Pumped up over a smart heat-pump water heater

By Sandy Bauers
The Philadelphia Inquirer, April 5, 2010
Most of us are not given to paroxysms of delight over appliances, however handy they may be.

But Paul Thompson is different, and not long ago the Washington Crossing retiree discovered something big - a new kind of water heater that saves him hundreds of dollars a year.

It's a heat-pump water heater, and it works like a refrigerator in reverse. It takes heat from the surrounding air and transfers it to the water. Basically, using electricity to move the heat is more efficient than using it to create the heat.

Once a niche, almost-oddball product, it has hit the big time. Two major companies, Rheem and General Electric, have introduced models in recent months.

The industry and the federal government's efficiency program, Energy Star, say the new appliances are the first major energy-efficiency improvement in electric water heaters in decades.

For those with natural gas, tankless water heaters were a big step. But electric tankless heaters aren't as efficient.

Heat-pump water heaters use roughly half the electricity of a standard electric heater. According to Energy Star, one heat pump can save a family of four $450 a year.

And they look cool, sort of like oversized R2D2s.

Consumer Reports says the average water heater lasts 10 to 15 years. They get less efficient as they age because they build up calcium. So if your heater is getting close, these are worth checking out.

Thompson was into the game early.

It was November 2007, and he'd just gotten an oil delivery. His water heater ran on oil - the only oil he'd used since the previous May - so he was able to calculate exactly how much his hot water was costing.

Over 51/2 months, he'd used 134.5 gallons at a price - then - of $2.50 per, so he figured a total of about $720 a year. "Yikes," he said. "That's what I said. Yikes."

He thought he might have a leak. But no. And he didn't want to resort to two-minute showers.

So he went online and discovered heat-pump hot-water heaters. He asked plumbers and contractors if they knew anything about the heaters. No one did.

Choices were few back then, but one was touted for do-it-yourselfers. So Thompson, who's handy, ordered one and installed it himself. At $720 in hot water a year, "I was motivated," he said.

His appliance, an early version, was actually a retrofit that coupled with his existing tank. He also installed an electricity monitor to see if it lived up to the hype.

"It absolutely did," he said. He now figures his hot water costs him $300 a year.

The new water heaters from Rheem and GE are hybrid versions that operate on the heat-pump principle much of the time. But if you have visiting shower hogs, you can activate standard electric elements to heat the water faster - sort of like flooring a Prius.

Peco, one of the utilities giving rebates to customers who buy specified appliances, is offering $300 for heat-pump water heaters.

These heaters also are eligible for federal tax credits equal to 30 percent of the cost - if you haven't already hit the cap of $1,500 with other energy improvements.

Good thing, because the sticker shock can be a jolt. Both the Rheem and GE 50-gallon units cost about $1,500. Even if the savings pay you back in a couple of years, that's a heck of an up-front cost.

A few cautionary words: Naturally, the units aren't as efficient in cold temperatures. So in this region, don't put it in a cold garage, although Rheem spokeswoman Laura Butler says they work well down to 40 degrees.

Also, it stands to reason that when the unit is heating the water, it's cooling the surrounding air. So your furnace might kick in more often, blunting any savings from the more efficient water heater.

But Thompson's unit is in his basement, and he says slightly cooler air down there hasn't been a problem. Some basements even have residual heat from the furnace that the water heater could take advantage of.

Another benefit for Thompson is that the heat pump also dehumidifies the air. He no longer needs a separate dehumidifier - another energy saving.

Finally, the new units are taller than standard ones, they need a line to get rid of condensation fluids, and they make noise - but less than that of a dishwasher, says GE spokeswoman Allison Gatta.

Jack Strong, who manages Smart Energy Solutions, the for-profit arm of the city's Energy Coordinating Agency, is sold on the new appliances.

"The system works," he said. "They have good reliability."

Thompson, meanwhile, is all but gloating.

"I'm saving lots of money," he said. "And I'm not burning oil."