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 in good standing
Seeking to replace an existing gas water heater currently in use at their owner-occupied residential dwelling with a HPWH
The new HPWH must 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 Utility Program Services at (650) 329-2241 or email@example.com.
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: $2,500
CPAU HPWH rebate: up to $1,200
Federal tax credit: $300
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 between 750 to 1,000 cubic ft. 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.