The big decision: standard electric vs. ENERGY STAR® certified heat pump water heater
Heat Pump water heaters are ~70% more efficient that standard electric water heaters and save the average households in the US $384* every year on their electric bills. A Heat Pump water heater is the only water heater that quickly pays for itself (payback) with the energy savings.
Heat Pump water heaters pull heat from the surrounding ambient air and pass it on to the water. They operate like your refrigerator, just in inverse. It is much more efficient to transfer heat than to create heat.
Heat pump water heaters get installed exactly like a standard electric water heater. The only difference is the need for a condensate drain nearby (or use a condensate pump to a sink) and a minimum of ~700 cubic feet (i.e 10′ x 10′ x 7′) around the water heater (consult the specific manufacturers’ Use & Care manual, louvered doors and air ducting options exist for smaller enclosures).
Which size Electric tank do I need?
Family of 1 to 2: 30 gallons
Family of 2 to 3: 40 gallons
Family of 3 to 4: 50 gallons
Family of 5 or More: 80 gallons
Source: https://www.lowes.com/n/buying-guide/water-heater-buying-guide
Electric water heaters cost at retail - The big picture
Electric Heat Pump Water Heater
~$1,699 to ~$3,000. Check out below our online selection of ultra-efficient Heat Pump water heaters and see in the comparison chart how they compare with other offers in the market at big box retailers. Free shipping to your home!
Local Utility rebates up to $2,250 – Click to check out our Hot Heat Pump water heater Deals by State
Federal tax credit 30% on product + professional installation up to $2,000 net of local Utility rebates. ***Upgrade this year as the Federal tax credit is now set to expire on December 31st, 2025! An incentive of this magnitude is not likely to come back for a long, long time!
Operating cost ~$120/year for a 50 Gallons tank and ~$170/year for an 80 Gallons tank
Product Comparison Table
*Prices observed as of 7/30/2025 (Louisville, KY)
For reference:
-A water heater's energy efficiency is determined by the uniform energy factor (UEF), which is based on how much energy the water heater uses and how much energy is used to power the water heater itself. The higher the uniform energy factor, the more efficient the water heater.
Source: DOE - Energy.gov
-The first-hour rating [FHR] refers to the amount of hot water a storage-type water heater (including heat pump models) will deliver in the hour after you turn on the tap.
Source: Consumer Reports
-*Retail prices may vary
Our Selection. Buy with confidence. Great offers on Ultra-Efficient Heat Pump water heaters:
-Free shipping to your home. HVAC Direct is the largest online HVAC supplier in the US.
-Lowest Every Day Low Price (EDLP) in the market.
-Best in class 12-year limited warranty upon product registration. Made by Midea.
-UEF = 4.0.
-FHR = 91 Gallons
-60 days returns, minus returns shipping costs and a 15% restocking fee.
- Heat Pump Water Heater
New ACiQ® 50 Gallon Tank Electric Heat Pump Water Heater. ENERGY STAR®
$1,699.00 Buy On HVACDirect's Ebay Store – Free Shipping to your Home!
-Free shipping to your home. HVAC Direct is the largest online HVAC supplier in the US.
-Lowest Every Day Low Price (EDLP) in the market. Shop with confidence with the “eBay Money Back Guarantee” provision.
-Best in class 12-year limited warranty upon product registration. Made by Midea.
-UEF = 3.75
-FHR = 69 Gallons
-30 days returns minus return shipping costs
-Free shipping to your home. Power Equipment Direct (PED) is a wholly-owned subsidiary of Ferguson Enterprises. Shop with confidence with the “eBay Money Back Guarantee” provision.
-10-year limited warranty on parts and tank.
-Flex capacity. Leak detection.
-UEF = 3.84
-FHR = 83 Gallons
-30 days returns minus return shipping costs
DIY Installation. If you prefer to have it installed professionally, we recommend that you request minimum 3 plumber quotes for the cost of the installation. Until December 31, 2025 the 30% Federal tax credit also applies to the professional installation of qualified ENERGY STAR® Heat Pump water heaters (See The “Resources” section below for details).
