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Heat Pump Water Heaters A Hot Commodity, But Not For Everyone

New Zealand Ministry of Business, Innovation and Employment
Diagram of a heat pump water heater

Electric water heaters eat up a lot of power -- and can take up about a fifth of your electricity bill. But there’s a hot new thing in the water heater world.

It’s called the heat pump water heater. Most Northwest utilities claim the new device can save you a lot of money, and they’re offering big rebates to people who make the switch from standard electric.

But heat pump water heaters aren’t right for everyone.

A refrigerator in reverse

It’s a misty afternoon on the Tualatin River and Gary Miller is in a good mood. It’s the first time he’s relaxed since last week, when his old electric water heater broke and "left fifty five gallons of water on the floor to bail out.”

After the cleanup Miller went online to check out his options for a replacement. There he found that he was a good candidate for a new water heating option: the heat pump water heater.

It works like a refrigerator but in reverse. Your refrigerator keeps your food cold by pushing warm air out. A heat pump water heater pulls warmth from the air around it to make the water hot, and cool air gets pushed out. That uses less energy than a standard electric water heater, which just heats your water with an electrified piece of metal.

Miller says he started to look at electric water heaters, "and the heat pump water heater seemed like the best solution for value over time.”

Huge potential

Brian Knight from George Morlan Water Heaters is just finishing up the installation of Miller’s new appliance. He says heat pump water heaters are the most exciting thing to happen to his industry in three decades.

"For the cost you just can’t beat it, you just can’t beat the savings," says Knight. "When mine fails at my house I will have the heat pump heater in my house.”

Now most of the major Northwest utilities are pushing the new product. They're working through a consortium called the Northwest Energy Efficiency Alliance to offer rebates up to $1,000 dollars per customer. And that’s on top of state and federal tax credits.

Project manager Jill Reynolds says the initiative could do a lot to reduce the Northwest’s electricity use.

“Fifty-five percent of our region’s homeowners have electric water heat and so that right there is a huge potential," she says. "And if every one of those homeowners switched to a heat pump water heater it would be enough energy saved to power Seattle and Boise."

But Reynolds says that the Northwest Energy Efficiency Alliance is also thinking nationally. The federal government has already mandated that by the year 2015, all big industrial sized water heaters have a heat pump. Northwest utilities want to show that a similar regulation would work for smaller residential sized heaters, and they want their customers to prove the point.

“That is our ultimate goal, is to influence that federal standard,“ says Reynolds.

The right choice?

But some in the water heater business question whether the Northwest should be on the frontline of that fight.

“I doubt it will ever be the only thing we ever put in,” says Mike Spicer, co-owner of Portland’s Stan the Water Heater Man.

Spicer knows a lot about water heaters and he says that, for many people, a heat pump water heater is not the right choice.

For one, heat pump water heaters work slowly. They can take up to eight hours to heat up a tank of water. that’s about four times as long as a standard electric heater.

“Most of them do have an electric element backup," explains Spicer. "But you turn that on and you might as well have an electric water heater then.”

Heat pump water heaters also make noise. If the heater is in your garage, or like Miller’s in your basement, that noise probably won’t be a problem. But Spicer says that he has been called to remove heat pump water heaters installed in people’s bedrooms.

Another reason you don’t want these appliances where you hang out: cold air. Spicer explains that heat pump water heaters "take heat out of the air, and they exhaust cold air. So if they just exhaust cold air back into the room, then you have to fire an expensive furnace to reheat that air!”

And even after all the rebates, heat pump water heaters can still be pricey. Gary Miller paid around $1,200 dollars out of pocket -- more than twice what it would cost him to put in a standard electric model.

He can expect it will take about five years to see that money back in lower electricity bills.