Hybrid Heat Pump Water Heaters: Benefits, Cost, & Savings


hybrid water heater

Hybrid water heaters (also known as heat pump water heaters) are an interesting alternative to traditional water heaters. Using heat pump technology to absorb heat from the surrounding air, they offer a novel way to heat your home’s water.

Are the hybrid water heater benefits worth the cost? Hybrid heat pump water heaters can save you a lot of money long-term compared to a standard electric water heater. Hybrid water heaters use 3x less energy but have higher upfront installation costs and require more maintenance than traditional electric tank water heaters.

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The below table compares the cost of operating an electric 50-gallon water heater and a 50-gallon hybrid heat pump water heater over a 10 year period.

50 Gal Electric
Water Heater
50 Gal Hybrid
Water Heater
Initial Cost $550 $1500
Annual Energy Cost $419 $110
First Hour Rating 63 Gallons 53 Gallons
Manufacturer Warranty 6 Year 10 Year
First Year Cost to Operate $969 $1610
Five Year Cost to Operate $2645 $2100
Ten Year Cost to Operate $4740 $2650
Source: https://youtu.be/omivdhxdGv0. The cost to operate does not include installation costs. The dollar amounts are approximate based on average use.

There are many factors to think about when considering replacing your current water heater with a hybrid unit. This article will talk about all of them at length, including:

  • How a hybrid water heater works 
  • The benefits of a hybrid water heater
  • The drawbacks of a hybrid water heater
  • How long a hybrid water heater typically lasts
  • Hybrid water heater installation tips
  • Hybrid water heater service and maintenance tips
  • How much a hybrid water heater typically costs
  • How large a hybrid water heater is

How a Hybrid Water Heater Works

If you’re considering buying a hybrid water heater, you should have a basic understanding of how it works. 

The room in which you install your hybrid water heater will inevitably have air in it. This air will, in turn, be carrying some ambient heat. Your hybrid water heater will absorb this air ‒ and therefore the heat ‒ and use it to heat your water. This is why hybrid water heaters are often called “heat pump” water heaters ‒ they “pump” in heat from the surrounding room and use it to heat water. 

Here’s a step-by-step walkthrough of how a heat pump water heater uses air to heat your water:

  1. A built-in fan at the top of the heater brings air into a small compartment. 
  2. The air runs across an evaporator coil, which captures the heat energy contained in the air. It transfers that heat energy to a refrigerant contained in the evaporator chamber.
  3. Now cooler and mostly devoid of heat energy, the excess air is exhausted back into the room. 
  4. The refrigerant gets warmer as heat energy is transferred to it. When it reaches a temperature-related tipping point, it changes from a liquid to a gas. 
  5. The gaseous refrigerant exits the evaporator chamber and enters the compressor chamber. 
  6. The compressor compresses the gas, which superheats it. 
  7. The superheated gas flows into the heat exchanger chamber. 
  8. The heat exchanger takes the energy from the gas and transfers it to passing cold water. A pump moves cold water from the tank through the heat exchanger. This is what actually heats the water. 
  9. The now-hot water leaves the heat exchanger and is deposited back into the tank.
  10. The gaseous refrigerant cools down, turning back into a liquid. 
  11. The process is repeated whenever you need hot water.

While hybrid heaters use electricity, they don’t always use it in the same way traditional electric water heaters do. Traditional water heaters use electricity to power heating elements that directly heat the water. Hybrid units typically use electricity to power the internal components that “pump” warm air into the unit.

It then uses the heat from the air to heat the water. This heating method uses less than half of the electricity a traditional electric heater uses, making it an extremely efficient way to heat your home’s water.

I say hybrid water heaters “typically” use electric power to pump in heat from the surrounding air because they don’t always have to. If the water demand is high enough, hybrid heaters can switch to traditional electric resistive heating using elements located inside the tank. 

Traditional water heaters use heating elements to warm their water, but it isn’t as cost-effective as extracting heat from the surrounding air. However, it’s a great option to have in a hybrid heater if you need a lot of water in a short period of time.

The heat pump feature is certainly energy-efficient, but it can’t heat a large amount of water quality quickly enough to meet a great demand for hot water. 

The Benefits of a Hybrid Water Heater 

You’ll save money on your energy bill

Heat pump water heaters are extremely energy efficient. As I mentioned earlier, they use about 3x less energy than an electric tankless water heater does ‒ which is really saying something, as electric tankless units are considered extremely efficient options. 

Also, every single hybrid water heater runs exclusively on electricity. None of them use natural gas to heat water. This means that homeowners used to gas-powered heaters will see even bigger savings on their energy bills. Natural gas is typically a more expensive fuel source than electricity. 

You can customize your usage

Most hybrid water heaters have a control panel that allows you to choose between a useful selection of different heating modes.

