Hot water heat pumps
Sales of heat pump water heaters are exploding, thanks to a reputation for being the most efficient and eco-friendly way to heat water.
It appears that the glory days of the trusty hot water cylinder may be on the wane, bumped aside by its upstart young cousin – the heat pump water heater (HPWH).
We’re all familiar with the heat pump space heaters, now ubiquitous throughout New Zealand as an efficient, convenient and relatively cheap method of heating our homes. The same technology has now arrived with respect to hot water, with excellent results when your power bill arrives.
Globally, sales of heat pump water heaters are the fastest growing water heater. Here in NZ the industry is steadily growing with increased confidence in the performance of the products as a result of an EECA subsidy program, and favourable reports from Consumer Magazine, BRANZ and Parliamentary Commissioner for the Environment.
Heat pump water heaters move heat from the air to the water in the tank instead of generating heat directly via an element.
The working principle is very similar to a refrigerator
“An average HPWH is three to four times more efficient than conventional electric water heaters.”
but in reverse, generating heat – not cooling. An average HPWH is three to four times more efficient than conventional electric water heaters. Consider that 30% of the average power is dedicated to heating water, and do the maths.
There are two main types, an ‘all-in-one’ (or integrated system) and a ‘split system’.
An all-in-one system has the heat pump attached to the top of the storage tank and a split system has the heat pump separate from the tank – generally outside.
All-in-one systems are available for both indoor and outdoor locations and are a good option when renovating, building new or replacing your old cylinder, whereas a split system can be retrofitted to your existing tank provided it is not too old.
Add it up
Heat-pump water heaters cost more at the outset than a standard electric water heater. Therefore, they require the initial capital cost to be recovered through energy savings, which is in proportion to the amount of hot water used by the purchaser. For households with a low hot water usage, it may well mean that your payback period is simply too long and you’re better served by conventional water heaters. For moderate-to-high users though, payback times will be relatively short.
Split systems pricing ranges from $2,500 to $4500 depending on size and brand. If the system cannot be plumbed into your existing hot water cylinder (generally those installed before 1988) you’ll need to either pay for a new one ($750 - $1500) or opt for an all-in-one system.
All-in-one systems (which include the tank) cost between $2400 to $4500, plus installation. All-in-one systems must be ducted outside to release cold air and moisture.
In calculating the cost-effectiveness, payback and return on investment of these systems compared to other water heating options, it is common to take out the “sunk costs” of installing or replacing a standard hot water cylinder, for example plumbing and electrical labour. In the case of All-in-One systems, this also means taking out the cost of a standard electric element cylinder which is between $1100-$2000. In these cases, the extra (marginal) cost of a heat-pump water heater is between $1000 - $3000. This extra cost is rapidly recaptured due to the high efficiency and cost savings of the unit.
Return on investment (ROI)
The ROI depends on the marginal cost of the system, and the quantity of hot water being used. In a new build environment, the payback period can be 1-3 years for a family of four or more. An annual energy saving of $600 – $700 is readily achieved, and can increase by $200 – $300 per additional resident.
In a retrofit environment, where an existing tank needs to be replaced, or the hot water system is being upgraded to mains pressure, the marginal cost is around $800 - $1000, which can provide a payback of 18 months to 2 years.
The marginal ROI for a family of four renovating or building a new home can range from 40-60% pa. When integrated with Solar Power (PV), a heat pump water heater can increase the ROI of the Solar Power System from 10 to 30% pa for a combined system.
Combined with a solar PV system, which provides the electrical energy needed to heat your water during the day, savings can be even greater.
Many companies offer statements which describe “savings up to” however what is considerably more realistic are the companies which guarantee at least a minimum level of performance. Ask for that guarantee.