Heat pump water heaters are a great alternative to traditional water heaters. But how much does a heat pump water heat cost? Compared to conventional water heaters, they cost more on average.
However, heat pump systems are drastically more efficient than standard gas or electric water heaters, producing impressive savings over time. We spent countless hours getting real heat pump water heater quotes so we could give you the most accurate and up-to-date cost data. This guide explores common costs associated with heat pump water heaters to provide you an idea of what to expect from your installation.
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- Most homeowners pay around $3,600 to install a heat pump water heater.
- The cost of a heat pump water heater is highly dependent on the size and efficiency of the system.
- While DIYing a heat pump water heater installation is doable, this project is usually best left to the professionals.
How Much Does a Heat Pump Water Heater Cost?
A heat pump water heater usually costs around $3,600, although costs may dip as low as $1,200 or as high as $6,000 or more. However, it’s important to note that the exact cost of your project hinges entirely on factors specific to your installation, including the system size, installation difficulty, and system efficiency.
| Low | Average | High |
| $1,200 | $3,600 | $6,000+ |
How Do Heat Pump Water Heater Costs Differ By Size?
The size of an electric heat pump water heater plays a critical role in determining the final cost of the system. The larger the unit’s capacity, the more you’ll pay for your setup. The chart below offers a quick peek into common costs based on size.
| System Size | Average Cost |
| 40 gallons | $1,200 – $2,000 |
| 50 gallons | $1,500 – $2,800 |
| 65 gallons | $1,800 – $3,000 |
| 80 gallons | $2,500 – $6,000 |
40 Gallons
A 40-gallon heat pump water heater is best suited to small homes with one or two people. These units can only adequately supply enough water for a few showers before they need more time to heat water, so they’re not ideal for larger homes.
On average, these systems cost between $1,200 and $2,000.
50 Gallons
A 50-gallon heat pump water heater works well in smaller homes with two to three people. Like the 40-gallon tank, it may run out of hot water after around 20 minutes of continuous showering, so it’s best suited to smaller homes or households where residents don’t regularly take consecutive showers.
These systems usually cost between $1,500 and $2,800.
65 Gallons
A 65-gallon tank takes things a step up, featuring a larger capacity and the ability to provide more hot water for more toasty rinses. It can supply plenty of hot water for midsize homes, as it has enough capacity to deliver up to 30 minutes of hot water for showering.
A 65-gallon system usually costs between $1,800 and $3,000.
80 Gallons
The 80-gallon tank is the largest of the bunch and is usually best suited to midsize to large homes with higher hot water demands. These systems can deliver 40 minutes or more of hot water for showering, making them ideal for more than a few individuals.
These systems are pricier, as most homeowners pay $2,500 to $6,000 or more.
How Does Efficiency Affect Heat Pump Water Heater Pricing?
The energy efficiency of a heat pump is a critical factor when considering the overall cost of the system. The U.S. Department of Energy measures a water heater’s efficiency using the uniform energy factor (UEF). The higher the number, the more efficient the unit. Most heat pump water heaters have a UEF rating of 2.75 to 3.5. This is substantially higher than the typical UEF rating of a conventional natural gas or electric water heater, which usually falls between 0.65 and 0.95.
More-efficient heat pump water heaters are usually pricier, whereas their less efficient counterparts are generally less expensive but have higher operating costs. However, since the cost of the system is highly dependent on its size, smaller models with high efficiencies are still usually more affordable than larger models with lower efficiency ratings. Here are the average costs based on the efficiency of the heat pump water heater:
| Efficiency (UEF) | Cost Range |
| 2.75 | $1,200 – $2,000 |
| 3.0 | $2,000 – $3,700 |
| 3.25 | $2,500 – $4,800 |
| 3.5 | $3,000 – $6,000 |
Wondering how heat pumps work? This video explains the principles of heat pumps, which work the same whether they’re heating the air or water in your home.
Which Factors Impact Heat Pump Water Heater Cost Estimates?
The cost of your heat pump water heater and the subsequent installation hinges on an array of factors, from labor costs to permitting. Here are a few key factors that contribute to the cost of your project.
