5 Reasons to Switch From A Regular Water Heater To A Heat Pump Water Heater

Understanding the Basics: Regular Water Heaters vs. Heat Pump Water Heaters

Here are five clear reasons homeowners and small businesses are making the switch:

When discussing water heating systems, it is essential to understand the fundamental differences between regular water heaters and heat pump water heaters. Traditional water heaters typically operate using electricity or gas to heat water directly through a heating element or burner, delivering hot water on demand or by maintaining it in a storage tank. In contrast, heat pump water heaters (HPWH) utilize a different mechanism, leveraging electricity to move heat rather than generating it directly. They harness energy from the surrounding air or ground, transferring it to heat the water.

Lower Energy Use = Lower Bills Heat Pump Water Heaters move heat rather than generate it, they are typically 2-3x more energy efficient1 than standard electric models. That efficiency translates into meaningful bill savings: ENERGY STAR estimates a household of four can save roughly $550 per year2 versus a standard electric tank, with savings payback in about three years for many homes. An April 2025 Rocky Mountain Institute analysis, found heat pump water heaters are a cost-effective upgrade3 for many California homeowners.

References

1 Save more with energy star certified heat pump water heaters. ENERGY STAR. (n.d.). https://www.energystar.gov/products/heat_pump_water_heaters/benefits-savings

2 Heat Pump Water Heaters. Energy.gov. (n.d.). https://www.energy.gov/energysaver/heat-pump-water-heaters

3 Shae, R., Atalla, L., Tang, J., & Golden, R. (2025, April 28). Heat pumps can lower energy bills for Californians Today. RMI. https://rmi.org/heat-pumps-can-lower-energy-bills-for-californians-today/#:~:text=We%20found%20that%20a%20typical,around%20190%2C000%20homes)%20or%20electric

4 Shae, R., Atalla, L., Tang, J., & Golden, R. (2025, April 28). Heat pumps can lower energy bills for Californians Today. Analysis Chart. RMI. https://rmi.org/heat-pumps-can-lower-energy-bills-for-californians-today/#:~:text=We%20found%20that%20a%20typical,around%20190%2C000%20homes)%20or%20electric

5 Energy Efficient Home Improvement Credit. Internal Revenue Service. (n.d.). https://www.irs.gov/credits-deductions/energy-efficient-home-improvement-credit

6 Heat Pump Water Heaters Tax Credit. ENERGY STAR. (n.d.-a). https://www.energystar.gov/about/federal-tax-credits/heat-pump-water-heaters

7 Heat Pump Water Heater Guide. (n.d.). https://www.energystar.gov/sites/default/files/2024-07/ENERGY%20STAR%20Heat%20Pump%20Water%20Heater%20Technical%20Guide%20508C.pdf

8 Heat Pump Water Heater Guide. (n.d.). https://www.energystar.gov/sites/default/files/2024-07/ENERGY%20STAR%20Heat%20Pump%20Water%20Heater%20Technical%20Guide%20508C.pdf

9 Choose an energy star® heat pump water ... (n.d.-a). https://www.energystar.gov/sites/default/files/tools/HPWH_SalesGuide_May2021.pdf

Rocky Mountain Institute Analysis chart annual energy bill savings for single family homes upgrading to heat pumps in California 4

Stackable  Incentives, Federal Tax Credits + Local Rebates Heat Pump Water Heaters  qualify for the Energy Efficient Home Improvement credit (25C)5 a federal tax credit equal to 30% of project cost, up to $2,000 per year6, for qualifying heat pump water heaters. Many utilities and state programs that add their own rebates, further trimming the upfront price. Check the IRS guidance for eligibility and annual limits, and your local utility's rebate page for stackable offers.

Smart Controls for Everyday Convenience Today's heat pump water heaters arrive with intelligent controls and app connectivity. These features allow you to:

Set schedules for when you need fast recovery (weekend guests) or super-efficient operation (weekday routines).

Switch to Vacation Mode7 to cut standby usage while you're away.

Track energy use and receive maintenance reminders from your phone.

Cleaner, Safer, and Electrification Ready Heat Pump Water Heaters run on electricity and don't burn gas in the home. That means no toxic combustion exhaust gases, such as carbon monoxide8 or venting requirements, reducing risks tied to gas leaks or back-drafting. Electrifying water heating also positions your home to benefit from a cleaner electric grid over time.

Built-In Dehumidification Benefits9 Since Heat Pump Water Heaters draw heat from the surrounding air, they naturally dehumidify the space . Installing one in a utility room, garage, or basement can reduce moisture, help prevent odors, protect stored items, and make these areas more comfortable. 

Ready to explore your options?

Custom Seasons Heating Air Conditioning And Plumbing Inc can evaluate your space, estimate energy savings, and help you apply for any available incentives. Give us a call (818)386-8440 or email info@csacplumbinginc.com