Electric Heat Pump
Heat pump water heaters operate on the same principle as space conditioning heat pumps, moving rather than creating heat. Powered by electricity and using the same refrigeration process used by your air conditioner or refrigerator, they remove heat from the surrounding air and reject it into the water in a storage tank. Because they are simply moving heat from one place to another as opposed to creating the heat directly they are generally two or three times more efficient than resistance electricity. During the warmer months, heat pump water heaters located inside the home have an added advantage: they cool the air that passes over their heat exchanger coils just like an air conditioner. This feature has made them popular in commercial kitchens and in warm climates where the cooling is appreciated year ‘round. Because their initial cost is usually higher than other alternatives, they have had limited the acceptance in residential settings.
Heat pump water heaters come in two varieties. One variety is an add-on to an existing storage water heater. The other is called integral because the heat pump is incorporated into the storage tank making it one unit.