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​Heat Pump vs Tankless Water Heater

Views: 8     Author: Site Editor     Publish Time: 2025-04-14      Origin: Site

Hot water is an essential part of our everyday lives, especially when you live in a cold temperature environment or when you want to wash the dishes that are stuck with food. Thus, investing in a hot water system is an important decision worth reliable, professional information.

Heat Pump Water Heater vs. Tankless Water Heater

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In this comparative guide, we will compare two of the most popular water heaters – heat pump vs tankless water heater. While both options can provide hot water solutions, they differ in ways that suit different people and households. Read on as you learn how they compare with each other and which is best for your needs.


What is a Heat Pump Water Heater?

A heat pump water heater uses the same technology as a heat pump HVAC system. It basically uses electricity to transfer heat from the surrounding air or ground into a water storage tank.

Heat Pump Water Heater

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How Heat Pump Water Heater Works

It has a heat pump placed with a water storage tank. The heat pump fan draws warm, ambient air from the environment into the unit and blows it across refrigerant-filled evaporator coils. Then, the air is passed through a compressor, which increases the temperature. The air then passes through the coils in the water storage tank, thereby making the water hot.


Advantages of a Heat Pump Water Heater

A heat pump water heater has many benefits, making it an ideal option for households seeking long-term energy savings and lesser environmental impact. Some of its advantages are:

● Lower Energy Consumption: Heat pump water heaters use electricity to extract air from the surrounding to heat the water, making them consume lesser energy. In fact, the U.S. Department of Energy said that heat pumps can be two to three times more energy efficient than traditional electric water heaters.

● Eco-Friendly: Unlike conventional water heaters, it doesn’t involve burning fossil fuels. Thus, it produces lower carbon emissions, thereby serving as a more sustainable option.

● Potential Tax Incentives: Many countries’ governments (federal, state, or local) offer tax credits or rebates for people who install any heat pump system, including heat pump water heaters.


Disadvantages of a Heat Pump Water Heater

Despite its notable advantages, it has some drawbacks, which include:


● Bad for Cold Climates: Not suitable for frigid regions (<400F). If the temperature is too low, it will struggle to function efficiently (you may not get sufficient hot water and may consume more energy in the struggle to work optimally).

● Space Requirement: Needs about 1,000+ cubic feet of airspace and moderate temperatures. It requires a well-ventilated area to draw heat from the air or ground.


What is a Tankless Water Heater?

A tankless water heater, which is also called an “on-demand” or “instantaneous” water heater, does not use a storage tank. It acts on demand, heating the water directly as it flows through the unit.

Tankless Water Heater

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How Tankless Water Heater Works

When the hot water faucet is turned on, the burners switch on. As cold water passes through the burners (whether gas or electric), the water heats to the temperature the heater is set.  It delivers hot water almost instantly it is demanded and continues heating as long as the demand persists.


Advantages of a Tankless Water Heater

A tankless water heater has many benefits, making it an ideal option for households with limited space and continuous hot water access. Some of its benefits are:

● Heats Water Quickly: It heats water quickly, as it doesn’t have to wait for the storage tank to fill up or reheat. This water heater provides hot water within seconds of turning on the faucet.

● Energy Savings: Tankless water heater heats water only when it’s needed instead of storing hot water in a tank where it can later get cold if not immediately used.

● Suitable for Limited Space: A tankless water heater requires not more than 2 square feet of space for installation. It can be mounted on a wall or installed under a sink or in a closet. They are smaller than other types of water heaters, making them ideal for small spaces.


Disadvantages of a Tankless Water Heater

Despite its many benefits, it has some drawbacks, which are:

● Multiple Demand Limitation: An on-demand water heater may fail to perform optimally when it has to serve a large household at a time or when many appliances require hot water simultaneously. The flow rate will be reduced across all applications, which can be unsatisfactory.

● Very Expensive: A tankless water heater can be costly. Firstly, it has a high upfront cost and there’s no rebate or incentive to reduce the cost burden.



Differences between a Heat Pump and a Tankless Water Heater

Discussed below is a more detailed comparison of heat water vs tankless water heater, explaining which is better using major determining factors.

hot water heat pump application


Energy Efficiency

Heat pump water heaters are highly energy-efficient, using up to 60-70% less electricity than traditional electric water heaters. This is achieved by extracting and moving ambient heat from the air or ground to heat water, while operating at a COP of 2-4 (meaning it produces 2-4 units of heat per unit of electricity).

Tankless water heaters are highly revered for saving energy. They don’t have storage tanks, so no energy is wasted by keeping hot water in the tank. Hot water stored in the tank might get cold if not used and need reheating. However, their overall energy savings are typically lower than heat pump water heaters in ideal conditions where only the required water is heated.

Performance

Air to water heat pump heaters are available in several sizes and can be configured to meet various family size demands. It comes with a storage tank, guaranteeing that you don’t run out of water when the source suddenly stops working. Also, you won’t have to worry about causing any strain to the heater when you’re using it for several purposes simultaneously.

