Heat Pump Water Heaters: What They Cost, How They Work, and When to Upgrade

If you’re looking for a more energy-efficient way to heat water in your home, a heat pump water heater (HPWH) is one of the most cost-effective technologies on the market today. Unlike traditional electric or gas water heaters that generate heat, a heat pump water heater moves heat, making it significantly more efficient.

In this guide, we’ll cover:

• How heat pump water heaters work

• Benefits and limitations

• Cost and efficiency factors

• When it might be time to switch

• What to expect during installation

• What homeowners are saying

• Frequently asked questions

• Why Paschal is the trusted choice for HPWH installation

What Is a Heat Pump Water Heater?

A heat pump water heater uses electricity to transfer heat from the surrounding air into a water storage tank. Instead of generating heat directly like conventional electric resistance water heaters, it works more like a reverse refrigerator—drawing warmth from the air and using it to heat water.

Because of this heat transfer process, HPWHs are 2 to 3 times more efficient than standard electric water heaters, according to the U.S. Department of Energy.

How Do Heat Pump Water Heaters Work?

Heat pump water heaters use a fan and evaporator coil to absorb heat from ambient air and transfer it into a water tank:

• Warm air is drawn in and passed over an evaporator coil

• Heat from the air is absorbed by refrigerant

• The refrigerant is compressed to increase temperature

• The hot refrigerant transfers heat to the stored water

• Cooler air is exhausted into the surrounding space

Most systems come as all-in-one units with a storage tank and a backup electric heating element. In some cases, a heat pump can be retrofitted to an existing water heater tank.

Benefits of a Heat Pump Water Heater

Energy Efficiency

HPWHs use up to 70% less energy than traditional electric models, according to ENERGY STAR.

Lower Monthly Bills

That efficiency translates into real savings—typically $425 to $550 per year.

Environmentally Friendly

They move heat instead of burning fuel, reducing your home’s carbon footprint.

Long-Term ROI

Most systems pay for themselves in 2 to 5 years.

Cost of a Heat Pump Water Heater

Looking to spread out the cost of your upgrade? Paschal offers flexible financing options to make your new energy-efficient water heater more affordable.

Actual pricing may vary based on the size of your unit, your home’s layout, and installation requirements.

Signs It’s Time to Switch

• Your water heater is over 10 years old

• You’re running out of hot water frequently

• Your tank is noisy, leaking, or rusted

• Your water looks cloudy or smells metallic

• Energy bills are rising

• You want better efficiency or rebate eligibility

Why Choose Paschal for Your Heat Pump Water Heater?

Paschal Air, Plumbing & Electric installs and repairs heat pump water heaters across Arkansas, Texas, Oklahoma, and Missouri. We don’t believe in one-size-fits-all—every installation is tailored to your home, family, and budget.

Our Water Heater Options Include:

• Traditional tank systems (gas/electric)

• Tankless water heaters

• Hybrid heat pump water heaters

We’ll help you:

• Choose the best-fit system

• Ensure proper sizing and venting

• Handle permits and rebates

• Deliver expert installation and long-term support

Explore your water heater options with Paschal

Real Reviews: Why Homeowners Trust Paschal

Real homeowners count on Paschal for expert heat pump diagnostics, repairs, and full system replacements. Here’s what some of them had to say:

“Paschal recently came out to inspect our failing heat pump and make recommendations for replacement. We have a split level with an additional detached room that needed heating and air conditioning. They listened to our requirements and provided multiple options with pricing. All our questions were answered quickly and thoroughly. The work was very professional, and all staff we encountered were knowledgeable and friendly.”
—Riggan Shilstone, Facebook Review

“Met with Tommy today while he was servicing my heat pump. He was very friendly and knowledgeable about his profession and willing to share that information with me while he was on site.”
—Jeff Amadon, Facebook Review

“Paschal saved the day when my smart thermostat and heat pump configuration stopped cooperating. We were able to get a same-day appointment, and they worked easily around my schedule. Chris, the technician, was fast, knowledgeable, and friendly. I’ll use Paschal for all my home heating, cooling, and plumbing needs in the future.”
—Claire Zimmerebner, Facebook Review

“Geoff and the team helped us through the full replacement of our heat pump, coil, air handler, and duct system. We now have a balanced system that heats and cools properly, runs quietly, and was professionally installed. I was a difficult customer at times, but they handled everything with professionalism and patience. We’re very happy with the results.”
—Jason Wiggs, Google Review

See more reviews on Google or Facebook

Frequently Asked Questions

How long do heat pump water heaters last?
Typically 10 to 15 years with regular maintenance.

Do they work in cold climates?
They are best suited for areas that stay above 40°F. Installation in basements or near furnaces improves performance in colder regions.

Are they noisy?
They produce a soft hum, similar to a refrigerator or box fan.

Do I need a professional to install one?
Yes. Proper sizing, venting, and code compliance are critical. Paschal’s licensed team ensures safe, efficient installation.

Ready to Upgrade Your Water Heater?

If your current system is aging or underperforming, now is a great time to consider a heat pump upgrade.

• Save up to 70 percent on energy use

• Get expert installation from Paschal’s licensed professionals

Explore your water heater options or call us today to schedule your estimate.

Need financing? We’ve got options that fit your budget.