Heat pump vs. tankless water heater comparison in efficiency.
Heat Pump vs. Tankless

According to the U.S. Department of Energy, approximately 18% of a typical home’s energy usage accounts for heating water. So it’s no surprise that many homeowners look for ways to reduce energy consumption and keep water heating costs as low as possible. It is for these reasons that heat pump and tankless water heaters came into existence. If you’re in the market for a new water heater, it’s essential to understand the differences between heat pump and tankless units to determine which is best for your home.

Read on to learn the unique advantages of both and see which one may be better suited for your household’s needs.

Heat Pump Water Heaters

Heat pump water heaters (HPWHs) work by transferring heat from the air or ground to heat the water. They are highly energy-efficient, as they use electricity to move heat rather than generate it directly. This can result in significant energy savings and lower utility bills. HPWHs typically have a tank for storing hot water, making them ideal for households with consistent hot water demands.

Pros:
  • HPWHs are about two to three times more efficient than conventional electric water heaters.
  • Reduced energy consumption translates to a lower carbon footprint.
  • Lower energy bills over time can offset the initial purchase price and installation costs.
Cons:
  • Higher upfront cost compared to conventional water heaters.
  • Requires more space than a tankless unit and is usually installed in areas with good air circulation, such as basements or garages.
  • Performance can be affected by the ambient temperature making them less efficient in extremely cold climates.

Tankless Water Heaters

Tankless water heaters, also known as on-demand water heaters, heat water only when it is needed. They do not store hot water but instead heat it directly as it passes through the unit. This eliminates standby heat loss and can provide an endless supply of hot water.

Pros:
  • Since water is heated on demand, you won’t run out of hot water during extended use.
  • Compact size allows installation in smaller spaces, even inside a closet or on a wall.
  • No standby heat loss, which can result in lower energy usage compared to traditional tank heaters.
Cons:
  • Higher initial investment for both the unit and installation, especially if extensive retrofitting is required.
  • May struggle to supply enough hot water for simultaneous, multiple uses (e.g., showering, bathing, and running the dishwasher).
  • Requires regular descaling, especially in areas with hard water.

Which is Best for Your Home?

Choosing the right water heater depends on several factors, including your hot water usage, budget, space availability, and local climate.

  • For large families or homes with high hot water demand, a tankless water heater can provide continuous hot water without the need for a large storage tank. However, if multiple hot water outlets are used simultaneously, ensure the tankless system has adequate capacity.
  • Consider both initial costs and long-term savings. Heat pump water heaters offer significant energy savings but come with higher upfront costs. Tankless water heaters also have higher initial costs but can be more efficient in the long run.
  • Heat pump units require more space and good ventilation, while tankless units are compact and can be installed in smaller spaces.
  • If you live in a colder climate, a tankless water heater may be more efficient.

Ready to learn more? Contact Anthony’s for a hot water needs analysis and new system proposal.