Using a well designed heat pump water heating system will have a dramatic effect on your home’s carbon footprint, and could help provide significant savings on your energy cost.


A Heat Pump Water Heater (HPWH) is a hot water heater that transfers heat from the surrounding indoor air (or the outdoor air, if the HPWH is connected to the outdoors by vents) into a hot water tank, which is typically located in an open, unfinished basement or garage. This heated water is then piped throughout the home to showers, dishwashers, sinks, and washing machines. Because heat is transferred instead of generated (i.e., by burning fossil fuels or using an electric resistance tank), heat pump water heaters can be three times more efficient than conventional water heaters.


Operating costs can be up to 50% lower than the operating costs of an electric, oil, or propane water heater.

Wi-Fi integration in some models enable you to remotely control and monitor your water heater.

Heat pump water heaters are robust, and can last much longer than conventional water heaters.

Incentives for Heat Pump Water Heaters

Mass Save HEAT Loan

If you’re installing a heat pump water heater, you may be eligible for a 0% interest HEAT Loan from Mass Save. You can finance up to $25,000 over the course of 7 years for home energy efficiency upgrades. Although fuel prices fluctuate, for most projects the energy savings will help cover the monthly loan payments. Find out more about Mass Save’s HEAT Loan program.

Alternative Energy Credits

Heat pump water heater system installations in Massachusetts qualify for the Alternative Energy Certificate (AEC) program. With this program, non-emitting renewable technologies generate certificates based on their energy production. These certificates are sellable to utility companies looking to meet state-mandated renewable energy goals. The revenue earned from these certificates will help you to further save on your solar hot water or air source heat pump installation. Learn more about AECs.

Rebates & Tax Credits

Massachusetts leads the nation in energy efficiency and has many incentives and rebates available to help make clean heating technologies affordable, including a rebate of up to $1,500 for heat pump water heaters that is scheduled to expire on December 31, 2023. Learn more about rebates available from Mass Save. The federal government offers a tax credit of up to $2,000 for heat pump water heaters and possibly a rebate of up to $1,750. Learn more.


A heat pump water heater has two primary components: a heat pump, which absorbs heat from the surrounding air, and an insulated storage tank, which stores heated water for later use. To heat water, (1) a fan draws air from the surrounding space across a coil filled with cold, low-pressure refrigerant. The refrigerant absorbs heat from the air and is compressed (2) into a hot vapor. Coils containing the heated refrigerant wrap around the hot water tank, transferring heat into the stored water (3). Once the refrigerant loses heat and has condensed back into a liquid, the process repeats. If the heat pump can’t meet the hot water heating needs of the home (due to high usage or the space becoming too cold for sufficient heat absorption), backup electric resistance elements (4) can boost the temperature of the water as needed.

By pulling heat from the surrounding air, heat pump water heaters also provide dehumidification to the space in which they are located. Just how much dehumidification the system can offer depends on how much hot water a household uses: the more the system is used, the more heat and humidity it will pull from its surroundings. For this reason, most Massachusetts homeowners prefer to install heat pump water heaters in unfinished basements, saving energy due to more efficient hot water heating and reduced dehumidifier usage—though a heat pump water heater won’t entirely replace your dehumidifier.


Your Guide to Heat Pump Water Heaters


Here are some helpful videos to get you started.