Heat Pump Water Heater for under $300?!

Upgrading home performance for less…

Efficient home upgrades have the reputation of being expensive and therefor difficult to attain.  Heat pump water heaters are no exception.  Webinars and articles abound touting the benefits, meanwhile cautioning the high up front costs paid back quickly in lower operating costs if you’re able to put up the initial investment.
We purchased our current home in 2015 which included a 5 year old existing gas water heater.  Due to its low age, we put it on our list for a future upgrade and fuel swap.  The water heater and other mechanicals are located in our finished basement.  Like most basements, this mechanical room also included a portable dehumidifier to control excess humidity.  In 2020, the dehumidifier died requiring a purchase which would be $300 to replace with an identical dehumidifier.  This presented an opportunity as our gas water heater had now reached its design life of 10 years, and we had been increasingly interested in switching to a heat pump water heater for its dehumidifying side benefits.  We easily chose the heat pump water heater upgrade, solving two problems at once: providing humidity control to the basement and preventatively replacing the water heater.
With the decision made, we researched available rebates and began shopping.  This is when things got exciting!  In our Atlanta market, Georgia Power offers a $250 rebate and there was a $300 federal tax credit, for a total of $550 in possible rebates.  But wait, it gets better!  This was leading up to Memorial Day, so Home Depot had Rheem 50 gallon models on sale for $999.  Seeing the stars had clearly aligned, I grabbed a 15% off coupon for Home Depot and headed straight to my local store.  After all sales, discounts, and rebates we scored a Rheem heat pump water heater for just under $300 (pre-tax), the same price as a replacement dehumidifier. The price breakdown and our sales receipt are below:
 $999.00 Memorial Day sale price
-$149.85 15% coupon
-$250.00 Georgia Power rebate
-$300.00 Federal tax credit
 $299.15 Same price as portable dehumidifier
HPWH Receipt

HPWH Receipt

Of course $300 didn’t get the water heater installed and operating, but even the total cost was less jarring than you might imagine. Let’s compare the total cost to install this heat pump water heater versus the cost to simply replace with another gas water heater. Replacing your existing gas water heater with an identical model typically costs around $1,000 for the new water heater, parts, and labor.  For the swap to a heat pump water heater our costs were: $924.72 for the water heater, $675 for install and plumbing changes, plus $100 for electrical work, a total $1,699.72 initial investment.  But don’t forget the $550 in rebates, which lowered the cost to $1,149.72.  Just a bit over $100 more than the cost of staying with gas, plus the added benefits from the heat pump model: dehumidifying and cooling the ambient air.
To check available rebates and credits in your area, visit dsireusa.org.
Does our example encourage you to check rebates and prices in your area?