Heat Pump Water Heaters

Heat pump water heater
Rheem heat pump water heater (left). Source: Rheem. How it transfers heat from air to water (right). Source: Sierra Club.

The Issue

On average, water heaters use about 18% of the total energy consumed in a home, second only to space heating. Water heaters often run on natural gas, which is a fossil fuel.

You can replace an existing natural gas water heater with a heat pump water heater (HPWH), also known as a hybrid water heater. HPWHs run very efficiently on electricity by removing heat from the air to heat water. A good HPWH uses 60 to 70% less energy than a conventional electric water heater.

The Home Depot 5% Discount Program

Home Depot sells Rheem HPWHs, which are rated as the most efficient on the Canadian market. We have negotiated a 5% discount with Home Depot, on the following models:

Unit CapacityHome Depot ArticleRheem ModelList PriceDiscounted Price
40 gallon1001610398701365$2,950$2,802.50
50 gallon1001586346701374$2,799$2,659.05
65 gallon1001610399701364$3,499$3,324.05
80 gallon1001610400701346$3,899$3,704.05

Further information on the Rheem HPWHs available through Home Depot is found here.

How to order

To get the 5% discount email Candace Peck (candace_peck@homedepot.com) with the following information and copy netzero@harbordvillage.com:

  • Subject: Net Zero Rheem hybrid heat pump water heater purchase
  • Your name and contact information
  • Model number and capacity information for the unit you wish to buy
  • Indicate that you were referred by the NetZero Carbon Project.

Candace will contact you, find a local store, process your payment and arrange for delivery or pickup in store.

She can also arrange installation through Home Depot contractors, if desired. However, this does not guarantee that the installer has experience installing HWHPs. (Ask Candace if the one she recommends has this experience.)

Other brands are available at wholesale to plumbers who do the installation. Given the newness of HPWHs, it is desirable to select a plumber with experience installing them. When choosing a HPWH be sure to check the efficiency, space requirements, plumbing needs, and noise rating.

Issues To Consider

While very efficient, and efficiencies vary, HPWHs are not for everyone. The following matters need to be considered to see if one could be right for you:

HPWH installation in general

  • HPWHs must be installed where they can draw heat from the air and so must be in a space that is over approximately 15 degrees Celsius all year and has a sufficient volume of air around it. They expel cool, dry air as part of their normal operation. In a damp basement, this dehumidification would be welcomed. In a heated basement the cool air will increase the heating load in winter but provide air conditioning in the summer
  • HPWHs produce water condensate that needs to run into a drain
  • The pump creates noise, so it is important to know the noise rating of the unit and what will be acceptable in the proposed location
  • HPWHs generally need a 240 volt electrical supply
  • Given the newness of HPWHs in Ontario, many plumbers don’t have experience installing them

Installation specific to Rheem HPWHs, according to Rheem technical advisors

  • The unit needs at least 700 cu. ft. of space around it. However, it can be installed in a smaller space with fully louvered doors, or even in a closet with specific requirements for the air flow
  • The space in which the unit is installed must be at least 13 degrees C. all year
  • Non-vented units need around 6 ft. of ceiling height–the height of the unit plus 6 in. of clearance above it for maintenance
  • The condensate pipe must be of PVC, led downward to the drain, and have a trap at the tank to allow the line to be flushed

Refer to the Rheem HPWH specification sheets for additional details. If you have technical questions not answered in the specifications contact Rheem HPWH advisors at 1-800-995-0982.


The retail cost for a HPWH ranges from $2,500 to $3,900, depending on the tank size, features and manufacturer. Installation is an additional cost with estimates ranging from $600 to $800. Most heat pump water heaters are not sold by retail stores. They are bought and installed by plumbing contractors, and the total installed cost is anywhere from $3,500 to $8,000.

The high cost of a HPWH, compared to the low cost of a natural gas or conventional electric water heater, means that a HPWH will only generate savings in the long run. But, if removing a gas water heater enables your home to go off gas entirely, additional savings will come from no longer having to pay the distribution charges found on all gas bills.

Grants and Loans

HPWHs are eligible for a grant of up to $1,000 from the Canada Greener Homes program. To be eligible, you must complete a program application, which could take one to two months for approval, and then arrange for a home energy audit. The cost of these water heaters can be covered by the $40,000 interest-free loan from the Greener Homes program and/or the $125,000 low interest loan from the City of Toronto’s Home Energy Loan Program (HELP).

For additional information about the rebate and loan programs—as well as the required home energy assessment—visit the Net Zero Project’s Home Retrofit Programs page.

Most recent update: 12 April, 2023