How to Shop for a Heat Pump Water Heater

Anyone who owns a home that uses hot water should at least consider getting a heat pump water heater.

Even if your current water-heating system is working fine, you should still start thinking about it. After all, regular access to heated water is a luxury we often take for granted, so it’s all the more frustrating when your system fails on you.

It might take 10, 15, even 20 years, but eventually, your hot water heater is bound to break. So you need to have a plan in place before that happens. Otherwise, you’ll be left without hot water for who knows how long. And no one wants that.

Heat pump water heaters are the future. In fact, in July 2023, the US Department of Energy proposed a new set of standards that would essentially phase out most non–heat pump models by 2029. But the question of whether it’s the best choice for you right now is a bit more complicated.

If you want the most energy-efficient option available, get a heat pump water heater. Unlike electric and gas heaters, which must create heat to warm the water, heat pump water heaters simply take the heat particles that already exist in the air and move them into the water. As a result, heat pump water heaters usually have an efficiency rating between 3.0 and 4.0 UEF (Uniform Energy Factor, the standard US measurement); that’s about three to five times higher than you get with even the best gas and standard electric water heaters out there.

You don’t have to worry about losing energy in the conversion process, either—every watt of energy that goes into a heat pump model results in three to four times the equivalent heat energy.

“A gas system is a great energy producer. But a heat pump water heater is a great energy transfer,” as Leo Pesegoginski, a project manager at Boston Standard Plumbing, succinctly explained it to us.

A heat pump water heater could be a great choice if you want to reduce your utility bills. The amount of savings will depend on your current setup, as well as where you live. If you already have an electric water heater, for example, a heat pump will use only about a quarter of the energy. If you’re switching from a gas-powered system, however, the savings might not be as impressive—though most people are still likely to save some money by making the switch.

It’s also great if you’re looking to electrify your home. In fact, there are some models—like the A. O. Smith model we recommend—that can plug directly into a standard wall outlet without any additional electrical upgrades, making it easier than ever to move away from fossil-fuel dependence.

Most heat pump water heaters also come with smart-home-integration options, including Demand Response (which can help you sync up to the local electrical grid), and they further optimize energy use not just in your home but across your entire community. This sort of electrification is a major step toward broader decarbonization ¹ and sustainability goals.

A heat pump is also the best way to take advantage of financial energy incentives from the Inflation Reduction Act. While heat pump water heaters tend to cost more upfront than other home water-heating systems, installing one can earn you a tax credit of up to $2,000, which can help to offset that price difference. And some states offer additional incentives on top of that. By contrast, even the most efficient natural gas water heaters will still only qualify for a $600 credit at best.

A heat pump water heater is a particularly good choice if you live in a humid area or you have a dank basement. Heat pumps tend to pull in moisture from the air around them (not unlike an air conditioner). This is a normal part of the process—but it can also be a nice bonus feature because it makes the water heater work like a dehumidifier at the same time.

That excess water still has to go somewhere, though. If you already have a sump pump or other wet-basement solution in place, then you should be fine; if not, you may need to add extra piping to make sure that water drains out with the rest of the plumbing.

But it isn’t a great choice if you expect heating on demand. “You can’t have hot water on demand because heat pumps only slowly accumulate the heat,” explained Joel Rosenberg, senior program manager for special projects at Rewiring America. As a result, heat pump water heaters tend to have a longer recovery time—that is, the time it takes to reheat a tank of water after you’ve used it all up.

Tank-based water-heating systems also inevitably deal with some level of standby heat loss, but heat pump units are so efficient that this should be minimal.

“Once the heat pump water heater gets to the right temperature, it maintains it with very little energy input,” Rosenberg said. (If you don’t want to deal with water storage or standby heat loss, you might want to look into a tankless system.)

A heat pump water heater is also not great if you value silence. Unlike other water heaters, heat pump water heaters use fans to help draw in the air. And fans tend to make a little noise (though it’s still quieter than what’s considered normal conversation level). If your water heater is tucked away in the basement or a utility closet, you might not even notice it; if it’s closer to your living space, however, it could be a source of frustration for some people.

