The Big decision - Stay with gas or electrify with a Heat Pump Water Heater (240V or 120V)
In a nutshell here are the main benefits of switching from a gas water heater to a Heat Pump water heater:
-Heat Pump water heaters are 4x to 5x more efficient than gas water heaters.
-Lower operating costs even in markets with high electric rates.
-Ability to enroll in Utility Demand Response programs to energize during the times of the day when the electric rates are cheaper.
-Reduced carbon emissions.
-Improved indoor air quality
Eco-Savings Calculator
Updated: Dec 2025 EIA Rates
Methodology: Comparison based on standard 0.6 UEF fossil-fuel tanks vs. 3.5 UEF HPWH. Gas/Propane rates sourced from DOE & EIA 2025 fuel outlooks.
Source of Local Equivalent Fuel Costs
Natural Gas: The calculation is based on the Energy Information Administration (EIA) December 2025 residential outlook. It assumes a household switching from a standard 0.60 UEF (Uniform Energy Factor) gas tank to a 3.50+ UEF Heat Pump. The savings represent the cost of ~220 therms of gas (offset) minus the cost of ~1,100 kWh of electricity (new load) at your specific state’s rate.
Propane: Propane rates are based on the EIA Heating Oil and Propane Update. Since propane is a delivered fuel and significantly more expensive per BTU than natural gas, the “Propane Offset” value is roughly 2.2x higher than the gas offset, making the heat pump savings much more dramatic for these users.
-For a swap out of a gas water heater, a remodel or new construction project where easy access to a 240V 30A electrical outlet is NOT an issue, select a 240V Heat Pump water heater. You’ll get faster recovery as needed with backup electric resistance elements.
-For a fast swap out of an existing gas water heater with no easy access to a 240V 30A electrical outlet, select a 120V Heat Pump Water Heater. No electrical work or hard wiring required with a 120V Heat Pump water heater. No electrical panel upgrade required. It simply plugs into a 120V shared circuit outlet. 15A or 20A breaker.
***Recommendation – Because the recovery (measured in “First Hour Rating” or “FHR”) of the 120V Heat Pump water heaters is significantly slower than gas, upsize the tank 2 fold compared to the gas tank that you are replacing.
-If you are replacing a 30 gallon gas tank, opt for a 50 gallon 120V Heat Pump water heater or larger.
-If you are replacing a 40 gallon gas tank, opt for a 65/66 gallon 120V Heat Pump water heater or larger.
-If you are replacing a 50 gallon gas tank, opt for an 80 gallon 120V Heat Pump water heater.
Utility Rebates for Heat Pump Water Heaters in your State
Currently AZ, CO, DC, GA, IN, MI, NC, NY and WI have broadly rolled out their up to $1,750 instant discount on Heat Pump Water Heaters and funding is available. NM is coming soon. The funds in CA are committed. Check out if you are eligible based on your income:
The Home Electrification and Appliance Rebate [HEAR] Program is a State initiative funded Federally in 2022 that gives low-to-moderate-income households an instant discount of up to $14,000 to switch to high-efficiency electric appliances. Unlike a tax credit that you wait months for, this rebate is applied at the time of purchase, essentially acting like a high-value coupon.
1. High-Value Instant Savings
You don’t get a check in the mail; you get a lower price on the invoice.
Heat Pump Water Heaters: Up to $1,750 off.
Heat Pump Heating/Cooling: Up to $8,000 off.
Electrical Panels/Wiring: Up to $6,500 off (if needed for new appliances).
2. Eligibility is Income-Based
The program is designed for households earning less than 150% of the Area Median Income (AMI).
Low Income (<80% AMI): The rebate covers 100% of the cost (up to the caps above).
Moderate Income (80%–150% AMI): The rebate covers 50% of the cost (up to the caps above).
3. Point-of-Sale Convenience
Because this is a point-of-sale program, you must work with a state-approved contractor. You simply apply on the State portal and get your State Voucher. The contractor deducts the amount of the voucher directly from your quote.
If your main residence is in AZ, CO, DC, GA, IN, MI, NC, NM, NY and WI, the tool below helps you very quickly estimate if potentially you could qualify for the HEAR instant discounts based on your household income:
Disclaimer: Estimates provided by this calculator are for educational purposes only. Final rebate amounts, eligibility, and timelines are determined by federal, state, and utility providers and are subject to change based on available funding. This tool does not constitute tax, legal, or financial advice. We recommend consulting with a tax professional to verify your specific eligibility before making a purchase.