Heat Pump Water Heaters: A Better Way to Heat Water with Electricity?

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heat pump water heater compressor stiebel eltron

Last week, I was a judge in the LightHouse Awards green home competition put on by the Hilton Head Home Builders Association (HBA). Along with fellow judges Chris Laumer-Giddens, my colleague here at Energy Vanguard, and Tim Watson of Southern Fried Home, I visited two homes in the Hilton Head area. I'll say more about the contest and the homes after the winners are announced (12 November), but for now, I'd like to discuss the heat pump water heater I saw in one of the homes.

There are quite a few choices available in the water heater market these days. Most of them are cold water heaters, as the incoming water is cold and hot water doesn't need to be heated because it's already...you know...hot. (Sorry, I know almost everyone says 'hot water heater,' but it's one of those little things that drives me nuts, so I'm going to lay that burden on you now.)

Most water heaters are storage units that convert a fuel to heat and put that heat into water stored in a tank. Mostly, they get their heat either by burning natural gas or running electric current through a high resistance wire (like a toaster) and converting that electricity to Heat pump water heaters also cool and dehumidify the room they're in.heat at 100% efficiency.

Tankless water heaters come in gas or electric models (though electric tankless water heaters are almost never a good idea), and they eliminate the standby loss of having to keep a tank of water hot. They don't do anything different to get the heat, though, except greatly ramp up the speed with which the heat can be dumped into the water.

Heat pump water heaters, on the other hand, are storage units that get their heat in a different way. It works on the same principle as your refrigerator or air conditioner - the refrigeration cycle. Rather than turning a fuel into heat, it moves heat from one place to another. It takes electricity and sucks up heat from one place and then delivers that heat to another place, care of a special substance called a refrigerant. Martin Holladay wrote a great description of the refrigeration cycle earlier this year. (Skip down to the Nuts & Bolts question.)

A refrigerator takes heat from inside the box and dumps it into the kitchen. An air conditioner takes heat from the house and dumps it into the air outside. A heat pump water heater pulls heat out of the air in the room where the water heater is located and dumps that heat into the water in the tank.

A standard electric water heater takes 1 kilowatt-hour of electricity, turns 100% of it into heat, and puts over 90% of that heat into the water. Energy Factor (EF) is the measure for this efficiency rating, and is generally around 0.9 for electric water heaters. A heat pump water heater takes that same kilowatt-hour of electricity and uses it to move about 3 kilowatt-hours of heat and put most of that into the water in the tank, yielding Energy Factors of 2 or higher.

Getting back to the inspiration for this article, one of the homes we visited for the LightHouse competition has a Stiebel Eltron Accelera 300 heat pump water heater, perhaps the Rolls Royce of heat pump water heaters. The schematic below shows how it's designed. It's basically a little air conditioner blowing cool air into the room. The condensing coil, which normally has air blowing over it to get rid of the heat pulled out of a house, is instead wrapped around the tank, putting heat into the water.

heat pump water heater schematic diagram stiebel eltron

The Accelera 300 uses a different method of transferring heat to the water in the tank than the models recently introduced by GE, Rheem, and Ruud. As mentioned above, the Accelera has the condensing coil wrapped around the tank for heat transfer, whereas the other models use a pump to circulate water over the condensing coil. You can read a review of the Accelera 300 here, but be sure to check out the comments, too, where the author gives a lot more info about the product.

One ancillary benefit for warmer climates is that heat pump water heaters cool and dehumidify the room they're in. Of course, that's not a benefit if you live in Montana or Maine because the heat pump water heater will be robbing Peter to pay Paul. By pulling heat out of the room, you force your heating system to work harder, and in a cold climate, that's not such a good tradeoff.

The Accelera 300 water heater has an Energy Factor of 2.5 and appears to be a good choice in some applications. At about $3000 installed cost, however, it's not cheap. If you're paying cash, the payback on it will probably be 15 years or more, depending on your comparison scenario, hot water usage, and local rates.


Green Curmudgeon
Oct 25 2010 - 10:18am

I think that while HP water heaters are quite the darling of the green building industry these days, their value is somewhat overrated. Most of those that I have seen have manual switches that change from HP to resistance heat mode which must be done seasonally, as the HP function doesn't work well in very cold weather. While I realize that they are efficient when operating in HP mode, they can really only do that most of the year in hot climates when they are installed in unconditioned spaces. Any since, as we improve the efficiency of homes, we are moving towards avoiding unconditioned spaces, particularly for mechanical equipment, it seems like this particular piece of equipment is becoming obsolete just as it enters the market. I suppose that if you were replacing an old heater in a garage in Las Vegas it is probably a suitable solution, but there are so many other issues to address. It seems to me like these are the belle of the water heater ball, having displaced tankless heaters, having finished their 15 minutes of fame a year or so ago. The water heater decision is being driven by manufacturers who need to sell stuff, rather than solutions. The solution is how the house is designed, where the heater is located, the distance between the heater and the fixtures using the hot water, what pumps are installed, and whether or not the lines are insulated. Once you take all these into account the heater itself becomes increasingly less relevant. Unfortunately, well financed companies aren't selling house design, pipe installation diagrams, and pipe insulation, so the important stuff gets ignored in place of sexy things that people can buy and sell.

