A heat-pump water heater (HPWH) costs $2,200 to $3,800 installed vs $1,200 to $1,800 for a gas tank water heater. HPWHs cut water-heating energy by 55 to 70 percent vs gas tank. The IRA 25C credit covers 30 percent of installed cost up to $2,000. Stacked with utility rebates ($400 to $1,000), HPWH payback runs 4 to 5 years. Best single-appliance ROI in the ENERGY STAR catalog.
Energy use comparison
A typical gas tank water heater uses 270 to 380 therms per year. At $1.20 per therm, $325 to $456 annual.
An HPWH uses 1,400 to 1,900 kWh per year (replacing the gas). At 16 cents per kWh, $224 to $304 annual. Annual energy savings: $100 to $180.
Install considerations
HPWH needs 240V outlet (most homes have one near the panel). Tall ceiling space (typically 7+ feet) for the heat-pump unit on top of tank.
HPWH releases cold air during operation. Best located in basements, garages, or utility rooms with adequate air volume. Not ideal in small closets.
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