Best Heat Pump Water Heaters of 2025 - Consumer Reports

Heat pump water heaters have been around for decades, but it’s only recently that they’ve emerged as a go-to for energy efficiency. More households are opting for heat pump water heaters than ever before, in part, thanks to incentives from federal and state governments. Brands are expanding their product offerings, too.   

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Heat pump water heaters are two to three times more energy-efficient than conventional electric water heaters, according to the Department of Energy. Heat pump water heaters do not generate heat directly, unlike conventional water heaters. Instead, they take heat from the air, raise the temperature of their refrigerant using a compressor, and then transfer the heat from the air and refrigerant to the water inside the storage tank. It’s exactly the way refrigerators and air conditioners work, but in reverse. That process means that you’ll use far less electricity to heat a tank of water.

These models cost more up front than traditional water heaters. The units we tested range in price from about $1,500 to more than $5,000 (with most models costing $2,500 or less). If you have sticker shock, we get it. You can get a conventional electric water heater for under $1,000. 

But if you have an electric water heater that needs replacing, switching to a heat pump version could offer you significant savings over time. The EPA’s Energy Star program estimates that a family of four could save more than $500 per year with a heat pump water heater that has an Energy Star rating, compared with a standard electric water heater. Those savings would offset the higher cost of the heat pump water heater in as little as three years. 

And there are tax incentives to take advantage of, too. You may qualify for a federal tax credit of up to $2,000 to help cover total project costs, including the cost of the water heater and installation. Many states and even utility companies are also offering rebates as an incentive to choose a heat pump unit. Plus, heat pump water heaters tend to last a bit longer. While a traditional water heater has a lifespan of about 10 to 12 years, a heat pump water heater is expected to last 13 to 15 years. 

Lastly, when you’re considering whether it’s worth it to go with a heat pump, part of the equation is considering what you currently have. If you have a traditional electric water heater, more than likely you’ll be able to convert easily to a heat pump model because both water heaters have the same electrical requirement of a dedicated 240-volt line. 

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Switching from a gas model to a heat pump is also a possibility, but that may require electrical upgrades, which can eat into any potential savings. There are also heat pump models that run on 120 volts and can plug right into existing wiring. A 120-volt model may be a good alternative if you’re looking to switch from a gas water heater—as long as you’re aware that the lower-voltage model may take longer to heat a tank full of water.  

Because of the way heat pump water heaters work, by moving air instead of heating water directly, they have a few distinct characteristics to be aware of. 

They need extra space. Heat pump water heaters should be installed in a large enough room to allow for proper venting. Specifications for just how large can be found in the water heater’s installation guide. In most cases, they can be installed where you would typically place a conventional water heater, like a basement or garage. For instance, A.O. Smith, which makes two of the recommended models from our tests, says its hybrid electric heat pump water heaters should be installed in a room that is at least 450 cubic feet. Some models can also connect to ductwork to use air from a different area, allowing them to be installed in smaller rooms. 

Heat pumps like warm air (but they still work in winter). Keep in mind that these water heaters operate more efficiently in warmer spaces—which makes perfect sense because they utilize the heat in the air to warm up the water in the tank. So installing a heat pump water heater in a room with a furnace or boiler, where there’s excess heat, would help increase its efficiency. These water heaters will work in a room with a minimum air temperature of 40° F. But if you have a hybrid model and the room with the water heater gets too cold for the heat pump to work, the heating elements will kick in. 

They can be tall. Many models are taller than a typical storage tank water heater. That’s because you have a water heater in two parts: a heat pump and a water storage tank. So the all-in-one models, where the heat pump sits on top of the storage tank, gives it extra height. There are also split-type models, such as the Sanden that came out on top in our ratings. The Sanden has an indoor storage tank and a compressor that can be placed outdoors.

You’ll need to address condensation. Heat pump water heaters produce condensation as part of the process of transferring heat because they cool the air of the room that they’re in. The water that’s created needs to be routed to a drain, or you’ll need to install a condensate pump to remove the water. The amount of water produced could be significant: up to a couple of gallons per day, depending on the humidity and your hot water use. The condensate that’s collected is just water, though, so you can dump it down any drain or set it aside for your plants.

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