same period. When homes switch from a standard electric or gas model to a HPWH, they can save as much as one ton of carbon emissions each year.

Not only do HPWHs perform up to three times more efficiently than conventional systems, they also last longer and cost less to operate. With the current rebates, tax incentives and low-interest financing options available, now is the prime time for real estate professionals to get up to speed on water heater efficiency to better serve clients.

What should home buyers know before making the switch?

How Heat Pump Water Heaters Work

The HPWH is a highly efficient way to heat water as it transfers heat rather than creating it. The unit is around three times more energy efficient than standard electric or gas models.

HPWHs use electricity to extract heat from the surrounding air to warm water in a storage tank. A fan pulls in the surrounding air and blows it across evaporator coils filled with refrigerant. The warmed refrigerant is pumped through a compressor to increase pressure and temperature before traveling through condenser coils to transfer the built-up heat to the water. After cooling, the refrigerant returns to the evaporator coils and repeats the process.

Benefits of Heat Pump Water Heaters for Homeowners

HPWHs are a cleaner, safer, more efficient and affordable option to heat water. Because the process of transferring heat also draws moisture from the air, HPWHs offer additional dehumidification benefits if installed in a humid environment like a basement.

  • Cleaner & safer: HPWHs eliminate the risk of occupant exposure to carbon monoxide and other indoor air pollutants produced by combustion and also produce fewer greenhouse gas emissions.
  • Efficient: HPWHs are two to three times more efficient than gas or electric options. Effciency means less running time thanks to faster heating. As a result, HPWHs can cut your water heating costs by as much as 50%, depending on how much hot water you use and the type of heater being replaced.
  • Affordable: Nationally, heating water is usually the second-largest household energy expense after space heating and cooling costs and can account for as much as 20% of a home’s energy consumption. The average household spends approximately $400–$600 each year on water heating. Switching from a standard electric to a HPWH can cut that in half.

Some states offer rebates or other incentives to encourage your clients to upgrade to a more efficient option. In New York, for example, homeowners can save more than $3,000 between federal tax credits and utility rebates with additional rebates coming later this year when Inflation Reduction Act Home Energy Rebates become available.

To learn more about tax credits, rebates and incentives in your market, visit your state or local government’s energy authority.

Installation and Maintenance Considerations

HPWHs are relatively simple to install without major disruptions to your home life. Water heaters are typically located in the basement or garage of a home, and the space must meet certain criteria:

  • Maintains a temperature between 40°F and 90°F
  • At least 500 cubic feet of air space around the water heater or a ducted air source
  • Includes access to pipe condensate to a drain system
  • Access to a 240-volt, 30-amp electrical circuit

For a typical single-family home, the tank will range in size from 50 to 80 gallons, and systems often include a backup heater. While you can find HPWHs sold at most large retailers, be sure to encourage clients to choose a professional installer who can recommend the best location for installation and size based on energy use needs for their homes. Professional installers will also provide any necessary plumbing or electrical needs for proper installation.

Like conventional water heaters, HPWHs require routine maintenance. Performing this maintenance or getting your HPWH serviced regularly can extend the water heater’s life and minimize loss of efficiency. Routine maintenance can include visual inspection for damage, draining once a year to avoid the buildup of sediment or checking the pressure relief valve and anode rod for functionality throughout the year. Alongside this routine maintenance, homeowners should be aware of a few HPWH-specific maintenance checks:

  • Wash the filter: Homeowners should routinely check the air filters. Typically located at the top of the unit, air filters should be checked every few months or when a unit alerts them to the need for cleaning. Filters can be washed using mild detergent or soap. Make sure the filter is dry before placing it back in the water heater.
  • Clean the condensate lines: It is important to clean the condensate drain annually to prevent any backup. To clean condensate drain lines, pour a cup of bleach into the access opening to ensure that no algae, mold, or mildew will form in the pipe throughout the year.
  • Check the operations manual: Before performing any routine or HPWH-specific maintenance, make sure to consult the manufacturer’s operations manual for specific guidance and step-by-step instructions for your particular HPWH model.

Whether your clients are buying or selling, pay attention to the water heating system and consider whether it might be time for a replacement. If the water heater is more than 10 years old, has visible corrosion, or is leaking, it might be time for an upgrade. If a HPWH isn’t an option for the space, there are other energy-efficient options to consider, including electric storage water heaters, electric tankless water heaters, or solar water heaters.

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