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 Kurt Albershardt on November 18, 2013 at 9:58pm

Raising tank temp weekly mostly happens automatically with solar here.  No such luck with a refrigerant cycle.  In-tank electric resistance elements can easily accomplish that, but the "tankless electric as last-ditch booster" model is better at maximizing overall efficiency.

I'm actually running UV experiment on a hotel recirc loop at the moment.

Comment by Dennis Heidner on November 18, 2013 at 9:45pm

Several of this years Solar Declathon entries ducted their HPHW and used the heaters as part of their active cooling/de-humidification systems.  Cooling portion worked okay for most - but early October had some strong dry desert wind and there wasn't much need for de-humidifcation

As for Legionella, there are really two good choices, heat at least once a week to 140F+  or use UV to sterilize the water coming from the tank.  A resistance element could be used for the weekly "bake" cycle.

If the HPHW is in/or near a deep freezer in a garage - it might be easy to duct the HPHW to the freezer and see what savings might happen.

Comment by Kurt Albershardt on November 18, 2013 at 12:46pm

We have done similar things on commercial projects (preheat using water-cooled evaporators on refrigeration) but I've never quite figured out how to make it fit in a typical residence.

Comment by Dale Sherman on November 18, 2013 at 12:43pm

NYSWDA did a small study in upstate NY in which the majority of HPWHs installed were Gen 1 GE GeoSpring 50 gal. Our study indicated that in some cases we achieved a Savings-Investment-Ratio (SIR) greater than 1.0 and in some cases we did not, primarily due to usage habits.  All units were set to hybrid mode.  If consumption patterns regularly tripped the unit into resistance heating, we did not achieve an SIR.    Setting the unit to HP-only mode would help improve the SIR, but may garner complaints from the client of no hot water at times of peak-HW demand.  Evaluating usage patterns would help determine where using a HPWH would be most cost effective.  

Personally, I think the exhaust from a HPWH should blow over the coils of the refrigerator, or the intake air for the HPWH should come from across the coils of the refrigerator.  While the demands of each appliance aren't an exact match, every little bit helps.

Comment by Kurt Albershardt on November 18, 2013 at 9:33am

I was mostly thinking solar thermal there, but how do you deal with Legionella protection?

Comment by Curt Kinder on November 18, 2013 at 8:46am

I'm skeptical of the efficacy of combining tempering valves with HPWH - the concept runs counter to the thermodynamics that make HPWH so effective.

Tempering valves add expense, another point of failure, and heat loss.

Comment by Kurt Albershardt on November 18, 2013 at 8:40am

Heat pumps and solar share a similarity in that maximum efficiency comes from sending cold water to the heat source.  Because of this, maximizing their efficiency means not heating the tank directly with the secondary source.  Following either with a tankless electric (or gas, but complexity, cap cost, install cost, and space requirements are higher there) which only has to make up the last few degrees can work out quite well.

Comment by Dennis Heidner on November 18, 2013 at 2:36am

Kurt,  Efficiency of the current HPHW drop off as you raise the tank temperatures.  Perhaps in future generations you could do that and store extra heat.  If you are looking for a demand response solution with heat storage -- it might be possible to add resistance heat element near bottom of tank and let the utility control that - using the tank as an energy dump... but that also would complicate how they bill for the electricity.  

But if the utility owns the tank and is instead selling the "hot water" as a service - a hybrid controlled by utility with tempering valve might work.... TOU rates would be complicated in such setup.

Comment by Kurt Albershardt on November 17, 2013 at 8:55pm

Intelligent controls could have a real impact here, especially if ASSE 1017 tempering valves become more prevalent.  Combine that with TOU electric rates and I believe we have a winner.

Comment by Curt Kinder on November 17, 2013 at 8:26pm

Absent deliberate planned obsolescence, I would expect HPWH to offer reliability and durability equal to other similar appliances - refrigerators, dehumidifiers, window air conditioners.

I also expect pricing to fall to about the cost of a mid-grade electric resistance tank heater + the cost of a small portable dehumidifier, because those two together have nearly all the components contained in an HPWH.

Scale / sediment should be much LESS of a concern with HPWH than with electric resistance since the Watt density (or equivalent heat transfer rate / area) is so much lower.

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