Tankless water heaters do not have a storage tank to preserve hot water. And it tends to be less reliable when you need hot water for many purposes, such as running the dishwasher while others are taking a shower in their rooms. The heater may not be able to handle the multiple demands efficiently at once. While they work well for apartments and small houses, they may not fulfill the needs of most large households.

Environmental Impact

All heat pump water heaters use renewable energy technology, leading to reduced greenhouse gas emissions. In fact, they can be powered by solar panels to get a lower carbon footprint. These heaters don’t use fuel, meaning there’s no risk of carbon monoxide leaks.

Gas-powered tankless water heaters burn fuel, meaning there’s a potential risk of carbon monoxide leaks. These heaters must be vented to avoid the buildup of carbon monoxide gas, which is invisible and doesn’t smell (you won’t be aware of its presence). It’s a dangerous element that causes oxygen from reaching the brain, resulting in headaches and dizziness.

Upfront Cost

For many of us, cost is an essential factor when considering two items; this includes heat pump water heater vs tankless.

The initial cost of a heat pump water heater often falls between $1,500 to $3,000. Fortunately, these water heaters are eligible for incentives that can minimize the cost burden. For example, the U.S. Inflation Reduction Act offers a 30% tax credit, which can offset 30-50% of the upfront costs. However, incentives are not available in all countries.

Tankless water heaters also have a high upfront cost because they are built with more technological advanced components, such as heat exchangers and electronic controls. They usually cost about $800 to $2,000 and are not eligible for rebates or incentives.

Operational Cost

In addition to upfront costs, the operational cost is another big factor when comparing a tankless water heater vs heat pump water heater.

Tankless water heaters provide hot water only when needed (this is no doubt its best feature). This eliminates standby heat loss when water is stored in tanks. However, they are more costly to operate because they consume more energy when heating water than heat pump water heaters.

Thanks to their heat pump technology, heat pump water heaters use less energy when heating water (a unit of electricity can produce 2-4 units of heat). Also, instead of using electricity to generate heat, it absorbs heat from the surrounding air or ground–again reducing the energy consumed.

Installation and Maintenance

Installing a heat pump water heater is similar to installing a standard tank water heater. If you want to upscale to a bigger heat pump water heater, you can easily make the swap without modifying your house settings. However, it requires more space than the tankless water heater because of its double units (a heat pump and a water storage tank). Maintenance includes annual air filter cleaning, coil inspection, and cleaning of the storage tank.

The installation process for tankless water heaters may involve making changes to your home settings to accommodate the tankless system. This includes upgrading electrical wiring and creating a venting space. Tankless water heaters have no risk of tank corrosion (a common issue in water heaters with tanks). It only requires descaling every 1-2 years to prevent mineral buildup if you live in a place with hard water.

Noise Level

Generally, heat pump water heaters operate more quietly than tankless water heaters, making them suitable for noise-sensitive environments. They don’t rely on burners or combustion to heat water, and no exhaust fan or noise venting area is needed.

While noise is intermittent and brief, occurring only when hot water is needed, tankless water heaters produce higher noise when working.

Lifespan

The final major factor to consider when comparing heat pump water heater vs tankless is how long they last.

Heat pump water heaters last 10-15 years, which is shorter than tankless water heaters. This is due to their mechanical components that wear out. And their lifespan is heavily impacted when used in extremely cold regions, as they struggle to provide enough hot water.

Tankless water heaters can last as much as 15-25 years, with the gas models having a lower lifespan and those operated with electricity having a higher lifespan.


Heat Pump vs Tankless Water Heater: Which One is Better?

High Quality heat pump water heater


The better option is dependent on your specific needs – what do you need the water heater for?

After evaluating the two, it’s obvious that the heat pump water heater wins more categories. It is extremely energy-efficient, suitable for large households, produces lesser environmental impact, lower operating costs with incentives on upfront costs, generates less noise, and is easier to install.

But if you need a water heater with a compact design for a small space, also having a longer lifespan, the tankless water heater is the better option.


Conclusion

We’ve explored heat pump vs tankless water heater – how they function, their pros & cons, as well as their differences. And it has been discovered that heat pump water heaters are generally better, winning most of the determining factors comparison.

To start enjoying more efficient hot water solutions, you can go ahead to order for your custom heat pump water heaters!


FAQs

Is a Tankless Water Heater Worth It?

Not really. While a tankless water heater has a compact design and is suitable for small spaces, and may also last longer, they don’t provide sufficient hot water simultaneously to multiple points. This means they are not ideal for large families or an organizational setting.

Which is Better for a Large Family?

For a large family that requires hot water simultaneously at several points, the hot water heater is the better option. Since it has a storage tank, it’s efficient in supplying enough hot water at steady flow, even under simultaneous usage.



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