Allison Bailes
Oct 25 2010 - 11:20am

What a curmudgeonly comment, Carl! Unfortunately, a lot of what you say is true. Heat pump water heaters, as you point out, can be another example of focusing on products rather than process, and they definitely have their drawbacks. 
I believe you exaggerate the deficiencies, however. Heat pumps inside the conditioned space can work well year round, as does your fridge, which is a heat pump, too. The more air conditioning the home uses, the more efficient these units will be, though. Also, the model I discuss in this article automatically turns on the resistance heat when necessary. 
The biggest problem I see with the Accelera 300 is the cost, but for the owners of this house, expense and payback weren't a factor.

Allison Bailes
Oct 25 2010 - 11:22am

By 'the more air conditioning the home uses,' I mean the hotter the climate, not the lower the thermostat setpoints in summer.

David Butler
Oct 25 2010 - 1:36pm

Allison, you probably thought that was me posting under an alias ;-) 
I do agree with much of what the curmudgeon says. With available tax and utility incentives, a HPWH might make sense for some families in warmer climates. But like many energy efficient products, the problem boils down to quantifying benefits for a particular home and set of occupants. 
The problem with the HPWH is that the EF rating is much more sensitive to specific operating conditions than is the case with conventional water heaters. In particular, efficiency and performance are greatly affected by ambient conditions at the condenser. More importantly, because electric backup is required, the total operating cost will depend greatly on hot water demand and usage patterns. 
When GE and Rheem decided to enter the market, I spoke with technical reps at both companies as well as an engineer at one of the testing labs. Although both manufacturers avoid the inside vs. outside issue in their installation instructions, the Rheem product manager told me the cooling benefit is too small to be worth considering. He recommends their units be installed outside conditioned space, preferably in a garage or attic. The EF rating procedure assumes an average ambient temperature of 67.5F. No data is available on performance at other temperatures, thus site-specific modeling is not possible. 
More significantly, a HPWH, by design, will have at least two operating modes. The Rheem HP-50 has three modes -- Energy Saver (HP only), High Demand (HP + element combined) and Electric Heat only modes. As it turns out, the EF procedure does not specify the operating mode. The Rheem product manager expressed concern about this. In particular, he said a manufacturer could test the first-hour rating in one mode and the EF in another mode without disclosing this to the consumer.  
In short, recommending a HPWH requires a leap of faith. 
I think the more we can steer folks away from specific products and more toward process and careful analysis, the better for the environment and homeowner pocketbooks.

arthur larsen
Oct 25 2010 - 3:00pm

how long is the payback vs a conventional water heater? 
more mechanical parts means a higher and more frequent service ratio. 
a btu is a btu....however you make it. 

Allison Bailes
Oct 25 2010 - 3:10pm

Good points, David. I certainly agree that we need to emphasize process and analysis over products, and water heating is about one of the trickiest areas for that. Gas or electric? Storage or tankless? Electric resistance or heat pump? And, as Carl mentioned, the distribution system gets mighty little attention, way less than HVAC distribution gets. 
My main point here was that using electricity to move heat can be better than using it to generate heat. I agree that I was a bit too sanguine about the usefulness of heat pump water heaters and not cautious enough in my endorsement. I've added a question mark to the title of the article to help in that regard. 
Your comments seem to apply mainly to the GE and Rheem models, though, so I'd be interested in your take on the Stiebel I discussed above and the Geyser, which you can add on to an existing water heater (either gas or electric). 
Regarding the negligible cooling benefit, I was surprised that the air coming off the unit wasn't cooler. Water has a high heat capacity, so it should take a lot of Btu's to heat it up, thus making some pretty cool air. At the time we were there, though, no one was home using hot water.  
This would be a great research project, and I'd love to see the results if someone has already done it.

