Heat Pump Water Heaters Can Save Over $500/Year On Utility Bills

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All this year, we’ll be exploring the many reasons to love heat pump water heaters (HPWHs). Perhaps the top reason is that they save so much money on utility bills. In fact, besides heat pumps for space heating, HPWHs are the appliance with the most potential savings across all household appliances.

Check out our factsheet that compares energy savings with switching to a HPWH versus other appliances.

Factsheet

How HPWHs Save Money Over Other Types Of Water Heaters

Because heat pump water heaters move heat rather than create it, they use much less energy than other forms of heating, such as electric resistance or burning fossil fuels.

Savings Over Electric Resistance Water Heaters

Nearly half of United States households have electric resistance water heaters, which are also the top selling type of water heater over the past several years. HPWHs, like electric resistance water heaters, use electricity as their fuel, but they consume a good deal less of it. Most models of HPWHs in the U.S. market use around four times less energy than electric resistance water heaters. This efficiency means that HPWHs will save households a lot of money no matter where you are in the country.

ENERGY STAR created a helpful chart that we recently updated to the current average cost of electricity (17 cents per kilowatt hour) — see the chart below.

As you can see, HPWHs have a phenomenal return on investment. If you have four people in your household, a heat pump water heater will pay for itself in just over two years when replacing an electric resistance water heater.

Savings Over Gas Water Heaters

Close to half of the rest of U.S. households have water heaters powered by burning fossil gas. Heat pump water heaters are often more than five or six times more efficient than fossil gas water heaters, yet the cost of gas is lower per BTU than electricity. Still, our analysis shows that most of these households will typically save between $150 and $300 on their utility bills when switching from a gas water heater to a HPWH.

Areas Where HPWHs Might Not Save On Utility Bills

While most of the country will save lots on their utility bills by switching to a HPWH, there are places that may not. Some places in California, where the cost of electricity can be high and the cost of gas is relatively low, may not see savings right away.

Yet, even in these areas, many homes should still save money on their bills when they switch to a HPWH. In a field study done by the Advanced Water Heating Initiative and New Buildings Institute on plug-in HPWHs for example, 60% of the installed HPWHs reduced utility bills. Another study by Silicon Valley Clean Energy in California found “HPWH retrofits provide the most consistent bill savings of all modeled scenarios.”

Across the vast majority of the United States, heat pump water heaters will save significantly on utility bills no matter what type of water heater it is replacing. As energy costs continue to rise, this is great news for consumers, meaning the best water heater for the planet is also the best water heater for our pocketbook. A great reason to love the amazing heat pump water heater.

Check out our new webpage with more on the cost savings of HPWHs.