Are Heat Pump Water Heaters Worth It?

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Photo: Yuliya Taba / E+ / Getty Images
Soap foam in a sink
Photo: Yuliya Taba / E+ / Getty Images
Highlights
  • Home Value Rating: 5/5

  • A heat pump water heater is top-tier—hiring a pro is worth every penny here

  • It offers resale appeal, lower energy consumption costs, and appliance longevity.

  • The average return on investment (ROI) for a heat pump water heater is above 90%.

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A heat pump water heater has a return on investment (ROI) of 90% or more. At an average cost of between $1,200 and $3,500, you could see a return of $1,080 to $3,150 on your investment.

Heat pump water heaters are highly energy efficient and last longer than other types, increasing their value and providing higher ROIs than conventional units. Here are the primary factors determining the returns you can see and why.

Factors That Influence Heat Pump Water Heater Value

Determining the ROI for a water heater comes down to basics, including the cost to install and operate, energy efficiency, the ability to save money, and buyer appeal when selling your home. We can divide those factors down even further into several criteria. 

Energy Efficiency

The primary selling point for heat pump water heaters is their excellent energy efficiency. Their efficiency is because they use no energy as fuel. Instead, they only use electricity to transfer heat from the surrounding air to your water. Their highly efficient operation means they can cost up to three times less to operate than traditional water heaters, increasing their ROI despite their higher initial cost.

Several factors can affect the overall energy efficiency of your home's water heater. Where you put your water heater is one of those factors for all types. However, location is even more critical for heat pump water heaters. Placing the unit in a location that reaches below 40 degrees Fahrenheit will decrease the appliance's efficiency rating.

5 water heater sizes compared by household size, with a 40-gallon water heater supporting 2 to 3 people

Water Heater Size

The size of the heat pump water heater your home needs to accommodate your family's water usage is a strong pricing factor, which affects the percentage return on your investment, simply due to the increased price tag. Correctly matching the size of your home's water heater to your needs is an excellent way to minimize its carbon footprint and maximize ROI.

Heat Pump Water Heater Size (gallons)Average Cost
30$1,000–$1,600
40$1,300–$2,000
50$1,700–$2,500
60$1,900–$3,000
80$2,400–$4,000

Type

Most homeowners envision integrated heat pump water heaters. However, heat pump water heaters are available in various configurations at different price points.

  • Integrated water heaters include the tank and heat pump in a single unit, often located indoors. 

  • Split-system water heaters have two parts: the water tank, which is located indoors, and a separate heat pump, which is often outdoors. 

  • Hybrid heat pump water heaters include a heat pump and an electrical heating unit, which can act as a supplemental heater if the heat pump doesn't generate enough heat.

Type of Heat Pump Water HeaterAverage Cost
Integrated$1,000–$2,500
Split system$1,300–$3,500
Hybrid$1,500–$4,400

DIY vs. Hiring a Water Heater Pro

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Photo: demaerre / iStock / Getty Images

Heat pump water heaters can generate excellent returns on your investment. However, proper installation is mandatory, both for permitting purposes and to protect your ROI. A poorly or illegally installed heat pump water heater will destroy any hope of earning your money back when you sell the home and could reduce the model's efficiency or even pose a threat of danger. 

To protect your investment and maximize your returns, hire a local water heater installation expert for the job.

Less tangible than other ROI factors is the selling appeal of heat pump water heaters. While the tendency toward popularity does nothing to increase energy efficiency, if you're going to sell your home with a heat pump water heater, you can expect more buyer interest over a traditional water heater.

How to Estimate the Added Value of Installing a Heat Pump Water Heater

Estimating the value of installing a heat pump water heater in your home comes down to simple math. While heat pump water heaters cost more to purchase and install than traditional fuel heaters, the immediate and long-term savings potential is clear.

  • You'll spend up to twice the cost of a conventional water heater.

  • You'll experience energy-bill savings of up to $600 annually, quickly recouping the additional purchase costs. 

  • With an average lifespan of up to 13 years, heat pump water heaters last up to twice as long as traditional models. You'll have to purchase them less often. 

Cost to Install a Heat Pump Water Heater

The cost to install a heat pump water heater in your home ranges from $1,200 to $3,500 on average, though the price can go over $4,500 for larger units with special features. However, because of their long average lifespans, you could enjoy more than 13 years of energy-bill reductions, saving up to $600 annually, which quickly pushes their ROI value to over 100% in many cases. 

Is a Heat Pump Water Heater Worth It?

It's easy to see that purchasing and installing a heat pump water heater is well worth the investment in the long term. However, in the short term, you'll face a significantly larger installation bill to take advantage of the potential savings. Here are the pros and cons to help you decide if choosing a heat pump water heater is right for you.

ProsCons
Decreased carbon footprintCosts up to twice as much as other types
Immediate energy-bill savingsRequires reworking existing wiring or gas lines
Potential tax creditsCan be louder than traditional models
Longer lifespanRequires professional installation

How Angi Gets Its ROI Data

Home is the most important place on earth, which is why Angi has helped more than 150 million homeowners transform their houses into homes they adore. To help homeowners maximize the value of their investments, we gather ROI data from reputable sources, including industry reports, real estate studies, and interviews with market experts. We calculate the average resale value for projects by multiplying the ROI against the project’s average cost according to our cost data, which is sourced from thousands of real Angi customers. 

Want to help us improve our data? Send us a recent project quote or home appraisal value to costquotes@angi.com. Quotes and personal information will not be shared publicly.

Frequently Asked Questions

While heat pump water heaters are more expensive than gas-powered water heaters, the ROI is higher for heat pump units. Not only are heat pump water heaters more energy efficient, meaning immediate savings on your energy bill, but they also last longer than traditional gas versions, meaning you won't have to buy them as often.

Traditional gas or electric water heaters last an average of six to 11 years. However, with excellent maintenance, they can last up to 15 years. Heat pump water heaters, on the other hand, last an average of between 12 and 15 years and potentially longer with proper maintenance. In both cases, your home's water quality can be a determining factor regarding the lifespan of your water heater.

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