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 William Turner on November 17, 2013 at 4:58pm

Curt thanks for all the info.  I have run a Seisco electric unit and a heat pump unit on two different solar hot water systems I own both have 100 gallon solar storage. The Seisco work great if its only doing peaking once and while and there are not 4 people taking showers, if its used a lot the electric bill goes up. The heat pump works great when there has been no sun or heavy use with only marginal sun. I unit I currently own is a GE

Gen one unit so it will be interesting to she what happens with the reliability. A heat pump should run for 15 years? or more just like a refrigerator. So long as the tank is not dealing with bad water, or the anode gets maintained. I owned an original 80 gallon Thermastor 30 years ago, that unfortunately had a bad weld on the tank, that I fixed only after I took the heat pump off it. Its now a solar storage tank.  A friend of mind David Bearg ran one for 18 years with no problem.    

Comment by Curt Kinder on November 17, 2013 at 11:31am

Ahri directory now has all HPWH - first hour, EF ratings, etc


Comment by Kurt Albershardt on November 17, 2013 at 11:17am

The SHPT-50 does look interesting, but I'm having trouble finding out what the actual capacity of the heat pump is (for any of the models, actually.)  As someone who designs hybrid systems, I have been recommending tankless electric post-heat for solar more often of late than I would ever have expected.

Comment by Curt Kinder on November 17, 2013 at 9:02am

Tom has identified a known issue with first generation GE HPWH, model GEH50DNSRSA, manufactured in China, in which the evaporator is prone to leak refrigerant.

To some extent, GE appears to have acted reasonably in the face of warranty claims, although the corporate run-a-round many have experienced is regrettable and a black eye on GE.

GE has since stopped selling the Chinese-made Gen1 model and moved production of an improved Gen 2 model to Kentucky. By most accounts, Gen2 model GEH50DEEDSC is quieter, easier to operate, slightly more efficient, and, if initial reviews are any guide, more reliable.

GE would be well served by replacing, at its cost, any Gen1 unit that experiences more than 1 failure with a Gen2. This program should be implemented ASAP, or GE risks irreparable damage to its brand, undoing a huge marketing investment in HPWH. Gen1 poor experiences have bled into Gen2 reviews, allowing Tom to cackle with joy at negative publicity about a technology he scorns.

Meanwhile, others have stepped to the plate. The Gen1 Rheem / Ruud / Richmond model, which fared so badly in lab tests that I couldn't recommend it, has been supplanted by a greatly improved, substantially more efficient Gen2 model. I await tests of that, but the redesign looks very promising.

A.O Smith, whose HPWH models are sold under Smith, State, American, Reliance, Craftmaster, Kenmore, and Whirlpool names (I think that's all...) has sold workhorse 60 and 80 gallon models. My sole concern about those models has been noise, a tradeoff for more robust operation in colder areas, a result borne out by testing. Smith has come out with a 50 gallon model, SHPT-50, not yet in stores, with an astonishing EF of 2.75 and reported noise level lower than GE. I plan to deploy one ASAP.

I'm puzzled by Tom's venom directed at an entire industry with clear potential to materially impact domestic energy consumption, all based on one model's early failings.

Early adopters sometimes take a hit for the sake of those to come. I'm looking to GE to stop the bleeding, but am pleased that there are other alternatives, the beauty of free markets and informed consumers.

Comment by Christopher Morin on November 16, 2013 at 12:56pm
Wow Tom, I would not base my purchase decision on 13 bad reviews on Amazon. As you have stated before, when posting on others blogs, "the only trusted authority on appliances and home energy, Consumer Reports." I would challenge you to check the reviews on the product you are typing these posts on and see the reviews there. I am willing to bet there are more than a baker's dozen in bad reviews - yet you have said product. Based on my personal experience, inspecting about (200) installations for a MA/RI rebate program, satisfaction and energy savings both exceed customer expectations.

I think we can both agree that this product is not for every application.

I am surprised that you are reaching to Government distrust and associating this with such a great American made product. The same government that you are challenging provides you with the freedom to arbitrarily type comments and the funding for the forum (this exact website) to do so.

Also, there are other products out there that can save energy - depending on the fuel source, installation needs, etc. I encourage all consumers, and contractors, reading these posts to look at more than one Water Heating device before making a decision. Ask your installing contractor what they are comfortable with and check into Utility Rebate Programs that often provide significant incentives.

