Heat pump water heaters - Q&A

Hot water heating can help reduce power bills. Photo / Getty Images

ELEMENT PROMOTION: Dana Darwin is founder of affordable energy company, Energy Alternatives. A trusted advocate for efficient energy technology and a proven leader in the New Zealand solar sector, Dana belongs to SEANZ, SANZ, the NZ Green Building Council, and the Sustainable Business Network. Here, he answers questions about heat pump water heaters - the cheapest way to heat water.

How do heat pump water heaters work?

Heat pump water heaters use electricity to move heat from the air to the water in the tank instead of generating heat directly via an element. The principle is similar to a refrigerator but in reverse, generating heat not cooling. Highly efficient, a good heat pump water heater (HPWH) is three to four times more efficient than conventional electric water heaters (an average one is 2-3 times more efficient).

There are two main types; 'all-in-one' (integrated) systems or 'split' systems. An all-in-one system has the heat pump attached to the top of the storage tank and is a good option when renovating, building new or replacing your old hot water cylinder. With a 'split' system you can keep your old tank, provided it's not too old, and the HWHP is attached to it.

How fast is the industry growing?

Global sales of HPWH are increasing strongly and both the US and China report 13% per year growth . Here in New Zealand, the industry is steadily growing with increased confidence in the performance of the products as a result of an EECA subsidy program, and favourable reports from Consumer Magazine, BRANZ and the Parliamentary Commissioner for the Environment.

Do you foresee a time when all new builds will include a HPWH?

Households with moderate-to-high hot water usage, eg four-person families, are very well suited for HPWH so, yes, I expect that in time all new builds will include them. I also expect HPWH to become standard in new builds for multi-unit properties like motels, hotels and retirement villages.

Heat pump water heaters do cost more at the outset than a traditional electric water heater with an element. Smaller households using very little hot water are unlikely to get enough energy savings to recover that initial cost and are pretty well served by conventional electric water heaters.

Is a HPHW the most eco-friendly of water heating devices?

A good heat pump water heater will transfer three times as much heat into the water as electricity used. This efficiency means you're using 66% less electricity to heat your water. Since New Zealand's electricity is 70% renewable, the non-renewable energy content of the heated water is less than 10%.

No other water heater can match this, including solar water heaters which use proportionally more electricity during the winter months when the non-renewable proportion of electricity generation is highest.

The less electricity we use, the less we are contributing to pollution and climate change, making HPWH units better for families and our environment.

Average price of a HPWH?

All-in-one systems, which include the tank, cost between $2400 and $4500, plus installation, (typically between $750 and $1500).

If you exclude what you'd spend anyway on a standard hot water cylinder, plus the plumbing and electrical labour, the extra cost of a heat-pump water heater is between $1000-$3000. This extra cost is rapidly recaptured due to the high efficiency and cost savings of the unit.

What is the expected return on investment (ROI)?

The ROI depends upon the extra cost of the system and install and the quantity of hot water being used in your home. In a retrofit, where an existing tank needs to be replaced, or the hot water system is being upgraded to mains pressure, the marginal cost is around $800-$1000, which can provide a payback of 18 months to two years.

For a new build, the payback period can be one to three years for a family of four or more. An annual energy saving of $600-$700 is readily achieved, and can increase by $200-$300 per additional resident.

The marginal return for a family of four that invests in a HPWH when renovating or building a new home can range from 40-60% per year. A strong return on investment worth considering!

Do HPWH units work well with a solar PV array?

If the family has, or installs, a solar photovoltaic system, the two technologies complement each other very well, and work particularly well in households where the main hot water demand occurs during the morning. Setting the HPWH to operate during sunlight hours to coincide with when the solar PV can provide the power allows for the water tank "battery" to store the energy for later use.

A HPWH can improve the return on the solar power investment from 10% to 30% per year, because hot water heating makes up so much of household power bills.

This article is an Element Advertising Promotion.