Water heaters last a long time, and you shouldn’t have to replace yours very often. When it is time for a water heater replacement, however, it’s important to compare your options carefully so you don’t get stuck with an unreliable source for hot water over the next 10+ years.
In this guide, we compare two of the most popular types of water heaters—tankless vs heat pump water heaters—to help you make the best choice for your home.
Heat Pump Water Heaters
Heat pump water heaters use the same technology as heat pump HVAC systems. They transfer heat from the surrounding air into the water in the tank instead of generating heat directly by burning fuel, the way a conventional water heater does. This is a much more energy efficient process, which is part of the reason why heat pump water heaters have become so popular in California.
Tankless Water Heaters
Tankless water heaters heat water only when it’s needed instead of storing hot water in a tank. Because they don’t have a storage tank, they’re much smaller than other types of water heaters and can be ideal for small spaces.
Heat Pump Water Heaters vs Tankless Water Heaters
There are a few key areas to consider when considering a new appliance for your home: energy efficiency, performance, safety, lifespan, and cost. Let’s see how heat pump water heaters and tankless water heaters stack up in each category.
Energy Efficiency
- Heat pump water heaters are typically the most energy efficient option. Because they don’t generate heat, they can be two to three times more efficient than conventional electric resistance water heaters.
- Tankless water heaters are also more efficient than conventional water heaters. Since they don’t have storage tanks, they are not susceptible to stand-by heat loss.
Performance
- Heat pump water heaters are available in many sizes. They can be sized to meet your family’s water heating requirements so you won’t have to worry about running out of hot water in the middle of a shower.
- Tankless water heaters tend to be less reliable—if you need to run the dishwasher while taking a shower, a tankless water heater may not be able to handle the strain. They work well for apartments and small houses, but cannot meet the needs of most large homes or families.
Safety
- Heat pump water heaters don’t burn fuel, which means there is no risk of carbon monoxide leaks. It’s the safest and healthiest option for home water heating.
- Gas-fired tankless water heaters burn fuel, which means there is always a risk of carbon monoxide leaks.
Lifespan
- Heat pump water heaters typically last for 12-15 years.
- Properly maintained tankless water heaters can last for up to 20 years.
Cost
- The cost of a heat pump water heater is typically between $1,500 and $3,000. But heat pump water heaters are eligible for incentives that can significantly reduce the cost. The Energy Efficient Home Improvement Credit (aka the heat pump tax credit) reduces your federal tax liability by 30% of your heat pump water heater installation costs, up to $2,000.
- Tankless gas water heaters can cost anywhere from $800 to $2,000. They are not eligible for federal tax incentives.
The Winner: Heat Pump Water Heaters
Heat pump water heaters are the clear winner in most categories. They are extremely energy efficient, which can lead to lower operating costs, and they’re eligible for excellent incentives. They’re also safer and more reliable than gas-fired tankless water heaters. But, every home is different. An experienced water heater installer will be able to help you choose the best type of water heater for your home and install it for optimal performance.
The Best Heat Pump Water Heater Installers in California
The Clean Energy Connection makes it easy to find a qualified heat pump water heater installer in California. Our free online directory features highly experienced and carefully vetted clean energy contractors, including water heater installers. You can search the directory by services, location, incentives, languages spoken, and more to find the perfect contractor for your water heater installation.