Install a hybrid hot water heater, otherwise known as a heat pump hot water heater. Make sure to get a model with at least a 10-year warranty, and don’t forget to check state and federal rebates/tax credits for your water heater. They can be worth more than 50% of the sticker price.

Hybrid Water Heater

All the Facts:

Hybrid water heaters are hybrids between heat pump technology and standard electric water heating technology. The unit is equipped with both technologies. Standard heating, heat pump heating, or both types of heating can be called on at any given time.

Standard electrics use resistance heating. Electricity is converted into heat and then deposited directly into the water. The theoretical maximum efficiency achievable from a standard electric water heater is 1 also know as 100% efficiency. Standard water heaters never reach that bar due to a variety of different energy losses. According the the Department of Energy the three following losses account for reductions in the energy factor (EF)

  • Recovery efficiency – how efficiently the heat from the energy source is transferred to the water
  • Standby losses – the percentage of heat loss per hour from the stored water compared to the heat content of the water (water heaters with storage tanks)
  • Cycling losses – the loss of heat as the water circulates through a water heater tank, and/or inlet and outlet pipes.

A good standard electric water heater’s EF is around 0.95. That doesn’t come close to the efficiency of a hybrid water heater. Hybrids use heat pump technology to transfer heat from the air outside of the tank to the water inside the tank. Transferring heat from the air takes much less electricity leading to an energy factor of 3.5 for the unit pictured above. That’s right. Heat pumps are three and a half times more efficient than standard electric water heaters. That efficiency directly translates into energy costs. On the left side you have the energy guide for a heat pump unit, on the right side you have a standard electric. As you can see, the difference in estimated operating cost is $404 per year even though both of the guides describe water heaters from the same manufacturer with 50 gallon tanks.

The first generation of hybrids were a great idea, but defects in manufacturing often times caused headaches. Check out the abysmal reviews on Amazon for GE’s first gen model. The good news is that current generation models (including GE’s) sold at home improvement stores are better … much, much better. Still, it makes sense to get one with at least a decade warranty and make sure you are in the warranty service area before you purchase. This Rheem model is from the current generation, comes with a 10-year warranty, and is eligible for tax credits. The Rheem wifi unit appears to be unreliable and have limited functionality, so if you are interested in wi-fi capability, on/off scheduling, and additional remote controlled features, check out this controller that is simple enough to be diy installed.

One more strength of the hybrid heater is the same as it would be for any tank style unit. Hybrids work very well in conjunction with solar panels. Solar panels only provide electricity when the sun is shining. More and more utilities are moving to time-of-use pricing. During peak hours, electricity becomes more expensive than at times of low electricity consumption. Peak hours generally occur from 5 to 9 in the evening. When a home owner has a tank type water heater, solar panel electricity can heat water in the tank during the day providing a water based battery for solar energy. The final step is to place the water heater on a timer that turns the water heater off each day during peak pricing hours.

The right technology (hybrid water heating), paired with clean energy (solar), and a simple timer can eliminate the energy costs for one of the home’s biggest energy hogs.

More questions about home energy efficiency do’s and don’ts? Check out this page where I list all of my recommendations for home efficiency upgrades. Finally, avoid mistakes covered in the stuff-to-skip section. A little bit of reading could save you thousands of dollars.