Out of approximately 50 million water heaters in the country, Nyle Corp. president Don Lewis estimates that less than 10,000 are part of a product category known as heat pump water heaters. That's less than half of 1% of the market, but it's an area that Lewis and other supporters expect -- and hope -- will grow in the coming years.

"When these products were first introduced in the 1970s, there was a big rush for them, and even large heating and cooling manufacturers started making them," Lewis says. "Then everything stopped because of technical problems. They were often difficult to install, and after one cold shower too many, homeowners stopped using them and went back to traditional water heating. Since then, no one's really marketed heat pump water heaters, and people really don't understand them."

However, as heat pump water heaters are written into the American Recovery and Reinvestment Act of 2009 as an equipment upgrade that can qualify for a tax credit, the industry expects to see increased interest in the category. Prior to the introduction of the stimulus package, Nyle Corp. has licensed with manufacturer North Road Technologies to bring a new heat pump water heater, the Geyser, to market this spring.


Heat Pump Hot Water 101
Heat pump water heaters are actually add-on components that work with existing storage water heaters. According to manufacturer E-Tech, "a heat pump water heater operates like your home heat pump air conditioner, but instead of heating and cooling air, it heats water." Whereas standard water heaters convert fuel into heat, which is then transferred to water, heat pump water heaters harvest heat from the air surrounding the unit and transfer it directly to the water. The water courses through the heat pump water heater where it is initially warmed, and then flows back into the storage tank. By not having to create heat first, less fuel is needed to run the water heater, which translates into impressive energy cost savings. How much? More than what a standard storage or tankless water heater could provide, some say. Current stimulus package legislation says that, in order to be eligible for a tax credit, water heaters must have an energy factor of 0.82 or a thermal efficiency of 90%. The requirement for heat pump water heaters is an energy factor of 2.0 -- almost 2.5 times higher than standard water heaters. E-Tech says that this heightened efficiency translates into utility cost savings as high as 80%. Lewis agrees, but adds that the savings is more often in the order of 50% to 60%

Additionally, by pulling heat from surrounding air, heat pump water heaters cool and dehumidify the areas in which they operate, reducing the need for additional conditioning in those areas.

"As a homeowner with a heat pump water heater, for every kilowatt hour (kWh) you buy, you get the equivalent of 3 kWh of heat in the tank," Lewis says.

Rob Montenegro, vice president of sales for North Road Technologies agrees, adding that with the availability of tax credits, users can expect a return on investment in about two years, compared with six or seven years with a high-efficiency tankless water heater.

Improved Performance
"The market share for heat pump water heaters today is extremely small," Montenegro says, "but with the tax credit opportunities, I believe growth in the market will be exponential." In addition to the high efficiency and quick payback, he says that ease of installation will help this growth take place.

"Original models for this product category were 220 volt, and unless you're an electrician, you won't put in a 220 unit on your own," Montenegro says. "That took out most remodelers or the handyman from being able to install the units. Now, they're very easy to install from a piping and electricity standpoint." Additionally, an overhaul of the circuitry, as well as installer training and certification make heat pump water heaters more reliable, manufacturers say. Altogether the segment has become a sales opportunity for remodelers, especially in cases where clients are interested in both saving energy and saving money.