Heat Pump
Hot Water Heater

Water heating is typically the second-largest energy expense in a home; it can cost the average household approximately $400–$600 each year. Properly maintaining your water heater and choosing high-efficiency equipment can help you save energy, improve the comfort of your home, and contribute to a cleaner environment.

What are the benefits?

  • More energy efficient than conventional water heaters, resulting in lower utility bills
  • Lower operating costs than conventional water heaters
  • Produce fewer greenhouse gas emissions, contributing to a cleaner environment
  • Total cost (unit plus installation) is currently about twice that of conventional water heaters. However, lower operating costs can offset the higher purchase price in just a few years.
  • Extremely cost-effective way to reduce the greenhouse gas footprint of a home.

Is this right for my home?

  • Location needs to have at least 1,000 cu ft. of air space around the heater; heat pump unit is on top and so required floor to ceiling clearance is higher than conventional models.
  • Hot water heat pumps are best in a location where the temperature remains 40˚ – 90˚F (4.4 – 32.2˚C), but most can function like a traditional electric water heater if conditions get colder.
  • Operation of the unit both slightly cools and helps dehumidify the space it is in.
  • Installation is comparable to traditional electric storage hot water heaters; a drain for condensate is required.

Want to Learn More?

See Homeowner Success Stories and check out our most recent webinar recordings.

What will it look like
in my home?

Heat pump water heaters use electricity to move heat from one place to another instead of generating heat directly. This makes their operation far more energy efficient than conventional resistance electric heaters or those fired by natural gas, oil, or propane. Heat from the air is transferred to water in a tank, which is heated to 130 to 135 F. This is the process of a refrigerator, in reverse.

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Incentives and Rebates

Heat Pump Hot Water Heater (HPHWH) rebates vary by utility. See the chart below to discover the utility and state offered incentives and rebates for air source heat pump projects.

Inflation Reduction Act:
The Inflation Reduction Act (IRA) empowers American households to save thousands of dollars on the upfront costs of electric machines, like heat pump water heaters. In turn, those machines will save families an average of $1,800 per year on their energy bills. (Source: Rewiring America)

Download a simple PDF list of tax credits and point-of-sale rebates, newly offered through the Inflation Reduction Act (IRA).

See Rewiring America’s IRA calculator to see how much money you can get with the Inflation Reduction Act.

Federal Tax Credit

Don’t forget to take your IRS tax credit for heat pump hot water heaters. ENERGY STAR heat pumps water heaters installed before 12/31/2022 qualify for a $300 credit. Installations completed as of 2023 will be eligible for a higher tax credit. Learn more about these credits on the Department of Energy’s website.

Disclaimer: This does not constitute professional tax advice or other professional financial guidance and may be subject to change. It should not be used as the only source of information when making purchasing decisions, investment decisions, tax decisions, or when executing other binding agreements. Consult a tax professional for questions about how to take advantage of this tax credit.

Water Heating Incentives

Financing & Loan

This document provides information regarding financing options through NYSERDA for homeowners who are looking to install heat pumps and energy efficiency upgrades in their homes. It includes information on:

  • On-Bill Recovery Loan
  • Smart Energy Loan
  • Renewable Energy Tax Bridge Loan

It also provides information on each loan’s interest rates and the general loan approval criteria for NYSERDA loans.

Residential Loan Information

Our EnergySmart Homes Partner Contractors offer additional financing options.

Contractor Loan Information

Work With A Participating Installer

To access the utility rebates and state incentives you must use a Con Ed, NYSEG or NYSERDA participating installer. All of the EnergySmart Homes partner installers participate in these programs, and can assist you with the paperwork to acquire these incentives.

The EnergySmart Homes Installer Partners will find your relevant state and utility rebates using calculations specific to your building and the proposed equipment. Every EnergySmart Homes partner installer has the necessary accreditation, software, and experience to accurately inform you of your true bottom line (included in your proposal). The EnergySmart Homes Team is here to help!

For More Information

Contact Lauren Brois


914-242-4725 x122

Email inquires to