As more businesses and homeowners turn to heat pump water heater (HPWH) systems to increase energy efficiency, manufacturers say it’s important for contractors and adopters to familiarize themselves with tech trends and the ways that HPWH systems differ from traditional water heaters.

According to a report from the Business Research Company, the global heat pumps market size is expected to grow from nearly $100 billion in 2024 to $156.59 billion by the turn of the decade, with growth being driven by new energy efficiency regulations, rising energy prices, urbanization and building regulations and consumer demand for sustainable solutions. Major trends in the forecast period include hybrid heat pump systems, decarbonization initiatives, heat pump electrification, smart heat pump technology and the growing popularity of cold-climate heat pumps.

The report states that new policies in the United Kingdom and United States aimed at improving energy efficiency will continue to boost demand for renewable energy sources in the coming years, contributing to the growth of the heat pumps market. It notes that the United Kingdom recently formed an Energy Efficiency Office to monitor, coordinate and develop energy conservation policies, while industries in the United States are required to report energy conservation and consumption efforts to the Department of Energy for guidance on how to reduce their carbon footprint. The Department of Energy also recognizes the need for homeowners to make the switch to more efficient electric heating by investing $250 million in manufacturing heat pumps, among other measures.

Due to such shifts in recent years, major companies involved in the heat pumps market are developing new eco-friendly products to gain a competitive edge.

“Favorable measures to reduce carbon footprints are expected to propel the growth of the heat pumps market going forward,” the report reads. “Additionally, government incentives, green building standards, and consumer awareness further promote the adoption of heat pumps as a sustainable choice. As individuals, organizations and governments seek to mitigate climate change and reduce carbon emissions, heat pumps offer an attractive solution for lowering their environmental impact while also benefiting from cost savings and regulatory compliance.”

How HPWH systems differ from traditional water heaters

Jonathan Baggett, applications supervisor at Lochinvar, says that while newer heat pumps are not necessarily more difficult to install and adopt than traditional gas-fired water heaters, the technology can require a different set of knowledge, which “comes with a learning curve.”

“One of the most important things to know when specifying heat pump water heaters is that the sizing and storage requirements differ from traditional gas-fired water heaters,” Baggett says. “Traditionally, gas water heaters are sized to handle peak load times, resulting in the need for a larger capacity unit. With heat pump water heaters, we advise to size the storage tank to handle peak demand. The heat pump can then use the off-time to refill the tank, which then fuels the next peak load time.”

Eric Ashley, a spokesperson for Noritz, emphasizes the importance of proper sizing when installing heat pump water heater systems. While requirements vary by model, most need to be 700 to 1,000 cubic feet of air volume. If the space is too small, ducting may be necessary.

“A common issue occurs when replacing gas water heaters with heat pumps of the same tank size, as heat pumps have different recovery times and output volumes. For example, a 40-gallon gas water heater should typically be replaced with a 65-gallon heat pump model to ensure comparable performance and customer comfort,” he says. “Another critical consideration is whether the home has sufficient air volume to support the heat pump.”

It’s important for contractors to understand that heat pump water heaters require a certain amount of space in order to function properly. Megan Konieczka Darr, product manager at A. O. Smith says, "Factoring in space requirements is critical for contractors when they are specifying a unit to ensure that the heat pump water heater can work as intended. Thankfully, most heat pump water heaters do allow for flexible installation thanks to their ability to be ducted into a system."

Tom McConahay, senior manager and national plumber support manager at Rheem Manufacturing, says that at their core, HPWHs combine two technologies: a traditional electric resistance water heater and a heat pump mounted on top, creating an all-electric hybrid system.

While some associate "hybrid" with dual-fuel systems, he said, HPWHs strictly use dual technologies, not multiple fuel sources.

“Unlike standard electric resistance water heaters, which can be installed in almost any location, HPWHs have specific air circulation requirements,” he says. “They extract heat from the surrounding air, so they need adequate space for proper airflow. Additionally, because heat pumps generate condensation as a byproduct, installers must account for condensate management.”

Konieczka Darr explains that heat pump water heaters are not more complex, they just require a different knowledge set. "The installation process for a heat pump water heater is relatively similar to installing an electric water heater, installers just have to account for condensate drainage, and potentially ductwork—which should be relatively easy for most contractors to handle."

HPWH systems also require some additional maintenance, according to McConahay. He says regularly cleaning the filter ensures optimal heat exchange and prevents dust buildup that makes systems less efficient.

“Beyond that, standard water heater maintenance practices, such as flushing the tank to remove sediment, still apply,” he adds.

Gregg Holladay, business development manager for special markets at Bradford White, says regular inspections for replacements are also imperative.

“Inspecting and replacing every few years can add years to the life of the tank if used in hard water markets, which happens to be most of the country. Bradford White recently introduced a new replacement segmented anode for areas with low overhead clearance to keep this simple.”

Education and training resources for adopters and contractors

Heat pump manufacturers like A. O. Smith, Lochinvar, Noritz, Rheem and Bradford have all launched several training and education resources for contractors and adopters to help ease the transition to newer heat pumps.

Among such resources is Lochinvar’s LochinvarU program, which features on-demand video tutorials for quick, in-the-field learning. In addition, the company also offers in-depth, in-person training at the company’s facility in Lebanon, Tennessee.

“Lochinvar also regularly invites engineers to tour our facilities and learn more about our heat pump water heating technology,” Baggett says.

A. O. Smith University is home to a plethora of resources, and the company recently added a HPWH certification. "This certification is designed to prepare contractors to work with heat pump water heating technology and provide them with the knowledge they need to feel confident in their work," Konieczka Darr says.

Contractors can also access comprehensive training programs at Noritz, where the company’s sales and training teams regularly conduct educational classes on various water heating solutions, including tankless and heat pump systems.

“No matter the product type, the same tools and support are available,” Ashley says. “Our website is a valuable resource, offering technical documentation, manuals, installation guides, and product details to help users understand heat pumps and other water heating solutions.”

Similarly, Bradford offers both virtual training and in-person training events regionally and at the company’s live-fire lab, iTEC, in Middleville, Michigan, where contractors can learn the ins and outs of Bradford’s products.

“Our products are for professional installation only and therefore, we’re committed to providing the training, tools and resources contractors need to be successful in the field,” Holladay notes.

In addition, contractors can access more in-depth training through Rheem’s Rheem Academy program, which offers several online and in-person courses tailored to industry professionals.

“Through online and in-person sessions, contractors can deepen their expertise on Rheem products, including HPWHs, and stay ahead of industry advancements through flexible learning,” McConahay says.

“A common misconception is that servicing a heat pump water heater requires multiple trades, but Rheem’s units are intentionally designed as a one-trade solution. They’re built to be plumber-friendly, with all HVAC-related components sealed and non-serviceable,” he continues. “If an HVAC-related issue arises, the unit is replaced under warranty—avoiding the need for an HVAC technician.”