  • Auto mode: This heating mode is the most common setting used. It automatically adjusts to your current hot water demand, engaging both the heat pump and electric element as needed. 
  • Efficiency mode: This heating mode only engages the heat pump, which is more efficient and lowers your energy costs.
  • Electric mode: This heating mode only engages the electric element, which is great for high-demand situations.
  • Sleep mode: This heating mode will put the unit to sleep, saving on energy costs when you’re away from home for an extended period of time. 

It’s good for the environment

Unless you consistently use the electric mode, your hybrid water heater will use less energy than the gas-powered and traditional electric alternatives. As such, it will have less of an impact on fossil fuel emissions than other less expensive water heaters. 

If you want to go the extra mile and further decrease your impact on the environment, you can power your hybrid water heater with solar panels. One of the main concerns with solar panels is that they won’t handle the energy load required by your home’s devices. Because heat pump water heaters use less energy than the alternatives, you can easily run one using solar energy. 

It’s safer than a gas-powered water heater

Hybrid water heaters run on electricity, which is a much safer source of energy than natural gas. 

Even if you take every possible safety precaution, having a gas reservoir anywhere near your home is a potential danger. This threat is only heightened by the way gas-powered heaters operate. 

Hybrid water heaters can supplement cooling

Hybrid heat pumps expel cool air as it heats water using heat pump technology. Most water heaters are located in basements or garages, which are generally hotter since these areas are often not air-conditioned.

This cool air output from the heat pump water heater can keep an area, like a garage, cool all year round. This can be very advantageous if you live in a mild climate that is warm for the majority of the year.

The Drawbacks of Hybrid Water Heaters

They’re expensive compared to traditional water heaters

The initial cost is what turns most people off from purchasing a hybrid water heater, as traditional water heaters cost significantly less than hybrid water heaters do. 

The average tankless heater goes for about $500-$1700, while the average tank-based heater goes for about $400 – $800. To compare, the budget price for a heat pump heater is about $1,000 ‒ and they can go as high as $2,500 or more.

While you will typically make up for this upfront cost in energy savings down the road, the hefty purchase price is more than many families can comfortably handle. Manufacturers suggest the units increased cost can pay for itself in approximately 2 years of use.

If the initial cost is too much of a factor, some companies do offer to finance, or you can use a credit card. However, you should be wary of financing hybrid water heaters if the reason you’re going with a hybrid water heater is to save money. The additional money you’ll spend on monthly payments will more than likely offset any energy savings the hybrid unit brings. 

They’re inefficient in cold environments 

Because hybrid water heaters work by pulling in hot air from their surrounding environment, they don’t work well in colder environments. 

Energy.gov recommends the location in which you store your hybrid water heater has a minimum temperature of at least 40 degrees Fahrenheit. If the temperature goes lower than this, the heat pump won’t work properly. The heater will have a tough time pulling enough ambient heat to raise your water temperature to an acceptable level.

This means your water heater will have to use the electric element to heat water ‒ which will increase your energy consumption and raise costs. 

This problem is exacerbated by the fact that hybrid water heaters typically expel cold air into the room around them, barring some exhaust systems. The cold air given off by your heater will further lower the temperature of the room, making it even harder for your heater to pull enough heat.

They need a decent amount of space

Hybrid water heaters need a lot of air space around them ‒ at least 1,000 cubic feet, to be exact. If there are less than 1,000 cubic feet of air space surrounding the heater, there won’t be enough air available for the heater to work properly. If you’re working with a small closet or other confined space, a compact tankless water heater might be a better bet. 

If you have a lot of space around your water heater, you should also consider whether the space will be used as a living area. In addition to the noise they make, hybrid water heaters emit air that might be cooler and drier than you would like. So if you will be installing the heater in a living area, you should consider installing an exhaust system that takes the air from your hybrid unit into another location ‒ preferably outside. 

Hybrid water heaters require more maintenance

Hybrid water heaters require more frequent maintenance than traditional electric water heaters. In addition to the traditional flushing service tank water heaters require, hybrid water heaters have a filter that requires cleaning every 2-3 months and heat pump components that require servicing.

Not everyone is trained to work on hybrid water heaters, and finding someone to service them can be difficult. Specialty training and services like this cost more money, which will offset some of the annual energy cost savings.

