Heat Pump Water Heater Market Acceleration Guide
ENERGY STAR has developed this Guide with the input of experienced program designers and implementers, and leading water heating experts, including manufacturers, installers, and distributors. The Guide provides a framework for developing and implementing heat pump water heater (HPWH) programs with strategies and best practices that have been proven to work. Accompanying the Guide are tools, assets, case studies, and other resources which ENERGY STAR and its partners have developed to support programmatic efforts to improve efficiency, meet climate goals, address inequity, and add value to utility assets through the deployment of HPWHs with demand response capabilities. The Guide concludes that simply allocating ever larger consumer incentives towards this technology, is insufficient to move the market and that an integrated approach is needed.
The approach detailed in this guide encompasses:
- Addressing the first cost barrier with the goal of getting the initial HPWH unit price for contractors and consumers close to the price of standard electric water heaters;
- Driving consumer demand for HPWHs by harnessing public awareness in a way that underscores the annual and lifetime financial savings they deliver; and
- Training, incentivizing, and regularly engaging with the primary actors (installers, distributors, builders, etc.) in the supply chain.
Recognizing the Opportunity with Heat Pump Water Heaters
As opportunities from lighting programs that utilities relied upon to meet energy efficiency goals have dimmed, HPWH incentive programs have become a major focus and source of investment for utilities, states nationwide. HPWHs are compelling because they:
Present largest significant energy savings opportunity in the residential space regardless of climate zone or fuel type;
Are one of the simplest and most effective products for reducing greenhouse gas emissions;
Are an accessible, practical solution for addressing inequity with an average annual savings of $550 for a family of four when replacing a standard electric water heater; and
Can provide utilities with valuable demand response flexibility with connected units capacity to serve as large “thermal batteries.”
In recent years water heater manufacturers have recognized the tremendous value proposition of HPWHs for consumers and utilities alike and have invested to expand product offerings and dramatically improve product performance. There are signs that those efforts are beginning to pay off. ENERGY STAR shipment data indicates the residential HPWH market experienced 26 percent growth in 2022. However, it’s worth noting that most sales continue to take place in a select few regions where utilities and/or states have established ambitious, high-impact HPWH programs.
