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Tankless vs. Hybrid Heat Pump Water Heaters: Which is Better for Phoenix Homes?

Should you buy a tankless water heater or a hybrid heat pump water heater?

Well, that choice depends on the type of energy source you have available: gas or electric.

If you have gas, a tankless water heater makes more sense. Even though a hybrid heat pump is technically more energy efficient, gas is generally cheaper than electricity in the Phoenix area. So a tankless water heater heater will still cost less to run.

Plus, tankless has some additional advantages. Check them out here: Storage Tank vs. Tankless Water Heaters

If you want to use electricity for your water heater, a hybrid heat pump is your choice. To show you why, let’s first discuss why an electric tankless water heater isn’t worth it. Then we’ll go over why a hybrid heat pump water heater is better.

Why you should avoid electric tankless water heaters

Every electric tankless water heater we’ve found fails in 2 big ways:

  • Operating costs-To run a whole-home electric tankless water heater you may need three to four 50-amp circuits. That’s enough amperage to run 3-4 air conditioners at the same time!
  • Flow rates (gallons of hot water provided per minute or “GPM”)-Electric water heaters have very low flow rates. That means they can rarely provide enough hot water for your home.

Find out more about these problems in our article Tankless Water Heaters: Gas vs. Electric

So now that you know why electric tankless aren’t a good choice, your options are limited to tank style electric water heaters. And the best of those are hybrid heat pump water heaters. Here’s why…

Why hybrid heat pump water heaters are super efficient

Hybrid water heaters move heat instead of creating it.

A hybrid heat pump water heater absorbs heat from the air surrounding it and transfers it to the water, which it then stores in a large tank.

This is the same technology your refrigerator uses. A refrigerator sucks heat out of the refrigerator and deposits it outside the refrigerator, in your kitchen. The heat pump on the water heater does the same thing, but in reverse. It removes the heat outside of it and deposits it inside the water.

And since moving heat is much easier (requires less energy) than creating it, hybrid heat pumps can be more than twice as efficient as standard and tankless electric water heaters.

More benefits of hybrid heat pump water heaters

In addition to being a super energy efficient method of heating your home’s water, hybrid heat pump water heaters have some other great benefits.

Can help cool your home/garage/basement
Since the hybrid water heater is taking heat from the air around it, it’s cooling the room it’s in. This can actually save you money on AC costs in the summer if the water heater is in the home.

Are eligible for tax credits
You can get up to a $300 tax credit on the installation of a qualified hybrid heat pump water heater. Here’s some more information.

Don’t require as much retrofitting
Tankless water heaters often require upgraded gas lines, new venting and upgraded electrical service. Replacing an old water heater with a hybrid heat pump is usually more straightforward since the overall footprint is similar to your old water heater.

Some downsides

Like everything else in life, there are still tradeoffs with a hybrid heat pump water heater.

Costs more than traditional water heaters
A hybrid heat pump water heater is more expensive than regular electric water heaters. However, payback on the price difference can be as little as 4 years with the federal tax credits.

Requires more space
Hybrid heat pump water heaters take up more space than tankless water heaters. They are generally slightly taller than your old water heater. Also, they need about 1,000 cubic feet of air around it to work properly. So if your water heater is currently stuffed in a small closet, you’ll have to move it.

Needs to have its air filter replaced
A heat pump water heater has a small air filter that will need to be regularly replaced to keep it working efficiently.

Requires a condensate drain
As it heats your water, a hybrid heat pump water heater collects moisture (called condensate) that must best be drained out of your home.

Want to get a new water heater installed in your home?

Schedule an in-home consultation. George Brazil has been serving the plumbing and electrical needs of Phoenix-area homes since 1955.

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