I do not expect you to fetch any reference for me, just to provide information for the ludicrous statements you have made. Do not patronize anyone on this site with your chatter, just make conversation that is truthful and independent from your political issues! I am sick of seeing posts attacking credentials and pushing some personal agenda. No one on this site has anything to prove to you, and you should value their differing opinions as I do! I do value your opinions, not discriminating if I agree/disagree. As long as your information pertains to this subject, I look forward to any and all replies. I apologize to the other readers for such nonsense that has landed in their e-mail inbox...
Comment by Tom DelConte on November 16, 2013 at 8:56am

The old MBA technique: make the man go fetch the data, huh? It would be unconscionable to install a piece of equipment in a customer's home that is known by everyone to not be durable: http://www.amazon.com/GE-GeoSpring-Hybrid-Heater-GEH50DNSRSA/produc...  I guess the truth is: they haven't improved! The heat pump portions are made in china, in general, and are known by everyone, except the installer/pushers, to not be durable. Please see my blog, the answers are well summarized there!

"they need as much as 7 feet clearance from floor to ceiling. You'll also need up to 1,000 cubic feet of uncooled space to capture enough heat from the air, along with a condensate pump (about $150) if there's no drain nearby. Hybrid heaters are noisier than conventional storage-tank heaters, exhaust cool air, and can rob some heated air in winter." CR doesn't have the durability data yet. Storage tank technology trumps all, at the moment.

Why publish fake studies by a government? These are the same types of people who make you pay out of your federal tax dollars $600 million dollars for web sites that don't work!

Also: there's a warranty. Hmm, most warranties aren't worth anything. When your 2 year old water heater breaks, you have a small baby in the house, & you have to purchase another new one because the heat pump parts won't come from china for another month! Have a heart, just install the storage heater for the nice young person.

Greed isn't good. You'll make more money in the long run by being honest with people(you need me to go fetch the christmas movie film citation on that point now?)

Let's go on & on about a closed subject that I've already covered: water heaters. There is a secret proven technology available today(and for 50 years) that makes water heating much more efficient, that has been totally forgotten. I have one. Why don't the super duper study quoters federal state government experts know about it? Oh, they haven't read the ASHRAE Handbook yet, with all their fake certifications? 

Comment by Dennis Heidner on November 15, 2013 at 8:55pm

HPWH have improved in the last four or five years.   As for the fixing potential concerns that home owners might have about the amount of water available for family of four or more taking showers.  I think the Middlebury college entry this into the 2013 Solar Declathon offers a simple workable solution.    

You can add a tempering valve and a flash hotwater heater into the system.  When HPHW can no longer meet the demand - the flash heater picks up the peak.

FWIW,  Middlebury's hotwater tank was 40 gallon resistance!   It placed first in the water draw contests,  and they stayed within the energy budget.  The smaller storage tank also meant less tank surface area -- which implies less heat loss....


Comment by Christopher Morin on November 15, 2013 at 6:34pm
Tom, I have not heard of this durability issue - are you referring to any published information or is this personal experience? Almost all of the residential HPWH's on the market today carry a 10 year warranty...I assume a life span at half of the factory warranty would be all over Consumer Reports, but I cannot not find any such report for all the major brands in the New England Market; GE, Steibel Eltron, & AO Smith...
Comment by Tom DelConte on November 15, 2013 at 5:36pm

HPWH have very poor durability, please reference my blog on the subject. The Minnesota study does not take into account the need to replace the hpwh every five years, resulting in very poor durability. The average consumer already knows this, as bad news in water heating travels fast at cocktail parties!

Comment by William Turner on November 13, 2013 at 7:56am

Comment to Kurt Albershadt: Hello Kurt, we have data that shows that a high use, (family of 4),  (not ducted 50 gallon unit, located in a basement utility space) HPWH does not in fact significantly lower the temperature in an unfinished basement in Southern Maine during cold weather, does keep it dry during high dew point summer weather, and does work at around a COP of 2 most of the year. I don't quite understand the facts behind your comment regarding otherwise. They also lower demand peaks and spread out demand if not allowed to go into resistance mode. Sounds like a winning combination unless you have a good site for evacuated tubes, which will still need a good backup system in cold climates. I have a unit that is in fact backup for my own flat plate solar heated DHW system.

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