Click to access a list of qualified Heat Pump water heater installers published by ENERGY STAR® .
Resource: LocalPlumbingQuotes by ImproveNet® powered by Angi®
.
Standard Electric Water Heater
~$400 to $600.
Operating cost ~$500/year
DIY Installation or get it installed by your local plumbing professional.
Professional Installation of Water Heaters
Standard Electric Water Heater
~$1,400 to $2,500 product + installation by licensed plumber
Operating cost ~$500/year
Electric Heat Pump Water Heater
~$4,500 to $7,000 product + installation by licensed plumber
Local Utility rebates up to $2,250
Federal tax credit up to $2,000 on product + professional installation net of local Utility rebates
Operating cost ~$120/year
Resources: 30% Federal tax credit for Electric Heat pump water heaters, product + installation. Up to $2,000. Set to expire on December 31, 2025!
Make your move now and replace your old electric water before it fails. An incentive of this magnitude is not likely to come back for a long, long time!
Federal tax credit 30% on the full project (Heat Pump water heater + installation) up to $2,000: https://www.energystar.gov/about/federal-tax-credits/heat-pump-water-heaters
“Heat pumps that meet or exceed the CEE highest efficiency tier, not including any advanced tier, in effect at the beginning of the year when the property is installed, and biomass stoves and boilers with a thermal efficiency rating of at least 75% qualify for a credit up to $2,000 per year. Costs may include labor for installation.
Qualified property includes new:
- Electric or natural gas heat pumps
- Electric or natural gas heat pump water heaters
- Biomass stoves and boilers”
Reference: https://www.irs.gov/credits-deductions/energy-efficient-home-improvement-credit
Pick a 240V integrated Heat Pump water heater model with a Universal Energy Factor (UEF) of 3.3 or higher. The requirement for split system and 120V 15A Heat Pump water heaters is a UEF of 2.2 or higher.
Reference CEE – Consortium for Energy Efficiency Residential Electric Water Heating Specification: https://cee1.my.site.com/s/resources?id=a0V2R00000sUQd1
For example, the 240V ACiQ® Heat Pump water heaters qualify for the Federal tax credit. The 50 Gallon model ACIQ-50-HP-WH has a UEF of 3.75 and the 80 Gallon model ACIQ-80-HP-WH has a UEF of 4.0.
Reference:
https://www.energystar.gov/productfinder/product/certified-heat-pump-water-heaters/results?formId=b16b4f32-abfa-4053-b6ed-d5c36ce41c97&scrollTo=542&search_text=&low_price=&high_price=&type2_filter=&brand_name_filter_proxy=ACIQ&brand_name_isopen=0&markets_filter=United+States&zip_code_filter=&product+types+to+select=Select+a+Product+Category&sort_by=uniform_energy_factor_uef&sort_direction=desc&page_number=0&lastpage=0&brand_name_filter=ACIQ
Consult with your tax professional if you have questions.
IRS Qualified Manufacturer (QM) codes for inclusion as needed in the Federal tax returns for tax year 2025:
-A. O. Smith: A5X5
-Midea (Manufacturer of the ACiQ Heat Pump water heaters): TBA
Resources: dIY installation of an electric water heater
***Important! Abide by the safety precautions detailed in these videos and the Use and Care manual of the new water heater being installed.
Resources: Installation of a Heat Pump water heater to replace a standard electric
*Based on DOE test procedure and Energy Guide comparison of 50-gallon nominal capacity pre-2015 standard electric (3,609 kWh) and ACiQ 50-gallon heat pump water heater (866 kWh) using DOE EF to UEF conversion rates. Annual energy savings of 2,743 kWh/year and average US residential electricity cost of 14 cts/kWh. Savings may vary.