Labor
The cost of labor is one of the most important factors playing into the cost of a home-related project. Of course, if you DIY the project, this factor isn’t anything you need to worry about, as it’s your own time.
However, if you plan to hire a professional to complete the project for you, remember to factor in labor costs. Labor costs vary from state to state and even at the county level. Typically, heat pump water heater installation costs range from $1,000 to $3,000,or about equal to the cost of the water heater.
You can always get quotes from a couple of local contractors to help you prepare and budget for your project. Still, it’s important to remember that unexpected complications can require more time and labor, adding to the cost of your project. So, to be on the safe side, ensure you leave some wiggle room in your budget.
Removal
Removing an old water heater setup will add to the cost of your project. If you have your contractor remove, haul away, and dispose of your old water heater, you can expect to pay more overall for the project. Removal costs vary depending on your location and contractor. Some may remove it for free, but it usually costs $100 to $300 for removal.
However, if you’re starting from scratch and don’t have an existing water heater, this factor won’t impact you.
Permitting
Most areas require homeowners to obtain a permit before installing a new water heater or HVAC-related system. Since a heat pump water heater ties into both categories, you’ll likely need to obtain specific permits to complete the project.
If you hire a contractor, they can tell you more about the permits you’ll need before starting the project. In some cases, they might even include this cost in their bid and handle this part of the project for you. Permit costs vary depending on where you live but typically range from $50 to $400.
If you’re DIYing the project, talk to your local building authority for more information about necessary permits.
Location
Your location can play a key role in the cost of your heat pump water heater and associated installation costs. For example, in areas with high demand or remote areas, you might pay more for installing these systems.
On top of that, labor costs vary drastically based on living costs, so some areas have higher labor costs than others. For example, if you live in the heart of a city with a high living cost, you can expect to pay more for your project. In contrast, if you live in a rural area with a lower cost of living, you’ll likely pay less for your installation.
Installation Difficulty
The difficulty of the installation plays a critical role in determining the final cost of your heat pump water heater project cost. If you choose to DIY the installation, this factor isn’t as much of a concern, but if you hire a contractor to handle the project, it’s a pivotal factor that impacts the price.
The more complex the installation is, the more you can expect to pay for your project. More complicated installations require more time and labor to complete the task, resulting in higher costs overall. For example, if the job only takes one hour, it will cost less than a job that takes three hours.
In contrast, simple installations without unexpected delays or complications are usually more affordable. Unfortunately, it can be hard to determine the installation difficulty level until you begin, so ensure you budget for some variation in this area.
Of course, certain factors will create obvious complications. For example, if the space you’re having the system installed in is hard to reach or not easily accessible, you can expect to pay more for the installation, as it will likely take your contractor more time to complete the task.
System Brand
As with many products, the cost of a heat pump water heater varies based on the brand you choose. Some brands charge more for their products, whereas others feature more affordable prices. Generally, the more well-known brands charge more, while the unfamiliar brand names offer less expensive equipment. For example, you can find A.O. Smith, Ecosmart, and Rheem Proterra or Performance Platinum heat pump water heaters for $500 to $2,000, depending on size, efficiency, and type. On the more expensive end of the spectrum, you can find Goodman, Daikin, Bosch, and Bradford White heat pump water heaters available for $1,700 to $4,000.
What Are the Benefits of a Heat Pump Water Heater?
Heat pump water heaters have a clear edge over traditional gas and electric water heaters. Below are a few of the main benefits these systems have to offer.
Better Efficiency, Lower Costs
Heat pump water heaters are comparatively more efficient than their traditional counterparts. They feature a UEF rating of 2.5 to 3.75, which is substantially higher than the average of 0.65 to 0.95 standard with traditional gas or electric water heaters.
The higher efficiency rating translates to better savings over time. In some cases, you might save $1,000 or more in energy costs associated with operating your water heater each year. This adds up quickly over time, reducing your electricity bill every month and making for an excellent return on your investment. Of course, your cost savings will vary based on factors specific to you.
Environmentally Friendly
Heat pump water heaters are more environmentally friendly than standard gas or electric water heaters. They consume far less energy than a standard electric water heater, helping to drastically reduce your household’s greenhouse gas emissions.