How Long Does a Hybrid Water Heater Last? 

hybrid water heaters

The average hybrid water heater will last for about 8 to 12 years. This number will vary depending on how much you use the heater and how well you take care of it. Here are a few factors that will affect how long your hybrid water heater lasts: 

  • How well you maintain your heater. There are several annual water heater maintenance checks and tasks you need to perform to ensure your water heater is problem-free and working properly. If you don’t perform this necessary water heater maintenance, one of any number of minor problems could turn into a critical issue that irreparably damages your hybrid unit. 
  • Proper installation. You should always hire a professional plumber to install your hybrid water heater. There are too many important steps that need to go exactly right during the installation process. Although a DIY installation may save you some money upfront, you could end up paying for it down the road when something unexpectedly leaks or breaks.
  • How hard your water source is. If your water has a consistently high amount of minerals, more sediment will build up in your tank and pipes. If you don’t flush your tank and pipes regularly, this buildup can damage your water heater and significantly shorten its lifespan.
  • Level of use. The more you use your water heater, the faster it will fall into disrepair. A high use rate is unavoidable if you have a large family, but know that excess use will decrease your water heater’s lifespan. 
  • Freeze protection. If the temperature where your water heater is installed ever drops below freezing, there’s a significant chance the unit will be damaged beyond repair. If you ever suspect the unit is in danger of freezing, you should consider draining the unit of water to mitigate the damage. 
  • Warranty length. Unless you’re flush with cash, the length of your warranty will have a definite impact on the longevity of your water heater. Once your unit is out of the warranty range, repairs that might have been covered become prohibitively expensive. 

Hybrid Water Heater Installation

Hybrid water heaters are more complicated than traditional water heaters. As such, you should almost always hire a professional to install for you. However, if you do want to perform a DIY installation, here are a few tips you should follow:

  • You should place your water heater in a dry location with a solid foundation. If you’re installing your heater on a raised platform above the floor, make sure the platform is level and completely solid. 
  • While this varies with different models, you should choose a room with at least 1,000 cubic feet of air space. Any less than this, and the heat pump will have trouble operating. 
  • Remove all flammable liquids and objects from the room in which your heater will be situated. Also, get rid of any flammable vapor sources. If you can’t remove these, you should find a different room to install your water heater in. 
  • The room’s temperature should never drop below 40 degrees Fahrenheit. If possible, use your furnace room, as the furnace will heat the air automatically. Just make sure there’s enough air space to accommodate the hybrid heater. Furnace rooms are often pretty cramped, so the heated air might not be worth losing air space. 

Hybrid Water Heater Service & Maintenance 

hybrid water heaters

Regular maintenance is critical to ensuring a long life for your water heater. Again, while hiring a professional to perform maintenance is best, the high costs involved don’t always allow for this. If you need to service your hybrid unit yourself, here are a few step-by-step instructions that will allow you to perform maintenance without breaking the wallet. 

Annual inspection

While most hybrid water heaters are manufactured at an extremely high quality, some things need to be checked every year. This step-by-step annual inspection will allow you to catch and fix any potential issues before they become critical. 

Step 1: Ensure the temperature reader is working correctly

The first step in the annual inspection is to check that the temperature reader is working properly. This is rarely a concern, but it’s still possible for the temperature reader to malfunction.

Many appliances need water to be at a certain baseline temperature to work properly. If the water temperature going to these appliances is too low, there’s a chance proper sanitization isn’t occurring ‒ which can pose some serious health risks to you and your family. 

Anyway, here’s how to check that the temperature reader is working as expected:

  1. Get a thermometer. A digital thermometer is preferable, but a manual one will work too. 
  2. Let your hybrid unit heat the water to the expected temperature. This should take 10 minutes at the most.
  3. When the water is fully heated, take a water sample from the heater and measure the temperature with your thermometer. 
  4. Compare the thermometer’s reading with the water heater controller’s reading. If the temperature difference is outside of the normal variance range (+/- 5 degrees Fahrenheit), the controller is malfunctioning. Contact your heater’s manufacturer to order a replacement. 

Step 2: Test the pressure relief valve

Most hybrid water heaters have a test lever attached to the temperature and pressure relief valve. After you confirm that the temperature is being read accurately, you’ll want to lift this lever for about 10 seconds to let the water run through the valve.

This will flush out any sediment that may have built up inside the heater, which is important because an excess of sediment buildup can limit the amount of water that can get heated. 

Step 3: Check the elements for leakage

The electric heating elements insert directly into the water tank, so any loose components can easily result in leakage. To check for leakage around the heating elements, follow this step-by-step process:

  1. Turn off the power supply.
  2. Remove the housing cover protecting the heating elements.
  3. Look for any signs of water around the seal that separates the internal element from the exterior shell.
  4. Rub your finger around the outside of the heating element. If you feel any moisture, contact your water heater manufacturer and order a replacement gasket.
  5. Replace the housing cover.
  6. Turn the power supply back on. 

