Electric Heat Pump Water Heaters (Hybrids): Advantages and Disadvantages

Looking for an energy-efficient and cost-effective solution for heating water?

Consider electric heat pump water heaters (hybrids)!

These innovative systems extract heat from the air to provide significant savings on energy bills and reduce your carbon footprint. Discover how these smart and sustainable water heaters can help you save money and protect the environment.

Explore the main features of the hybrids, benefits, most popular manufacturers, and check out the review of the best models.

(photo: amazon.com)

Things to Look for When Buying an Electric Heat Pump Water Heater

  1. How does the heat pump work
  2. Main components
  3. Types
  4. Installing tips
  5. Advantages
  6. Buying tips
  7. Comparing hybrids
  8. Costs and how much can heat pumps save
  9. FAQ

How Does the Heat Pump Water Heater Work

Electric heat pump water heaters (HPWH) are designed to extract heat from the surrounding air and transfer it to the water, rather than heating the water directly. They operate in a similar way to refrigerators or air conditioners, but in reverse.

Using a built-in fan, refrigerant, condenser, evaporator coil, and compressor, HPWHs use the principle of refrigeration to draw heat from the air and increase its temperature before delivering it to where it is needed.

As the refrigerant vaporizes, it goes to the compressor, where its temperature increases even further. The hot vapor then enters the condenser coil, where it transfers its energy to the surrounding water in the heat exchanger and storage tank.

Not only do HPWHs provide hot water, but they also cool and dehumidify the surrounding air. This provides an additional benefit to homeowners, as the cooled air can be used to cool houses and reduce energy consumption.

Main Components

  1. Fan
  2. Compressor
  3. Evaporator
  4. Condenser
  5. Refrigerant
  6. Insulation
  7. TPR valve
  8. Cold water inlet
  9. Hot water outlet
  10. Upper and lower thermostat
  11. Drain
  12. Anode rod


Several types of electric heat pump water heaters are available for purchase:

The integral electric heat pump water heater is a single package that includes the pump connected to the storage tank and factory-installed resistance heating elements for backup heating. Installation is similar to that of a standard storage tank, except for the condensate drainage requirements.

These heaters are also referred to as hybrid water heaters because they can switch to standard heating elements during high demand. The unit automatically switches to the “hybrid” mode, which is available on the control panel.

An add-on water heater heat pump, or retrofit unit, is installed alongside an existing heater either on top of the tank or wall-mounted. It replaces the tank’s lower heating element and becomes the primary heat source. To circulate the water, a small pump must be installed between the tank and the pump.

Geothermal heat pump water heaters are also available and use energy from the ground to provide heating during the winter. By adding a desuperheater, a small heat exchanger, the system can also heat water.

Installing Tips

Heat pumps do not directly generate energy and tend to cool the space they are in while operating. For this reason, the best places to install heat pumps are isolated locations such as garages, attics, utility rooms, basements, and rooms with a year-round average temperature between 40 F and 90 F, but with sufficient air supply.

In colder climates, heat pumps are installed indoors and provide both heating for water and cooling and dehumidification for the room in which they are located. In colder areas, ice buildup on the condensing coil can cause airflow restrictions and damage to internal components. It is recommended to purchase a hybrid with the “Defrost Mode” to avoid such issues.

Consider installing a heat pump water heater if your home has a high demand for hot water, high electricity and gas rates, or gas is unavailable.


When it comes to efficiency and cost savings, heat pumps are a better option for heating pools than gas water heaters. They are easy to install, reliable, and efficient.

As mentioned previously, HPWHs offer an energy-saving alternative to electric heaters because less energy is required to move the heat than to create it.

Only electric heat pump water heaters qualify for the tax credit. To be eligible, the pump must have an energy factor of at least 2.0 and a minimum first-hour rating of 50 GPH. Look for the Energy Star label and save up to 30% of the cost, or up to $1,500 with installation and labor costs included.


  • Higher initial cost.
  • More prone to failure than the traditional electric type.
  • While they heat the water, they also cool the room, which is not good in cold regions.

Buying Tips and What to Look For

Electric heat pump water heaters have more than twice the efficiency of the conventional electric water heaters, and they perform the best in warmer climates while it cools and dehumidifies the surrounding air.