And it might not be the best choice if you have limited space. Most heat pump water heaters need a minimum of at least 700 cubic feet of space around them to have enough air from which to extract that ambient heat. Though some models, like the 120-volt A.O. Smith, need only about 450 cubic feet. (The US Department of Energy recommends 1,000 cubic feet for optimal performance.)

If you’re planning to install your water heater in an open part of the basement, that’s great! If you’re trying to replace a tankless unit or squeeze your water heater into a tight utility closet, you might need to add some sort of venting or duct system, which could add to the cost.

Another thing to note is that you may need to increase the capacity when replacing an electric or gas model with a heat pump. Most contractors and manufacturers recommend upsizing the tank by roughly 30%, to compensate for the extra-long recovery time. A home that ran on a 50-gallon natural gas water heater, for example, should upsize to a 65-gallon heat pump water heater. This helps to ensure that there’s always some extra hot water, in case you’re about to run out—but it also means you need a little more clearance space.

Also, be warned: A heat pump water heater can have a higher upfront cost. Most heat pump models cost at least twice as much as an equivalent-size electric or gas water heater; any additional installation complications can add to the price as well.

There are plenty of financial incentives available to help reduce the costs, and the increased efficiency will likely help to make up the difference over time. But if you’re tight on money at the moment—and the rebates and tax breaks don’t work for you—then a standard gas or electric replacement might be the better choice right now.

We typically make Wirecutter picks based on first-hand testing. We live with the products in a real-world setting, taking notes on various metrics and experiences over time.

But that’s difficult to do with something as large and complicated as a water heater, which usually requires the expertise of at least one licensed installation professional.

It can also be difficult to evaluate a company’s claims about longevity and durability with something that’s specifically designed to sit there for a decade or more, with little interaction.

The picks in this guide are based on research and reporting but not hands-on testing.

Rest assured, I spent a lot of time combing over spec sheets and talking with experts about heat pump water heaters. And I spoke with product managers at Rheem, Rinnai, and A. O. Smith in follow-up conversations, after hearing about their new gear at the International Builders’ Show.

I interviewed several plumbers, wholesale plumbing-supply distributors, and the CEO of a water heater tech startup.

I also spoke with several electrification experts, including some DIYers who installed their own heat pump water heater systems.

Finally, I invited multiple contractors into my home to learn about the installation process from a consumer perspective. And I asked about their experiences with other customers and the frustration points or other complications they’d heard about.

Although this does reflect a departure from the usual Wirecutter approach, we hope this guide still serves as a good foundation for anyone deciding whether a heat pump water heater is a fit for their home. In the future, we plan on installing some models to test ourselves (including a 120-volt one), and we will continue to update this guide with additional notes.

Rheem has been manufacturing hot water heat pumps since the mid-2010s. The company’s fifth-generation model, the Rheem ProTerra XE65T10HS45U0, offers the most well-rounded combination of high-efficiency performance along with other convenient features, including smart-home connectivity and a hybrid electric backup system, which kicks on when the tank is running low.

Like most heat pump water heaters, this model also comes with a 10-year warranty.

The upfront cost is an investment, but it should pay off in the long run.

The Rheem ProTerra XE65T10HS45UO is extremely energy-efficient. Depending on what size tank you get, the ProTerra models clock in between 3.88 and 4.07 UEF; that makes them at least four times better than any other non–heat pump water heater out there. Nearly every heat pump model we’ve seen has been at least a 3.0, but very few make it all the way to 4.0 or beyond.

If you run out of hot water, this model has a hybrid backup heating system. If you have a hot-water emergency—like when kids and guests take way-too-long showers—the Rheem model also has a regular (non–heat pump) electric resistance coil that kicks on to refill the water tank faster.

“It’s basically a standard electric water heater on the bottom—just like millions of people already have—with a heat pump on the top,” explained Scott Cohen, director of marketing at Rheem.

Although the heat pump component can recover about 27 gallons of hot water per hour on its own, the electric backup can handle up to 75 gallons.

“It sacrifices some of the efficiency for the comfort of the homeowner,” Cohen said. “But that allows people to adopt this new technology without having to change their behavior.”

And with the unit sized correctly for the home’s typical demands, the backup system would rarely operate.

The Rheem model comes with a variety of handy smart-home features. That includes Demand Response and leak protection.