Step 4: Drain and flush sediment the water heater

While flushing sediments out of the relief valve is important, the only surefire way to remove all sediments from the heater is to flush the tank entirely. This step-by-step process will walk you through this:

  1. Turn off the power supply.
  2. Close the hot water outlet valve. 
  3. Open the drain valve
  4. Allow water from the cold water inlet to flush sediment from the bottom of the tank. This should take no more than 5 minutes. 
  5. Close the drain valve. 
  6. Open the hot water valve. 
  7. Turn the power supply back on. 

Step 5: Check the sacrificial anode rod

Most water heaters with tanks should have a sacrificial anode rod to save the metal tank shell from rusting. You should check this rod at least once per year to ensure it hasn’t been completely corroded. If it has, your tank will start to rust instead ‒ which is a much more costly replacement. 

Different water heater models have different methods of checking the anode rod. I advise checking your water heater’s manufacturer documentation for the exact steps on how to do this.

Cleaning the heat pump filter 

In addition to the annual inspection, you’ll also need to clean the heat pump filter regularly. This is more of an as-needed maintenance task, and your hybrid water heater should display some error message to let you know when the filter needs cleaning. 

Cleaning the filter is a pretty simple process. Remove the filter from its slot and vacuum or wash with soap and water. If using soap and water, give it a few hours to dry before reinserting it into the slot. 

Hybrid Water Heater Cost

As I mentioned earlier, hybrid water heaters can go for anywhere between $1,000 and $2,500+ ‒ and that doesn’t include costs, which can add another $250+ to the bill. 

While it’s impossible to predict exactly how much your specific hybrid water heater and installation will cost, here are a few factors that can impact the price:

  • Tank capacity. The biggest indicator of the price is typically the water heater’s tank capacity. Smaller water heaters with a 40 to 50-gallon capacity typically go for about $1,000. The price increases substantially as you edge toward the 80-gallon range. 
  • Modernity. Newer water heaters can have some pretty cool features, including water leak detection alerts, Nest smart home compatibility, and vacation operating modes. These features are nice to have, but they’re not cheap ‒ be prepared to pay for them if you really want them. 
  • Installation. The most unpredictable cost of getting a hybrid water heater is probably the installation. Depending on the service you choose, installation costs can range from $250 to $1,000. You can often save on installation costs if you buy your unit from a major chain like Home Depot or Lowe’s ‒ they usually provide delivery and installation at a reduced rate when you buy from them. 
  • Climate. If you live in a colder climate, you’ll have to pay some additional money to insulate and protect your heater from the cold climate. This might not be too much if your heater is already insulated and you already have ventilation installed, but it’s something to consider when budgeting out the money you’ll need. 
  • Local energy costs. The amount of money a hybrid water heater saves you on energy costs is largely dependent on how much electricity costs in your area. You’ll also need to account for whether you’ll be using the heater during peak electricity usage times, which is when the power company often charges a higher rate for use. 

Hybrid Water Heater Size 

The last major thing you’ll need to consider when buying a hybrid water heater is the size. I’m more so talking about the capacity than the actual dimensions, but you’ll need to be aware of the dimensions as well. 

As I mentioned in the cost section, the gallon range you’ll typically see with hybrid units is between 40 and 80. While the amount you’ll need is completely dependent on how much hot water you and your family use, here are some loose guidelines based on the number of people in your home:

  • 1 person: 40 gallons 
  • 2 people: 50 gallons
  • 3 people: 65 gallons
  • 4 people: 70 gallons
  • 5+ people: 80 gallons

If you find yourself in need of more hot water after the installation, you can always buy a small, inexpensive tankless heater to supplement the hybrid unit. Read more in our article Choose What Size Water Heater You Need Like a Pro.

Hybrid water heater dimensions

Speaking is dimensions; hybrid water heaters are larger than traditional tank water heaters and require more space. This can present a challenge if installing inside the living space.

However, if your current water heater is installed in a designated mechanical room, basement, or garage, this space should be sufficiently provided, you have adequate height clearance.

The typical height of a hybrid water heater is 60″ – 74″ or 5 feet to 6.5 feet tall, plus plumbing stands, drain pans, plumbing clearances, and expansion tank installation.

Final Thoughts

There are several advantages to a heat pump water heater. However, as you’ve read, those advantages come at a price, in the form of increased installation and maintenance costs.

If you can service your hybrid heat pump water heater yourself, these annual savings can be realized in real cash. However, if you hire out the service to a technician at $50-$100 per hour, you’ll likely see no realized annual savings.

Ultimately, only you can decide what is right for you and your family. You’ll need to consider where you live and your ability to maintain the system to ultimately determine if a hybrid water heater is right for you.

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Hubert Miles

I've been conducting home inspections for 17 years. I'm a licensed Home Inspector, Certified Master Inspector (CMI), and FHA 203k Consultant. I started HomeInspectionInsider.com to help people better understand the home inspection process and answer questions about homeownership and home maintenance.

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