Electric Thermal Storage vs. Heat Pump Water Heaters

Contributing Author: Ben Schoenbauer 

Which residential water heating technology is best for meeting electricity savings goals? It will depend if the goal is reducing total consumption or lowering peak demand

In Minnesota, utilities run Conservation Improvement Programs for two types of electric water heaters. Heat pump water heaters remove heat from the surrounding air and transfer it to water. Moving heat requires less energy than generating it directly, so heat pumps are an efficient replacement for traditional electric storage water heaters. Electric thermal storage heaters use electricity to heat a large tank of water during off-peak hours, and store it so occupants can use it during peak draw times. Heat pump water heaters are significantly more energy efficient: they use 50 to 100 Watt-hours per gallon, while electric thermal storage heaters use 125 to 200.

From a utility perspective, both technologies have energy system benefits. In cold climates, heat pump water heaters reduce overall energy use by 30 to 60 percent. Electric thermal storage water heaters don’t save energy, but they do shift the peak (unless the occupants use more than their heater’s capacity). This helps reduce to need for additional capacity, and can make use of low cost off-peak resources like wind energy. However, accounting for standby losses from the larger tank, they can sometimes use more energy than standard heaters due to overheating. 

Electric thermal storage heaters are also more affordable because the user only has to pay for a new control (as opposed to a new water heater). If peaking isn’t a major concern, heat pump water heaters can save significant amounts of energy, but at a higher upfront cost to the consumer. And it can be hard for a homeowner to justify that investment, especially since most utility rebates cover the entire cost converting to an electric thermal storage control. 

This is reflected in the data. According to a current Department of Commerce-funded market assessment by Senior Research Engineer Ben Schoenbauer, seven Minnesota utilities offer rebates for heat pump water heaters, and eleven offer them for electric thermal storage. In addition to the rebate for the upfront cost of electric thermal storage, the utilities offer a reduced rate for electricity purchased off-peak. Statewide, only about fifteen customers have taken advantage of programs for heat pumps, while thousands have installed electric thermal storage. Those controls can help small outstate utilities, who have more electric customers than metro-area utilities. But could heat pumps provide enough peak reduction, coupled with their energy savings benefits, to replace electric thermal storage in some utility programs?

Beginning in April 2015, a new Department of Energy (DOE) conservation standard will require any electric storage water heater with a storage volume above 55 gallons to meet the level of efficiency currently achieved by heat pump water heaters. The DOE estimates that the 2015 standards will save 3.3 quads of energy and avoid 172.5 million metric tons of CO2 nation-wide, which is equivalent to taking 33.8 million cars off the road. But it presents a challenge to utility rebate programs based on 2010 standards, so a committee is developing a waiver process. The waivers would allow manufacturers to produce a limited number of electric water heaters with storage volumes greater than 55 gallons, but only for installation through a specific utility’s electric thermal storage program. Each waiver would last for one year, but manufacturers could apply for another in following years. But even if it’s adopted, this process won’t affect the conservation standard itself.

For Minnesota, these policy debates are occurring in a bit of a data vacuum. It’s challenging to verify the energy savings of any of these upgrades, because Minnesotans install water heaters in the basement. Modeling is often inaccurate because basements are poorly represented, and there’s very little field data from cold climates. Despite these constraints, water heating remains a large percentage of our state’s residential energy use. In an effort to provide more information to policy makers, CEE is compiling information about heat pump water heaters, and adapting findings to reflect Minnesota’s climate, water heating systems, and typical usage.

*This research is supported in part by a grant from the Minnesota Department of Commerce, Division of Energy Resources through the Conservation Applied Research and Development (CARD) program. And with co-funding by CEE in support of its nonprofit mission to advance research, knowledge dissemination, and program design in the field of energy efficiency.

Related posts:

ACEEE Hot Water Forum 
Fall 2013 Research Update 
French Perspective: Thermal Regulation for New Residential Buildings 

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Comment by Curt Kinder on December 16, 2013 at 10:11am

I'm suprised that model did as well as 3/5. Lowest EF for an HPWH that I'm aware, serious limitations revealed in testing. Fortunately it has been superseded by a much more promising Gen2 model. Gen2 still not yet in stores near me. Gen1 still gathering cobwebs at local HoDepo

Comment by Tom DelConte on December 16, 2013 at 10:06am

Somebody else in here, can't remember who it was, requested info on a 2000 dollar name brand hybrid water heater that gets 3 out of 5 customer stars for satisfaction: http://www.amazon.com/Rheem-HP50RH-Water-Heater-Gallon/dp/B003UHURT...   must be nice to have another plumber to look things up for you

Comment by Tom DelConte on December 13, 2013 at 11:56am
Comment by Dennis Heidner on November 21, 2013 at 2:17am

I don't know of any coal plants that run that low efficiency even when transmission lines are considered.  Transmission line losses are about 1%/100 miles.  So transmission losses might be 4%, neighborhood losses a couple of more.  Few of the old subcritical coal plants remain.  More likely it is a critical (steam pressure/temp) plant and probably running effiiencies above 30%+. I would bet the coal plant is running closer to 35% even with emission controls.  New coal plants using advanced ultra-supercritical and district heat can extract about 43% of the energy content from the coal.  CCS when commercially available will drop efficiency by about 5%.

