Heat Pump Water Heaters and American Homes: A Good Fit?

Heat pump water heaters (HPWHs) are over twice as energy-efficient as conventional electric resistance water heaters, with the potential to save substantial amounts of electricity. Drawing on analysis conducted for the U.S. Department of Energy's recently-concluded rulemaking on amended standards for water heaters, this paper evaluates key issues that will determine how well, and to what extent, this technology will fit in American homes. The key issues include: 1) equipment cost of HPWHs; 2) cooling of the indoor environment by HPWHs; 3) size and air flow requirements of HPWHs; 4) performance of HPWH under different climate conditions and varying hot water use patterns; and 5) operating cost savings under different electricity prices and hot water use. The paper presents the results of a life-cycle cost analysis of the adoption of HPWHs in a representative sample of American homes, as well as national impact analysis for different market share scenarios. Assuming equipment costs that would result from high production volume, the results show that HPWHs can be cost effective in all regions for most single family homes, especially when the water heater is not installed in a conditioned space. HPWHs are not cost effective for most manufactured home and multi-family installations, due to lower average hot water use and the water heater in the majority of cases being installed in conditioned space, where cooling of the indoor environment and size and air flow requirements of HPWHs increase installation costs.