An Arizona homeowner shared their plan to replace their outdated gas water heater with a Rheem heat pump model, potentially even saving $400 annually just by eliminating their gas service charge, beyond any other savings.
The switch comes with considerable financial perks beyond operational cost reductions. Thanks to the Inflation Reduction Act, homeowners can claim a 30% tax credit on heat pump water heater purchases.
Many utility companies offer additional incentives — in this case, a $500 rebate from the local power company.
These incentives may not be available indefinitely. President Donald Trump has stated he wants to eliminate such subsidies to reduce federal spending. While major changes to the IRA would require an act of Congress, the future of these incentives remains uncertain.
With that in mind, acting sooner rather than later could save homeowners thousands of dollars in potential incentives that might disappear.
The scoop
The Reddit user shared their heat pump water heater plan with the r/heatpumps community, asking for input on their strategy.
"What am I missing?" the Redditor asked. "Been doing some research on this, have a 50-gallon gas water heater installed outdoors which is the only appliance requiring continued gas service. I'm spending around $400/yr on gas, and simply eliminating the baseline service charge alone feels like a win."
The heat pump would be installed in an outdoor storage shed in Arizona, providing hot water and cooling the storage space by pulling heat from the air.
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The homeowner plans to take advantage of time-of-use electricity rates by heating water to 140 degrees Fahrenheit during cheap-rate periods and letting it coast during expensive peak hours.
How it's helping
Heat pump water heaters typically use 65-70% less energy than traditional electric resistance units, making them highly cost-effective over their lifespan.
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Price 💰 The financial advantages are substantial. The payback period could be remarkably short between the 30% tax credit, $500 utility rebate, and yearly savings on gas service charges.
This is all true when getting power from the grid, but the savings could be even greater for those who have solar panels to generate effectively free electricity.
The environmental impact is just as impressive. Homeowners can dramatically lower their home's carbon footprint by making straightforward upgrades like heat pump water heaters and using renewable energy.
Organizations like EnergySage, WattBuy, and HomeBoost can help homeowners find similar money-saving, planet-friendly upgrades.
Companies like Cala also sell the most modern and intelligent heat pump water heaters direct. Cala's smart heat pump water heaters allow homeowners to slash their energy bills by heating water exactly when needed, including when electricity is cheapest and most abundant.
What everyone's saying
The Reddit community offered enthusiastic support and practical advice.
One user commented, "Arizona is the best possible climate for one. Hot air makes it more efficient. And relatively warm incoming water means recovery is faster. I think technically that makes it less efficient than colder water, but the difference is outweighed by simply requiring less energy to warm up the water."
Another suggested, "Go with the biggest heat pump water heater you can fit in that space. That helps offset slow recovery problems. These things heat very slowly when the input water and air temperature are both cold."Even those in colder climates reported success: "Live in PA, have a Rheem hybrid in PA. 50 gallon, 2-3, sometimes people in the house. It has been great, even through winters."
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