On top of that, they don’t produce emissions like a gas water heater does, further sealing a place among the more environmentally friendly water heating options. If you’re looking for a solution that minimizes your home’s carbon footprint, heat pump water heaters are a worthwhile consideration.
Lengthy Lifespan
Heat pump water heaters offer a solid lifespan that often surpasses the average of a standard water heater. For example, a traditional water heater lasts eight to 12 years before a replacement is necessary.
In contrast, a heat pump water heater can last up to 15 years or more. Of course, the lifespan you’ll get out of your system hinges entirely on your usage, the system’s quality, and how well you maintain it. Look for systems with competitive warranties.
Tax Rebates and Incentives
While the upfront costs associated with heat pump water heaters are steep, there are ways to minimize the total cost. One of these methods is to take advantage of tax credits available to you.
If you purchase a heat pump water heater with the ENERGY STAR certification, you can claim up to 30% of your project’s total cost on your next tax return. The maximum amount credited is capped at $2,000, but this is still a considerable chunk of the total cost.
Professional vs. DIY Heat Pump Water Heater Installation
If you have extensive DIY experience, installing a heat pump water heater might be an absolute breeze for you. However, if DIY home projects aren’t up your alley, this project is best left to the professionals.
Doing a Heat Pump Water Heater Installation Yourself
Installing a heat pump water heater yourself is entirely doable, providing you have extensive DIY experience. It can save you a significant amount of money in installation costs, making it a more budget-friendly venture.
However, you’ll need to know the ins and outs of HVAC and plumbing projects, both of which can be complicated. If you don’t have this know-how, it’s best to leave this project to the professionals.
Hiring a Professional for Heat Pump Water Heater Installation
If the prospect of installing a heat pump water heater yourself sounds daunting, you’re not alone. Many homeowners choose to outsource this installation process to save themselves time and the headache of figuring out the project alone. Plus, when you hire a professional, you can rest assured knowing your system is installed correctly.
Here’s how to find a local professional to install your heat pump water heater:
- Use the internet: Do a quick internet search to find local providers near you. Read through reviews on the top options to select a few highly-rated providers.
- Ask friends: If any of your neighbors, friends, or family members have a heat pump water heater, ask them about their provider recommendations. Use the information you collect to research your options and select a few highly rated picks.
- Get estimates: Contact your top picks and request a personalized estimate for your installation project.
- Compare your options: Use the estimates each provider gives you to compare your options to determine which best fits your budget and unique needs.
- Choose a provider: Once you finish comparing your options, it’s time to choose a provider. Select the option that best fits your needs and contact that provider to schedule an installation appointment.
So, Is a Heat Pump Water Heater Worth It?
A heat pump water heater can be an excellent investment for homeowners seeking a more cost-effective solution to heat their water. These hybrid water heater systems reduce home energy bills and emissions over conventional hot water systems, making them a worthwhile pick for many homeowners.
However, it’s important to note that they may not work in all situations. For example, they’re best suited to locations that dip no lower than 40 degrees Fahrenheit throughout the year, as they don’t work well at lower temperatures. Also, if you have relatively low electricity costs, a heat pump water heater may not lower your utility bills enough to offset the upfront costs.
Ultimately, the decision falls to you. If you’re due for a new water heater and live in a warm climate, a heat pump water heater might be an excellent solution. It all comes down to the specifics of your situation.
Related: What is the Cheapest Way to Heat Water for Your Home?
FAQs About Heat Pump Water Heaters
What are the disadvantages of a heat pump water heater?
The primary disadvantage of a heat pump water heater is its steep upfront cost. Compared to non-hybrid appliances, these units are pricey, which can be a barrier for some homeowners.
Are heat pump water heaters cost-effective?
Heat pump water heaters can be an incredibly cost-effective solution for many homeowners. While they cost more upfront, the return on your investment is worthwhile, as these systems are substantially more efficient than gas or electric water heaters.
What is the life expectancy of a heat pump water heater?
Heat pump water heaters usually last between 10 and 15 years, although their lifespan hinges entirely on usage, quality, and maintenance.
How much does it cost to run a heat pump heater annually?
The cost of operating a heat pump water heater hinges on the size you purchase. For example, a standard 50-gallon heat pump water heater would cost around $140 annually to operate.
