Heat Pump Water Heater Pilot

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If you are interested in reducing your household’s carbon footprint by replacing your gas water heater with an energy efficient electric heat pump water heater, you may be able to participate in a pilot program that will offer a rebate of up to $1,500. City of Palo Alto Utilities is conducting a Heat Pump Water Heater (HPWH) pilot with the objectives of promoting HPWHs among homeowners and gathering customer feedback on the retrofit process as well as the performance of HPWHs.

Who is Eligible
To participate in this pilot, you must be:

  • A CPAU residential customer
  • Seeking to replace an existing gas water heater currently in use at their owner-occupied residential dwelling with a HPWH

The new HPWH must be Energy Star certified and have an Energy Factor of 2.8 or higher. Click here for a list of Energy Star certified HPHW.

As part of this pilot and for a limited time, CPAU offers rebates of $1,200 for HPWH units with storage of up to 79 gallons and $1,500 for HPWH units with storage of 80 gallons. For more information or questions, please contact the Home Efficiency Genie at (650) 713-3411 or advisor@efficiencygenie.com

How do I sign up for the HPWH pilot?
To sign up for the pilot, please fill out the Heat Pump Water Heater Pilot Program Participation Agreement. CPAU staff will contact you when we receive the submitted agreement.

Costs and Benefits of a Heat Pump Water Heater
There are many costs and benefits, both monetary and non-monetary, to replacing a natural gas water heater with a HPWH.  Upfront costs typically include the HPWH unit, tax, installation permit, installation labor, and electrical work to run a 240 volt outlet near the water heater location. On an ongoing basis, you will realize savings on your natural gas bill, but additional costs on your electric bill, given the change in fuel type. Over the lifetime of the water heater, given Palo Alto's carbon neutral electricity supply, switching to a heat pump water heater will also result in greenhouse gas (GHG) emissions savings. Below is a summary of estimated costs and benefits for an average customer. 

Estimated upfront costs for a 50 gallon HPWH including installation: $2,500
CPAU HPWH rebate: up to $1,200
Estimated annual utility bill savings: $25
Estimated GHG emissions savings avoided over the lifetime of the water heater: 18 metric tons
Estimated lifetime abatement cost: $25 per metric ton of GHG emissions

Try out our new calculator to determine whether or not an electric Heat Pump Water Heater is right for you!

Is a HPWH Right For You?
These are factors to consider when replacing a gas water heater with a HPWH:

  • Location:  HPWHs need extra space around them for sufficient airflow; most manufacturers recommend that a HPWH be installed in a space that is bigger than 700 cubic feet or has a louvered door; also, there should be a minimum clearance of 6" above and around the HPWH.  When operating in heat pump mode, a HPWH will dehumidify and cool the surrounding space.  Also, the mechanical components of an HPWH produce noise rating from 55 to 65 decibels, which is slightly louder than a refrigerator.  The garage is the recommended location.
  • Electrical:  HPWH requires a dedicated 30 amp breaker (except for the Stiebel Eltron's Accelera 220E model, which requires a dedicated 15 amp breaker) and a 240V electrical conduit from the electric panel to the location of the HPWH unit.
  • Sizing:   While a 50 gallon gas water heater can serve a household of 3 to 4 people, an 80 gallon HPWH is more suitable for a household of 4 or more people. A HPWH with a bigger tank supports higher water draw volume without the need to operate on the less efficient, electric resistance mode.
Last Updated: Aug 1, 2017