Whereas most heat pump hot waters have basic smart-home connectivity (app/voice control, scheduling, energy monitoring, and so forth), the Rheem also comes with built-in leak protection, including an automatic water-shutoff system in the case of an emergency. Water damage is one of the most common (and expensive) forms of home damage, and many insurance companies offer discounts to homeowners who install some kind of smart leak detector—which can save you even more money in the long run.

Like most hot water heat pumps, this one comes with a 10-year warranty. The energy savings you get from this model over the course of those 10 years can help make up for the higher upfront cost, too.

But it may require a little more-routine maintenance. Heat pump water heaters like the Rheem use fans to pull the air in, which means they also have a built-in air filter that will occasionally need to be cleaned. This isn’t much different from the filter you’d find on an air conditioner or dehumidifier (or other large appliances with fans), but it still marks a noticeable change from the set-it-and-leave-it water heaters that most people are used to.

You may also need to have some additional electrical work done. If you already have an electric water heater, then don’t worry about it; you can fit your new heat pump model right into the existing infrastructure.

But if you’re looking to upgrade from a natural gas system, you’re going to need to run the wires for a 240-volt connection—which could also mean upgrading your electrical panel, if you don’t already have a configuration that can support the additional breaker.

The A. O. Smith Signature 900 HPV10-66H01DV offers a lot of the same perks as other heat pump water heaters, including a high efficiency rating, smart-home features, and a 10-year warranty.

But it stands out because it’s one of the few models that require only a 15-amp (120-volt) circuit. So if you have a standard outlet available where the heater’s located, you could install it without bringing in an electrician or having to upgrade your electric panel.

Even at that lower voltage, it still has room for a backup hybrid heating component, too.

If you’re going through a contractor, the A. O. Smith Voltex HPTV-66 is the wholesale version that’s otherwise essentially identical.

The A. O. Smith Signature 900 can be plugged into any standard electrical outlet. Yes, really; you can run an entire 80-gallon water heater system with a regular ol’ wall outlet, without having any additional electrical wiring (though you could still hire a plumber to do the water-supply fittings and related work).

“It’s really aimed at the emergency replacement of a gas water heater,” explained Arthur Smith, a product manager (and member of the namesake family) at A. O. Smith. “It simplifies the installation process but still provides the same efficiency benefit without the upfront cost.”

It doesn’t need as much space as other heat pump water heaters. While most hot water heat pumps require around 700 to 1,000 cubic feet of space to have enough hot air to pull from, the A. O. Smith model can work in spaces as small as 450 cubic feet. (It still works more efficiently in a larger space.)

The water in the tank gets even hotter, too, which means you use less of it. Heat pump water heaters can be slow to recover when they run out of water. But the Signature 900 has a clever solution: It overheats the water by default and then mixes it with cold water on the way out of the tank, so it meets your target temperature before it hits the pipes.

This ultimately uses less hot water to achieve the same results. “That means we can store more thermal energy and ultimately deliver more hot water,” Smith said.

It’s one of the quietest heat pump water heaters we’ve seen. With a decibel rating of just 45 dB-A, the Signature 900 falls well below the standard threshold for “normal conversation level.” For most people, a fan at that volume will just disappear into the white noise of the background (though, again, it will depend on your specific situation).

It has a backup heating system, but it’s not the most powerful. This is a trade-off for using a heat pump water heater with a standard wall plug—it just can’t pull the same amount of energy as a standard 240-volt model. Still, the Signature 900 can refill its tank in about an hour using just 900 watts, while our other picks all have capacity for up to 4,500 watts.

It’s not quite as efficient as a 240-volt system, either. The 120-volt Signature 900 has an efficiency rating between 3.0 and 3.46 UEF, depending on the size of the tank. While that’s not as high as it could be if you went for the full electrical-panel upgrade, it still beats any standard electric or natural gas alternative you can find.

It’s slightly more expensive, too. 120-volt heat pump water heaters tend to cost a little more than a 240-volt model of the same size. But, hey, at least you don’t have to pay for an electrician!

The LG APHWC501M Inverter Heat Pump Water Heater is one of the best and quietest choices out there.

It also works with the LG app, so if you already have other LG appliances in your room, you can integrate them all together into a more-robust smart experience.

Plus, it looks cool—which is not a thing you often hear about a water heater.

