Heat pump water heaters are one of the most impactful — and most overlooked — home upgrades for Colorado homeowners. A heat pump water heater (HPWH) uses the same refrigeration cycle as a mini-split to move heat from the surrounding air into your water, rather than generating heat from a resistive element. The result is a water heater that’s 2–4× more efficient than a standard electric resistance unit.

How Heat Pump Water Heaters Work

A heat pump water heater pulls heat from the surrounding air and transfers it to the water in the tank using a refrigeration cycle. In summer, this provides free dehumidification and cooling in the space where the unit is installed (usually a basement or utility room). In winter, the unit draws heat from the ambient air — still more efficient than resistance heating even at cool temperatures.

Energy Savings

A typical Colorado household water heating cost with an electric resistance water heater: approximately $500–$800/year. With a heat pump water heater: approximately $150–$250/year. That’s a savings of $300–$600/year — paying back the cost premium in 3–5 years.

Sizing Your Heat Pump Water Heater

Installation Requirements

• Minimum 700–1,000 cubic feet of surrounding air space (typical basement or utility room)
• Ambient temperature above 40°F year-round (most Colorado homes qualify)
• 240V electrical connection (standard for electric water heaters)
• Condensate drain (produces approximately 1–2 gallons/day from dehumidification)

Xcel Energy Rebates for Heat Pump Water Heaters

Xcel Energy offers rebates for qualifying heat pump water heaters for customers on their electric service. Contact us or visit Xcel’s website to confirm current rebate amounts, which change periodically.

We install Rheem, Bradford White, and A.O. Smith heat pump water heaters alongside our mini-split installations — making it easy to bundle both upgrades in a single visit.

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