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Heat pump water heater (HPWH) systems mine the energy content of air to produce hot water very efficiently (Figure 1). Depending on cold water and ambient air temperatures and on patterns of hot water use, HPWHs do the same job as standard electric water heaters while using half the electric energy.

HPWHs use a motor to run a compressor. The compressor draws a gaseous refrigerant through an evaporator, raising the refrigerant's pressure until it liquefies in the condenser. This familiar process heats the condenser and cools the evaporator. By wringing heat from the air, HPWHs both cool and dehumidify the air that passes through them, thus helping to meet space-conditioning needs during cooling seasons. In areas like Hawaii—where natural gas is unavailable, electric energy costs are high, and the need for dehumidification is virtually constant—paybacks of less than two years are routine. Over 40 million U.S. households currently use electricity for water heating, creating a vast potential market for HPWHs.

What Are the Options?

HPWHs are available in the U.S. in a variety of capacities, from small residential to large commercial systems that can produce more than 3,000 gallons of hot water per hour and over 30 tons of air conditioning. This would be enough hot water production for a large-scale commercial laundry facility.

Integrated versus add-on systems.Those considering a residential-size HPWH can choose between integrated and add-on systems. Integrated systems incorporate both the heat pump apparatus and the hot water tank into a single unit, with the condenser typically wrapped around the tank, surrounded by insulation. Integrated systems are also called “drop-in” systems, for good reason. They are designed to require no special expertise in HVAC installation or wiring; ordinary plumbers can install them without the aid of other tradespeople. More compact than add-on systems, they tend to have the same footprint as ordinary electric hot water systems of the same water capacity. Accordingly, integrated systems tend to be easier to retrofit. This is also adequate for many light commercial applications, but not for installations where the average demand for hot water exceeds 20 to 25 gallons per hour.

In add-on systems, the heat pump apparatus stands alone (Figure 2). Heat is transferred from the condenser to the water tank via a heat exchanger and a small pump, using the tank's water as a heat exchange medium. Add-on systems are available in a variety of sizes for residential, commercial, and industrial applications.

An add-on HPWH system has the virtue of using the existing water heater that heats by electrical resistance. Thus, the capital expense is lower and, in many cases, installation can be more flexible, because there can be some distance between the HPWH apparatus and the water tank.

HPWH system efficiencies.The instantaneous energy efficiency of a heat pump water heater system depends on incoming water temperature, intake air temperature, the heat transfer characteristics of the heat pump, and various conductive and convective losses throughout the system. In most circumstances the hot water output is useful throughout the year, but the cold air output may not be. Accordingly, there is no simple index that accounts for both outputs and describes overall HPWH efficiency. Instead, the HPWH industry relies on two indexes of energy efficiency—coefficient of performance (COP), which is favored by manufacturers of larger HPWH systems, and energy factor (EF), used by manufacturers of domestic HPWH systems.

COP is a measure of the instantaneous energy output of a system in comparison with its instantaneous energy input. Standby losses and the interaction of changing water and air temperatures are not reflected in measurements of COP. Accordingly, the COP of a standard electric hot water heater is close to 1, and the COP of a typical HPWH heater may be 3 to 4.

EF is a more useful measure, because it reflects more realistic circumstances likely to occur in the field. The test to determine EF is conducted over a 24-hour period with temperatures of incoming water and input air held constant. A measured amount of water is pulled from the system every other hour for the first 12 hours, and no water is drawn for the final 12 hours. Because this test reflects standby losses, the EF of a typical electric hot water system is 0.90, and the EF of a typical HPWH heater may be 2.2. This represents an efficiency improvement of more than 200 percent, even if the cooling benefit is ignored.

Buyers of commercial systems should be aware that COPs quoted by manufacturers may reflect the combination of the production of cold air and hot water in relation to energy input. This is helpful if full use is made of the cold air, but not otherwise.

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How to Make the Best Choice

Match the technology to the application. You may be a good candidate for a HPWH if:

•Your home or business needs to replace an electric water heater.

•You're looking to add air conditioning to spaces where it's normally cost-prohibitive.

•Natural gas is not available in your area.

•You require a large, steady load of hot water throughout the day.

