There's a new type of ultra-efficient water heater taking over U.S. homes while reducing expensive utility bills.
As HVAC installer Bruce Dike explained in a conversation with This Old House, heat pump water heaters function differently than conventional systems.
Unlike gas and electric resistance water heaters, which generate heat, heat pump water heaters work more like a refrigerator in reverse, pulling ambient heat from the air and transferring it into the water. These units are incredibly efficient compared to traditional systems.
In fact, as Dike pointed out, some units can reach up to 400% efficiency. Since water heating makes up about 12% of a home's total energy use, as the Environmental Protection Agency revealed, switching to a more efficient system can lead to meaningful savings on your energy bills.
Plus, because heat pump water heaters pull heat from the surrounding air, they can also provide a bit of bonus cooling and dehumidification in the space where they're installed.
"It's a phenomenal solution," Dike says in the video. "In the South, for example, there's a lot of water heaters in garages, so some air conditioning and dehumidification in your hot and humid garage is a good thing."
However, in parts of the country where extra cooling isn't ideal, solar-assisted models offer an alternative, using an outdoor panel to capture heat from the sun and surrounding air instead.
A common question about heat pump appliances is whether they can still perform well during frigid winter months. According to Dike, that concern is often overstated.
"The efficiency of this is extremely high in the summer," Dike says, referring to a solar hybrid heat pump water heater. "In the winter, the efficiency is less … but still vastly higher than a regular electric water heater."
If Dike's expertise has you considering a heat pump water heater, consider checking out the efficient units from Cala.
Commenters below the video were quick to add their thoughts on the next generation of water heaters:
"I did not know these existed," one wrote. "This is awesome."
"Bruce did one at my house in Portsmouth, N.H. Excellent product so far," another added.
Cala specializes in smart heat pump water heaters that learn your household's usage patterns, delivering hot water when you need it while helping reduce energy bills.
According to the company's data, a homeowner who ditches an outdated electric water heater for a Cala system can save up to $767 per year on energy bills.
Get TCD's free newsletters for easy tips, smart advice, and a chance to earn $5,000 toward home upgrades. To see more stories like this one, change your Google preferences here.