The efficiency depends on the surrounding air, incoming water temperature, heat transfer characteristics of the unit, and losses within the system.

When buying the electric heat pump water heater, use the following three parameters for comparison:

  • The heating coefficient of performance, COP, is used for the performance, and it defines the ratio of the energy of the heat pump to the electrical energy unit.
  • Energy Factor or EF is the ratio of energy output to energy input. An average value for these pumps is around 3 (for reference; maximum EF for the electric heater is close to 1).
  • First Hour Rating (FHR) – A higher FHR indicates a better performance in delivering hot water during peak usage periods.

Comparing Heat Pumps

Popular Models

  • American
  • AO Smith Voltex
  • Rheem
  • Aerotherm from Bradford White
  • Reliance

Our recommendation is to check out the Rheem manufacturer as it produces units with ultra-efficient heat exchangers made of Titanium. A specially designed heat exchanger helps in the reduction of deposit build-up also.

The GeoSpring from GE as the Energy Star unit is also a good pick, featuring multiple settings including high demand and hybrid mode, electronic back-lit LCD display, flexible and easy-to-use electronic control panel.

Here is the comparison chart of the popular models:

Model/FeaturesSize (gal.)Energy factorFirst Hour Rating (gal.)Warranty
AO Smith Voltex50

Other popular manufacturers/brands are AirGenerate, Stiebel Eltron Accelera 300, E Tech by AO Smith, North Road Technologies, Sanyo, Hitachi, Toshiba…

Costs and How Much Can Heat Pumps Save

The upfront costs of electric heat pump water heaters can vary depending on the brand, model, and location. However, on average, a hybrid can cost anywhere from $1,200 to $3,500 (2023).

It’s important to note that while the upfront costs of electric heat pump water heaters may be higher than a traditional water heater, the energy savings over time can make up for the difference.

The installation costs of the hybrids vary depending on several factors, including the location, complexity of the installation, and whether any additional modifications or upgrades are required to the existing plumbing and electrical systems. However, the average installation cost is around $1,000 to $1,500, which is higher than the installation cost for traditional tank-type water heaters.

The American water heater manufacturer claims that their heat pumps can provide annual savings of around $428, with cost savings up to 68%, and a payback period of 2-3 years.

The AO Smith water heater manufacturer states that their Voltex hybrid can save you about $305 annually, reduce water heating costs up to 73%, with a payback period of 2-3 years.

Apart from the above two brands, the estimated yearly energy costs of Rheem heat pumps is around $161 per year.


Although heat pump water heaters have a higher initial cost, their energy efficiency can result in long-term savings that offset the initial investment. This makes them a smart investment for those looking to reduce their heating costs and have a lower environmental impact.

Additionally, electric heat pump water heaters have a longer lifespan compared to conventional tank-type water heaters, making them a more durable and sustainable option in the long run.

When purchasing a hybrid, it is important to consider the COP, EF, and FHR ratings, as well as the brand and model.


Are Heat Pump Water Heaters Noisy?

Heat pump water heaters can make some noise during operation, but the level of noise is generally low and should not be a cause for concern. The noise is typically produced by the compressor and circulation pumps, which can produce a low humming or whirring sound as they operate.

The noise level of a heat pump water heater can vary depending on the specific make and model, as well as other factors such as installation location and operating conditions. However, in general, the noise level of a typical hybrid is relatively low, typically in the range of 50 to 60 decibels (dBA) during normal operation. This is similar in loudness to a quiet conversation or background noise in a quiet office. Some models may operate at even lower noise levels, with some of the quietest models operating at around 45 dBA or less.

Do Heat Pump Water Heaters Need to Be Vented?

Heat pump water heaters do not require venting like gas or oil-fired heaters, as they do not produce any combustion gases. They use electricity to extract heat from the air and transfer it to the water, and should be installed in a well-ventilated area to allow for proper air flow. Some models may require a condensate drain.

How Long Can Electric Heat Pump Water Heaters Last?

Heat pump water heaters have a relatively long lifespan compared to traditional electric or gas water heaters, which typically last between 8 and 12 years.

The lifespan of a hybrid water heater can vary widely depending on usage and maintenance, but with proper care and maintenance, you can expect your unit to last between 10 and 15 years.

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