Short answer
A heat pump water heater typically uses 60% to 70% less electricity than a standard electric tank, so it pays off best in homes that heat water with electricity, oil or propane. It works well in most Canadian basements, but it cools and dries the space around it, which helps in summer and adds a little to your heating load in winter.
Key takeaways
- Heat pump water heaters typically move 2.5 to 3.5 units of heat for each unit of electricity, versus about 1 for an electric tank.
- Savings are largest when replacing an electric, oil or propane tank, and smaller against natural gas.
- They need space, a nearby drain for condensate, and a room that stays above about 5 to 10 °C.
- In a basement they cool and dehumidify the air, which is a bonus in summer and a small cost in winter.
- Installed cost typically runs $2,500 to $5,000, so check rebates before you buy.
Heat pump water heaters in Canada are one of the better efficiency upgrades for homes that heat water with electricity. Instead of heating water directly with an element, the unit pulls heat from the surrounding air and moves it into the tank. That typically cuts water heating electricity by 60% to 70% compared with a standard electric tank.
Water heating is usually the second largest energy use in a Canadian home after space heating. If you are on an electric, oil or propane tank that is near the end of its life, a heat pump water heater is often worth it. Against a natural gas tank, the case depends on your local prices.
How efficient are heat pump water heaters?
A standard electric tank turns one kWh of electricity into roughly one kWh of heat. A heat pump water heater typically delivers 2.5 to 3.5 kWh of heat per kWh of electricity in real use, depending on the air temperature around it and how much hot water you draw. Most models also have backup electric elements for high demand, and running in hybrid or heat-pump-only mode keeps efficiency high.
A typical family of four uses roughly 3,000 to 4,500 kWh a year to heat water with an electric tank. A heat pump model can bring that down to roughly 1,000 to 1,600 kWh.
Typical annual cost comparison
The table uses a typical household's hot water use and approximate prices. Your bill will differ, so use the appliance calculator to plug in your own numbers.
| Water heater type | Ontario (approx.) | Nova Scotia (approx.) | Quebec (approx.) |
|---|---|---|---|
| Standard electric tank (about 3,800 kWh) | $650 | $740 | $320 |
| Heat pump water heater (about 1,300 kWh) | $220 | $250 | $110 |
| Natural gas tank (about 450 m³) | $215 | $560 | $280 |
Based on approximate all-in rates of $0.17, $0.195 and $0.085 per kWh and $0.48, $1.25 and $0.62 per m³ of gas. Gas tank figures exclude any fixed monthly gas charge.
The pattern is clear. Against an electric tank, a heat pump model typically saves $200 to $500 a year. Against gas in Ontario, savings are close to zero. Where gas is expensive, such as Nova Scotia or New Brunswick, the heat pump model can win. Homes on heating oil, at about $1.65 per litre, usually save the most.
Placement in a Canadian basement
Most Canadian installations go in the basement or utility room. A few conditions matter.
- Space. Units are taller than standard tanks and need room for air to circulate. Many manufacturers ask for a space of roughly 700 to 1,000 cubic feet, or ducting to a larger area.
- Temperature. The surrounding air should stay above about 5 to 10 °C, depending on the model. Unheated garages in most of Canada are too cold in winter.
- Drain. The unit produces condensate, so it needs a floor drain or condensate pump nearby.
- Power. Most models need a 240 V circuit. Some newer 120 V plug-in models suit homes replacing a gas tank without a spare circuit.
- Noise. The fan and compressor hum at about the level of a dehumidifier. Avoid placing it right beside a bedroom.
The cooling and dehumidifying effect
A heat pump water heater pulls heat out of the room and puts it in the water. That cools and dries the air nearby.
In summer
This is a bonus. Many basements are damp, and the unit acts like a free dehumidifier. You may be able to run your standalone dehumidifier less. See our dehumidifier running cost guide.
In winter
The heat it takes from the basement has to be replaced by your heating system. With a heat pump for space heating, that replacement heat is cheap. With electric baseboards, part of the water heating savings is offset. In most homes the net result is still a clear saving, and the basement may run a degree or two cooler.
What do heat pump water heaters cost?
Installed cost typically runs $2,500 to $5,000, compared with about $1,200 to $2,500 for a standard electric tank. The difference is what you pay back through savings. Against an electric tank saving $300 to $400 a year, simple payback on the price difference is often 4 to 8 years. Most units carry 10-year tank warranties.
Rebates change often. Check our rebates page and your provincial program, such as CleanBC Better Homes, Efficiency Manitoba, Hydro-Québec LogisVert, NB Power, Efficiency Nova Scotia, efficiencyPEI or takeCHARGE NL, and confirm current amounts.
Is a heat pump water heater right for you?
- Good fit: electric, oil or propane tank near the end of its life, a basement with space and a drain, and two or more people at home.
- Weaker fit: cheap natural gas, a small closet install, or very low hot water use.
- Plan ahead: replace before your old tank fails, since an emergency swap usually means a like-for-like tank.
If you are planning a bigger change, such as switching from oil heat to a heat pump, consider the water heater at the same time.
Frequently asked questions
Do heat pump water heaters work in Canada?
Yes, when installed indoors in a space that stays above about 5 to 10 °C, such as a basement. They do not suit unheated garages in most of Canada.
How much does a heat pump water heater cost in Canada?
Installed cost typically runs $2,500 to $5,000. Check provincial and utility rebates, which change often.
Will a heat pump water heater make my basement cold?
It cools the space around it, often by a degree or two. In summer that helps, and in winter your heating system makes up the difference.
Is a heat pump water heater cheaper than gas?
It depends on your prices. In provinces with low gas prices, such as Ontario, running costs are similar. Where gas is expensive, such as Nova Scotia, the heat pump model usually costs less to run.
Want numbers for your own home?
Use the appliance energy calculator with your province's prices and climate. It takes about two minutes.