Install Electric Heat Pump Water Heater

What kind of water heater?  Heat pump water heaters work just like an air conditioner, but in reverse.  They are highly efficient electric water heaters and are the best option for both low cost and low impact on climate.

Households: 0 completed, 5 committed
Points ?
Annual Savings
$1,500 - $3,000
Upfront Cost
These are estimates

Energy and water savings

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kWh Electricity
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Therms Natural Gas
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Gallons Gas
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Gallons Water
  • Save money and energy
  • Reduce carbon emissions and air pollution

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The Action
We will install an Electric Heat Pump water heater.
Is this action for me?
If you own your home, this action is for you.
When and Who?
This should be done when your current water heater is in need of replacement. However, water heaters can go out quickly, so it is best to do your research ahead of time and be ready to go. The work is best done by a professional.
How long will it take?
Medium - time to learn about your options, get quotes and manage contractor.
What is the cost?
around $1,500 - $3,000 or more depending on the model and any upgrades required.


  • Save money and energy

  • Reduce carbon emissions and air pollution



Energy Upgrade California® Rebate for Energy Efficiency Home Improvements

Energy Upgrade California® Rebate for Energy Efficiency Home Improvements

Get a $300 rebate for an electric heat pump water heater from PG&E.


Find loan options for home energy & water upgrades through Property Assessed Clean Energy (PACE) Financing

The Basics

If it’s time to replace your water heater, you can save money, energy, and significantly lower your impact on climate, by switching to an electric heat pump water heater. Heat pumps just make sense.


Get ready before your water heater stops working
Learn about heat pump water heaters
Choose a contractor and install your new system
Maintain your system

When to upgrade?

The best time to upgrade your water heater is when it stops working.  However, this can happen fast, so it is best to do a bit of research ahead of time and be prepared if you plan to switch to a heat pump water heater. Complete any required retrofits or upgrades before your water heater fails.

About electric Heat Pump water heaters

Why choose a heat pump water heater?  There is a long list.  First, a heat pump water heater will save most people money.  They are so efficient that they can be less to operate than even conventional tank or tankless gas water heaters (depending on your energy rates).  On average you can save up to nearly $300/year over a conventional electric tank water heater, $130/year over a conventional gas tank water heater and $30/year over a tankless gas water heater.  On top of this there are often rebates and tax incentives.  

Heat pump systems cost a bit more, but will often pay for itself over time (depending on your energy rates).  Installation for a heat pump system can run on average $1,500 or more, compared to a conventional gas tank system which runs on average from $800 to $1,200. The higher cost is due primarily to the higher cost of the unit, which is around $1,100 or more compared to gas units from $500-$600.  There can be additional one time costs for the initial installation if a new electrical outlet is required or the electrical panel requires an upgrade to accommodate the additional electricity load. 

In addition to the energy and cost savings, the climate impact is also significant.  When you install an Electric Heat Pump system you are often converting from gas, propane or oil, which are fossil fuels, to electricity, which we can transition to clean, renewable sources.  If you have an electric water heater now, you will reduce energy use by over 60%.  

If your electricity provider uses mostly coal to generate your electricity currently, your climate savings from switching will not be significant initially.  However, since prices for renewable electricity sources like solar and wind are dropping and many areas have policies to increase renewable energy sources, your impact will be reduced over the lifetime of your water heater.  Better yet, install a heat pump water heater and sign up for a green electricity program and be 100% emissions free with your home water heating right away!  

Finally, since heat pump water heaters have a tank, they have the potential to be an important part of demand response program and can be used in the future to help balance community energy needs.

Choose a new water heater, install and save!

Before you buy a new heat pump water heater, learn a bit more about water heaters, how they work and the important factors in choosing a system with the Energy Star and Consumer Affairs guides.  Consult a professional to help you calculate your savings and figure out which system is best for you.  Choose an experienced contractor and check references and quotes before you choose.  Finally, once you have installed your new system, make sure to maintain it for maximum efficiency, energy savings and comfort!

Success Stories

I have been on the Menlo Green Challenge since it began in 2016, and have completed many of the actions on the website. 

One of the quickest and easiest ways to reduce Carbon footprints is to change eating habits. I cut red meat out of my diet since the carbon footprint for beef is 28 times its own weight and lamb has a footprint 35 times its weight. 

I also take alternative forms of transportation.  I’m a long-time bike rider and use a bike on most trips under 5 miles. Using bikes for short trips has enabled our family to share one car and save lots of money. Some folks say biking isn’t for everyone though; for two-car families, I highly recommend having one of the vehicles be electric!

I've installed solar panels on my home, which cut my electricity bill down to $10/month. That is the lowest bill a customer can receive from PG&E to support the electric grid. I work with a non-profit called SunWork, and they were able to help me install solar, with a 30% discount because our household was already energy efficient. If you’re efficient and your energy bill is less than $100 per month, you could also use Sun Work and their local volunteers to help install low cost solar.

I also installed a heat pump water heater in my house, replacing the gas one. After tax credits, the heater was $500. It is an electric heater, so together with solar panels, it’s great to use renewable energy instead of fossil fuels to heat our water.

I enjoy finding creative, innovative ideas that help my household become efficient and sustainable. I developed a system that delivers waste heat from solar panels back into my home, recycling the excess heat and making it purposeful. This solar heater is still a prototype; I’m still figuring out the best way to prevent leaks in the system.

Taking shorter showers is a great way to save water; you can save energy too, with lower water temperatures, starting by turning your water heater setting down. My shower has a covering that traps steam in, preventing drafts that makes you cold. The cover has the added bonus of allowing you to shower comfortably at cooler temperatures.  

Whether you’re handy at home or not, everyone can take actions to reduce their carbon footprint. Getting started is easy with this Green Challenge site.