The LG model is the absolute quietest and one of the most efficient. This model uses LG’s dual inverter compressor technology, which we’ve tested on other products, including a long-standing portable air conditioner pick. That compressor works in conjunction with the heat pump itself to result in an impressive efficiency rating of 3.9 UEF or higher (depending on the size of the tank).

The variable speed also means it has a gentler sound, even on the fan, with the LG typically measuring around 42 decibels—quieter than any heat pump water heater out there. That’s quieter than even the quietest dishwasher available right now.

It has more-robust smart-home integration. If you have other LG appliances in your home, you can run them off of the same app as your heat pump water heater, so you can consolidate your scheduling, energy monitoring, and more. You can even use Demand Response to sync your entire home to the grid.

The LG is the nicest-looking water heater we’ve ever seen. While researching this guide, we visited a large regional plumbing wholesale warehouse, where the clerk joked that the LG looked more like a “fancy refrigerator” than a water heater. Aesthetics might not be your top priority, but this is a nice perk.

But LG is new in the water heater space. While LG has plenty of experience with heat pump technology and heating/cooling products in general, the APHWC501M is the company’s first foray into water heating (though LG does sell an air-to-water heat pump system as well).

By contrast, A. O. Smith has been making heat pump water heaters since 2010 and other water heaters for nearly a century. Rheem is similarly on its fifth-generation model, with another 70 years of general water heater experience on top of that.

Although LG makes plenty of other great products, the company doesn’t have quite the same pedigree with water heaters.

You’ll also have to go through a contractor to get it. Even if you don’t need to hire a licensed contractor for a full electrical upgrade, the LG is currently available through wholesale channels. You could still ask your plumber for this specific model, but you won’t be able to buy one at a store and then just hire someone to switch out the connections.

Heat pump water heater technology is efficient and impressive—but it also comes at a premium.

A natural gas or standard electric system typically runs between $700 to $1,000 for the hardware, before you factor you in the price of labor and installation. A tankless system (gas or electric) will probably cost you a little more than that.

By contrast, a decent heat pump water heater can sometimes cost another $1,000 to $1,500 on top of that.

Yet a heat pump water heater still might be the most valuable option over the long haul (though the specifics will depend on where you live). For one thing, the improved efficiency means you’ll almost certainly reduce your monthly utility bills ², which could help offset the cost over time.

Unlike gas or standard electric water heaters, heat pump models also qualify for incentives under the Inflation Reduction Act. This means a federal tax credit of up to $2,000, plus any additional discounts offered by your state government.

Case in point: I received some contractor quotes for my own home in Massachusetts while working on this article. In order to replace our natural gas heater with a newer, high-efficiency gas model, it would have cost around $6,300, including labor and a 10-year warranty. A standard electric water heater would cost about the same, even though it would involve some additional electrical work; we’d also have the option to add a lifetime warranty for an additional $1,200, bringing the total price closer to $7,600. While the heat pump water proposal had the highest overall price tag—about $8,100—we would also get a $2,000 federal tax credit plus a $750 rebate from the state, ultimately making it the most enticing option.

The 120-volt Rheem ProTerra Performance Platinum XE65T10HM00U0 is similar to our also-great pick from A. O. Smith, but it comes in a wider range of sizes. The smaller models aren’t quite as efficient as other heat pump water heaters, however, and this one doesn’t have any sort of emergency backup heating system.

Similarly, the 240-volt A. O. Smith Signature 900 HPS10-50H45DV is not unlike our top pick from Rheem, but this model has a slightly slower recovery time, particularly in the first hour after the tank is emptied. It also lacks Demand Response capabilities, but otherwise it looks like a reliable alternative. Like our other A. O. Smith pick, the 240-volt model is available retail if you just want to find someone to install it. You can also go through a contractor, in which case, the wholesale ProLine XE Voltex model is essentially identical.

The Rinnai REHP series is another contractor-exclusive heat pump model with slightly more flexible installation options, thanks to a unique “zero clearance” design, which allows you to access the hookups and controls even when it’s flush against a corner wall. Beyond that, the Rinnai has a similar efficiency rating and recovery time as other heat pump water heaters we looked at, but it lacks any sort of built-in leak detection.

This article was edited by Harry Sawyers and Ben Frumin.