Because HPWHs produce cool, dry air as a by-product of heating water, the best applications are those that take advantage of both outputs simultaneously. Consequently, HPWHs are especially well-suited for commercial-sector applications where the demand for hot water is relatively constant and the need for cooling or dehumidification is continuous. Commercial laundries fit this description, as do many commercial kitchens and even fast-food restaurants, particularly in climates where space cooling is essential. The best applications for residential units are homes in hot and humid climates, because cold air is produced whenever there is a demand for water heating.

Pick the right size. Picking the right size of HPWH system requires estimating daily hot water needs in gallons—just as you would when sizing any other water-heating system. However, for HPWH systems, an allowance must be made for high-peak hot water demands. HPWH systems are quite efficient, but they are slow and steady. A key factor to consider is the rate of hot water production, which is listed in product literature as the “recovery rate” and measured in gallons per hour. Recovery rates are typically half as much as those of traditional water heaters, but the instantaneous power consumption (demand) is typically 40 to 70 percent less. Accordingly, electric demand savings with HPWH systems can be substantial, but only if the use of backup electric resistance heat is quite low.

If you'll be using HPWH systems in applications that require considerable hot water over a short amount of time, choose either a larger tank than a traditional hot water system has or a HPWH system with a higher recovery rate. Either choice will help smooth over peak hot water loads.

Perform a quick cost/benefit estimate. The cost-effectiveness of a HPWH is heavily weighted by utility rates and water use. Residential HPWH economics are typically only attractive for households that currently use electricity to heat water and that draw at least 60 gallons of hot water per day. Households usually draw 20 gallons per person per day. Residential HPWHs can only compete with natural gas water heaters if the price of gas is high and the price of electricity is low. See Table 1 and Table 2 for cost estimates of a residential-size HPWH versus an electric water heater and a gas water heater.

More-consistent water loads and a greater need for year-round cooling and dehumidification make HPWHs a more attractive option for many types of businesses. The initial cost of a commercial HPWH is much greater than that for an electric or gas-fired boiler, but the annual savings are so large that paybacks typically range between two and three years. Water inlet and setpoint temperatures, HPWH location, air-conditioning and dehumidification loads, and water consumption rates are some of the parameters a commercial designer takes into account. This makes estimating commercial HPWH economics a trickier process, so contact a vendor or system designer to see if a HPWH is appropriate for your application.

Plant integration. For buildings that use rooftop cooling towers or large refrigerators, it may be worthwhile to harvest waste heat from these units, using the HPWH system both to produce hot water and to help meet the air-conditioning load (Figure 3).

Pick a good location. All HPWH systems should be installed with careful attention to the flow of air across their evaporators. First, because airflow is a necessity (several hundred cubic feet per minute are needed even for smaller systems), do not place systems in isolated, tight areas. Second, because these systems produce dry, cool air, put them where their output air will be useful, such as damp basements or spaces that need cooling most of the year. Of course, ducts and dampers may be employed to achieve the needs of source and output air, thus allowing flexibility in choosing a location. Finally, as with refrigerators, the compressor motor on a HPWH system produces some noise, so it may be wise to pick a location where the sound can never be a nuisance.

Perform regular maintenance. Heat exchange surfaces perform better when clean, and HPWH systems are no exception to the rule. To maintain good energy performance, clean the filter that protects the evaporator's heat exchange surfaces, and keep it clean. This is particularly important in kitchens and other areas that contain airborne pollutants.

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What's on the Horizon?

If heat pump water heaters are so efficient, why aren't more of them being purchased? High first costs, historical reliability issues, and an uninformed design community are the three main culprits. The complexities of HPWHs also make them more difficult to install, raising the price of installation as well as the opportunity for installation errors. This was the case throughout the 1990s and early 2000s for both residential and commercial systems, which led to the declining use of HPWHs. For the most part, the only engineers today with the knowledge to properly design commercial systems are the manufacturers themselves. Residential systems, on the other hand, are simpler to choose and install due to the advent of integrated systems, but because very few HVAC distributors carry them, very few homeowners will purchase them. Furthermore, many contractors are not aware such systems even exist and therefore do not advocate them.

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Who Are the Manufacturers?