We may not like it - but coal is likely to be around for another 50 years.  Demand for the products it is used with needs to drop first.  That includes both electricity and the durable products that we use coal for -- like steel appliances.   While I have solar on my roof top, I do not believe we could build out fast enough to stop using coal over night.  We have to shrink the demand first - that building efficiency improvements.


Efficiency improvements made to homes/commercial buildings result in double the savings at the coal side -- since you've avoided converting the coal into heat to begin with....

National Institute of Health (NIH) has information out on Legionella.  ASHRAE has a recommended practice for dealing with Legionella.

I asked about recirc pump - because sometimes they are installed on timers or they run  nearly continously.  That really burns through the energy.  Recirc pumps need to be "on demand only".

HPHW are independent of ground source heat pumps.  But I'm not particularly fond of ground source heat pumps -- personal preference and in the Seattle area - ordinary ductless heat pumps do a pretty reasonable job at a lower cost.

Comment by Leo Klisch on November 20, 2013 at 11:45pm

Dennis, I guess a high efficiency gas heater would mean less CO2 than electric resistance from coal and maybe even natural gas power unless a CCNG plant. Hard to say how expensive reliable CCS will be. The coal plant is located in central North Dakota using lignite so it's about 400 miles form my point of use. They do dry the coal somewhat but when using their rate of consumption of about 22,000 tons/day and the heat value of 7500 btu/lb. of the wet fuel, I calculate efficiency around 20% including transmission loss.

Thanks for info on Legionella.

No recirc pump on heater but something to consider as I get more efficient and install onsite renewables.

To bad the temperature increase is not greater with HPHW so I could tap into my large geothermal ground loop which runs an EWT from 30 to 55 F depending on time of year.

Comment by Dennis Heidner on November 20, 2013 at 5:03pm

Hydro has long been considered renewable - the issue is it it low impact or high impact.   Wind farms that are in the paths of bird migrations should be considered high impact.  Hydro dams that implement fish migration are called high impact.    Hydro is often left off of the RPS for states because their is a misconception that all low impact dams have been built.   

Comment by Kurt Albershardt on November 20, 2013 at 10:11am

90% must be counting hydroelectric as renewable, with which some might take umbrage.

Comment by Curt Kinder on November 20, 2013 at 10:10am

I've had a Geyser (Gen1 model, since improved) in continuous service since May of 2009. Works well, keeps my basement mechanical room and adjacent area cool and dry to boot.

Comment by Dennis Heidner on November 20, 2013 at 1:10am

The percentage of energy generated using coal is dependent on your region of the US and the transmission/generation operators in that region.  In Washington probably 90% of our electricity is from renewables with maybe 10% from coal.  California has a higher portion of renewables and natural gas than most people expect.  Choosing an HPHW to reduce CO2 is probably not the most efficient means to reduce CO2-- unless you know that your electricity is indeed coming from an older coal plant.

Even then coal plants of the future (10 years out perhaps - if equipped with carbon capture and sequestering) may produce the same CO2 emissions as the current natural gas generation.

Legionella is common in the environment, but it generally doesn't bloom to levels that are dangerous unless the temperature of the water drops down between 75F and 105F.  Its the hot tub temps that legionella really like.  It will grow in 120F but slowly - most of the time the dilution of fresh water can manage it..  Really the only way to test is to send it off for lab work and in most cases it doesn't pay.  If you've had water stagnant in the tank for any length of time you can crank up the heat to 140F for a day and fix the problem.  Chlorine alone doesn't stop legionella - but it slows it down.. as do copper pipes.  

Do you have a recirc pump on your heater?  

Northroad has a heat pump heater that can be added as an after market product - called the Geyser.  If you are leasing the tank - I would not mess with it other than pushing your coop to keep watching the HPHW products.  If you own the tank and want to try - the Geyser DIY kit might be a good option,  along with making sure you've got the tank wrapped well with a blanket.

Comment by Leo Klisch on November 19, 2013 at 3:14pm

My electric cooperative in Minnesota does not appear to be supporting HPHW water heaters. The main reason is the DOE regulation that eliminates the larger off peak hot water storage tanks. Even though I have a 100 gallon off peak tank, I tend to support the DOE since on a yearly basis the wholesale generator is about 73% coal, 5% gas, 7% hydro, 15% renewables, the standby losses and cheap off peak rates probably emit more CO2 than if they were all HPHW heaters. If their generation were 80% non CO2 emitters especially renewables without a robust large regional grid then I would tend to support heat storage.

Even with my Marathon heater set to about 120 F, I have 800 kWh of standby losses/year. Been using it for 5 years and haven't noticed Legionaries problem, though I have no idea how to check for it.

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