Allison Bailes
Oct 25 2010 - 3:26pm

Arthur, first of all, payback may be irrelevant. See my article on payback to see why.  
If payback is relevant, it's going to depend on a number of factors, some mentioned in the article and some in the comments above - climate, location of water heater, hot water usage, electric rates, and what you're comparing it to. My estimate for the Accelera 300 is at least 15 years, or about the lifetime of the unit, but it's an expensive, high end model. 
You're absolutely right about the complexity potentially reducing the value of heat pump water heaters.  
And, yes, a Btu is a Btu, no matter how you make it, but the cost of each Btu, environmentally and monetarily depends on how you make it.

David Butler
Oct 25 2010 - 3:56pm

I certainly wouldn't put a HPWH indoors in a hot climate. You'd give up too much potential from the higher ambients. In cooler climates, it might be worthwhile to rig a seasonal exhaust bypass vent. But that's more of a DIY project, not something I'd ever recommend to a client. 
I'm afraid any research involving HPWH's would be so much affected by specifics of the homeowner's water demand and usage patterns that the results would be of little use in the general case. 
Although I'm unfamiliar with the Stiebel HPWH (I certainly know the company), it's hard to imagine there'd be enough difference to justify the cost. The manufacturer claims an EF of 2.5, although I couldn't find it in the AHRI certification directory. In any event, given the ambiguities of the certification process I mentioned above, I'd be very skeptical of comparing EF's prima facie. 
BTW, does $3k for the Steibel include installation? I think the Rheem sells for about $1600 excluding installation. In any case, labor should be almost a wash compared to installing or replacing a conventional electric heater.  
As for the Geyser add-on unit, I don't see the point. According to mfr website, it sells for $2k. That's more than the all-in-one Rheem or GE models.

Les Watts
Nov 3 2010 - 8:49am

Good article Allison and some great comments that followed.  
I personally have one of the Geyser units located in a spray foamed attic. I don't have a year of usage prior to install to compare what the cost savings are, but I will tell you that I have my Marathon tank completely unplugged and the Geyser is doing it all with now resistance backup heating(a bit risky maybe). The Geyser has supplied a steady stream of hot water on its own even when our house has been full of guests! 
I agree there may be the "robbing peter to pay paul" debate, but I think that should be really looked at and considered. If your holding tank has no insulation value, then yes, the standby losses will be larger, so your HPWH will be running a lot thereby producing more AC and dehumidification while it keeps up with the heat losses. So in this situation, if it is during the winter, there could be some battles. In my situation though, the HPWH runs for 10 - 15 minutes a couple times a day and that is it. When we are showering, cleaning dishes, etc... it runs more of course, but it is not like a whole house AC unit that cycles on due to temp or humidity settings, only when the water needs to be heated. 
For the Geyser add-on unit, I think there are several good reasons for using it. First, the cold air can be ducted (as well as the input air if needed) to areas that may need the air more, but once again it is not to replace your HVAC. Second, the unit is separate and can be added on to the existing holding tank in someone's house. With water heating costs ~15% of the bills, waiting until your tank fails to get newer technology is wasting money. If you buy an add-on type, you can start saving right away. Third, if the tank fails, like the GE, Rheem, etc...then the HP component is gone too. With the Geyser it is not, and if you move, you can take your add-on unit with you and continue saving somewhere else. Finally, the versatility of an add-on unit is something that should not be overlooked. If you can't put it right next to the unit due to not enough free air space, you can install it in the crawl space or somewhere else nearby and still get great savings. The EF falls as you get heat loss from transmission the further you get away, but it should not be overlooked. 
I completely agree it is the process and not the products, but for the masses that have holding tanks that are extremely less efficient than these HPWH's, moving the ball an inch or a foot forward is a step in the right direction. Maybe I am biased on the HPWH's, but I am a fan.

Allison Bailes
Nov 4 2010 - 1:43pm

You raise some interesting points about the advantages of having an add-on unit, Jamie. Did you pay about $2k for it, as the mfr's website says?

Les Watts
Nov 7 2010 - 8:36am

I paid around $1800 installed.  
The website you posted is not the manufacturer's website, but a distributor out of Florida.  
Since I don't know how to make a direct link, I will post the website for North Road Technologies which makes the unit. 
Also, ACEEE has some good info on the HPWH, but doesn't even list the Bentley version aka Accelera 300. 
I do like the advantages of the Geyser retrofit model, and in my climate down in the Lowcountry of SC, I think it makes good cents!

William Munn
Feb 21 2014 - 5:43pm

I live in Orlando, FL and the heat pump water heater is an ideal solution for my needs. The garage is unconditioned space, and stays well above 80 F most of the year, so it will have plenty of heat to draw upon to heat the water. Just installed the GE Geospring, looking forward to seeing how much I save this summer :)