Heat Pump Water Heaters: Savings Potential in Minnesota


Executive Summary

Heat pump water heaters (HPWHs) take heat out of the air surrounding the unit and transfer it to water stored in its tank to be used for domestic hot water (DHW). The heat is transferred through a reverse refrigeration process. Because electricity is used to transfer heat instead of generate it, as done in a traditional electric resistance water heater, energy consumption can be substantially reduced. In recent years HPWHs have begun a resurgence into the residential water heating market. HPWHs were added to the U.S. Environmental Protection Agency ENERGY STAR® in 2008 and several major manufacturers have since developed models for the US residential market.

There are several climate-specific issues that may affect performance and energy savings in Minnesota’s heating-dominated climate: the type of space heating, the presence of air conditioning, and whether the installation location is actively or passively conditioned or completely unconditioned. These items will all affect water heating energy consumption as well as net whole house energy consumption when using a HPWH.

The project used existing research from field studies and laboratories across the country to make engineering calculations to determine the performance of HPWHs in MN. These calculations focused on the energy use necessary for typical Minnesota hot water usage patterns and the potential impacts of HPWHs on space conditioning for several different unit installation configurations. These calculations were used as the basis to develop two applications design to assist homeowners and utility program managers to make informed decisions about HPWH total energy savings and peak demand reduction.

HPWH energy and cost savings have been estimated for a wide range of operating conditions in Minnesota. The amount of hot water used, current water heating fuel source, and location of the water heater have the largest impact on the savings. A home that uses around 50 gallons of hot water per day and has an existing electric resistance water heater installed completely isolated from the conditioned space can expect to save a little over $215 a year, approximately a 6 year payback. The same water heater installed in the basement of the home or a mechanical room adjacent to conditioned space can expect a small penalty on the space heating energy use, reducing savings to around $175 per year. The savings application considers all of these parameters, input by the user and calculated for a site specific savings estimate.

Nationally, HPWHs are gaining a market presence. HPWHs are generally seen as the preferred water heating solution in many warm and humid climates. Recently, HPWHs have seen increased installations in colder climates in the Northeast and Northwest. Several electric cooperative, municipals, and utilities offer HPWH rebates in Minnesota, but to date very few have been installed. While further research is recommended to determine the specific savings and peak reduction potential and verify performance in actual installations, analysis indicates that HPWHs are an attractive option for many Minnesota homes with electric water heating. Cold climate installations that would require installing the HPWH directly in occupied, conditioned space with temperature control (i.e. a thermostat) should be avoided, but typical basement installations in Minnesota are good HPWH applications.


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Heat Pump Water Heaters: Savings Potential in Minnesota