It seems that in recent years, all anyone can talk about is water heating. These conversations have centered on heat pump technology, tankless water heating options, and determining which technology is best suited to different applications. The concern I frequently hear from partners is that there is limited information available about these technologies, particularly regarding their performance in various applications. However, this assessment is simply untrue. As our partners are debating the differences and benefits of each technology, we would like to provide some insight and resources to help along the way.
Heat Pump Water Heaters
How do they work?
The most straightforward explanation of how a heat pump water heater works is to think about it like a refrigerator, but in reverse. Refrigerators transfer warm air from inside the refrigerator box and exhausts it to the outside. A heat pump water heater draws warm air from the surrounding space and transfers it inside the tank to warm the water. For this reason, heat pump water heaters operate more efficiently when installed in a warmer room, such as a furnace room.
Some important considerations when evaluating a heat pump water heater include that they are generally more expensive than conventional storage water heaters. They can also be more costly to install. On the other hand, heat pump water heaters typically have lower operating costs over their lifespan, which can offset the higher purchasing and installation costs.
Overall benefits:
When considering the benefits of heat pump water heaters, several advantages are notable. However, above all other benefits, energy efficiency stands out. When compared to electric resistance water heaters, there is a clear difference in efficiency and performance.
In addition to the efficiency realized through heat pump technology, there is an operational advantage over tankless storage units. Heat pumps can be programmed to help the end user avoid peak electricity pricing. In an effort to stabilize high energy demand during the late afternoon and early evening hours, utilities often increase prices during these times, a practice known as peak electricity pricing. If users can adjust their electricity use during those times, the result is often considerable cost savings.
Heat pump water heaters can assist with these efforts by increasing their storage temperature in the hours leading up to peak pricing windows (usually between 4 PM and 9 PM each day). The unit then shuts off during the peak pricing window, resulting in no electricity being used during that time. The unit maintains a minimal, pre-set temperature inside the tank, and access to hot water is not compromised.
Tankless Water Heaters
How do they work?
If you use the terms "tankless water heater" or "demand-type water heater," you are referring to the same thing. The two terms can be used interchangeably.
A tankless water heater provides instant water heating when needed, which eliminates the need for a storage tank. When a faucet is turned on, cold water is then passed through a heat exchanger to heat the water, supplying hot water where needed in a building or facility.
That is not to say the hot water supply is endless. A typical tankless unit supplies roughly 2-5 gallons of hot water per minute. Therefore, if a number of faucets are running simultaneously, the supply can be limited. In some applications, it is common to install multiple tankless water heaters or dedicate them to specific purposes. For example, one is specifically dedicated to faucets, and another is specifically dedicated to appliances.
Like heat pump water heaters, tankless water heaters can carry a higher purchase price than conventional storage water heaters. However, this cost is often offset by the lower operating and energy costs.
Overall Benefits
Tankless water heating technology has come a very long way in terms of efficiency. Newer tankless water heaters are 24% to 34% more energy efficient than conventional storage tank water heaters in applications where 41 gallons or fewer are used per day. They are 8% to 14% more efficient in applications where 86 gallons or more of hot water are used per day. Much of this efficiency is due to the fact that tankless units do not have standby losses associated with conventional storage units.
Tankless water heaters have a longer expected useful life than conventional storage units. On average, they have a life expectancy of 20 years or more, depending on maintenance, while conventional storage units have a life expectancy of around 10 to 15 years.
The Choice is Yours!
Choosing between a heat pump water heater and a tankless water heater ultimately comes down to the unique needs of each home or facility. Both technologies offer clear improvements over conventional storage water heaters, whether through higher energy efficiency, lower operating costs, or longer service life. Heat pump water heaters excel in applications where maximizing efficiency and leveraging time-of-use electricity pricing is a priority, while tankless systems shine in delivering hot water on demand with minimal standby losses. By understanding how each system works and weighing factors such as installation cost, hot water demand, available space, and energy goals, users can make an informed decision that best suits their situation.
