Finally, a heat-pump water heater that plugs into a standard outlet

How a public-private collaboration brought a key climate-change-fighting tool to market: an efficient 120-volt water heater that can be easily installed in homes.

A Rheem ProTerra 120-volt heat pump water heater plugged in next to a furnace
120-volt heat pump water heaters that can plug into a standard outlet, like this Rheem ProTerra, could make electrifying homes much simpler and cheaper. (New Buildings Institute)
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Last month’s launch of Rheem’s ProTerra 120-volt heat pump water heater might not seem like a big step forward in the fight against climate change. In terms of home electrification accessories, it’s not as sexy as a rooftop solar array, Tesla Powerwall battery or Ford F-150 Lightning electric pickup truck. 

But to home electrification policy wonks, an efficient electric water heater that can plug into a standard wall socket is a major advance in getting U.S. households off fossil fuels. It’s also an example of what climate activists, policymakers and big businesses can accomplish when they work together. 

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That’s how Panama Bartholomy, executive director of the Building Decarbonization Coalition, described the multiyear effort that has enabled major U.S. water heater manufacturers to fill a big gap in the U.S. electric appliance lineup. 

Back in October 2018, Bartholomy’s group and fellow nonprofit New Buildings Institute gathered state policymakers, utilities and representatives of major U.S. water heater manufacturers at a conference in San Francisco to start tackling a problem that was impeding California’s building decarbonization goals: More than nine in 10 of the 14.5 million water heaters in California homes burn fossil gas. Few of those homes are wired for 240-volt heat pump water heaters, which were the only models available at the time. Asking homeowners and contractors to undertake expensive rewiring or electrical panel upgrades to support these more power-hungry replacement units could have triggered pushback from customers and contractors, and left many smaller homes or renters locked out of the market altogether. 

So we pulled together over 100 people and worked for six months on a specification for a retrofit-ready’ heat pump water heater,” Bartholomy said. The goal was to provide a clear signal to companies that their work on a novel product would bear fruit, or as he put it, to do some trust-building — the basis of any good relationship.” 

Now, more than three years later, that trust-building has paid off. Rheem’s ProTerra is expected to be followed by the launch of 120-volt heat pump water heaters from A.O. Smith, General Electric and Nyle over the coming year, said Amruta Khanolkar, senior project manager at the New Buildings Institute.

There are about 118 million residential water heaters nationwide, and more than 50 percent of them are using fossil fuel for heating water,” she said. About 7 million water heaters are replaced every year in the country, and those customers need a solution to easily plug in.” 

The Advanced Water Heating Initiative, a group of building industry professionals, utilities, government agencies, manufacturers, installers, advocates and researchers, is taking this collaborative approach to the next set of home electrification challenges, Khanolkar said. 

That includes ongoing work in California, where regulators are on the cusp of ordering the phaseout of gas-fueled heating over the next decade. It’s also spreading to other parts of the country that are about to gain access to the billions of dollars in home electrification tax credits and incentives in the Inflation Reduction Act. 

There are absolutely other regions that are interested in these technologies,” she said — and not just because they can help reduce carbon emissions, but because they’re far more efficient than the models they’re replacing. 

Heat pump water heaters: Cheap to run, costlier to wire

Rheem isn’t a stranger to heat pump water heater technology, said Ashley Pincott, the company’s product marketing manager for heat pump products. In fact, it’s been making them since 2009, primarily as replacements for older resistance electric heaters. 

Heat pumps work like air conditioners in reverse, using condensing liquids to move temperatures from outdoors to indoors — a far more efficient way to heat water than directly heating metal coils as resistance heaters do. Heat pumps are also more efficient than burning fossil fuels to heat water, making them a no-brainer” for utility-bill-conscious homeowners, she said.

A diagram of how heat pump water heaters work
A diagram of how heat pump water heaters work, including air intake (1), compressor (2), heating element (3) and digital controls (4) (New Buildings Institute)

The latest heat pump models have also proven they can keep water hot even when temperatures drop below freezing outside. Still, up until now, most of Rheem’s products have been designed as hybrid” models with electric resistance elements that can kick in for customers in colder climates, Pincott said — and those models require 240-volt outlets.

Many homes have 240-volt outlets for electric clothes dryers or central air conditioning. Some parts of the country use lots of older electric heating systems that require these outlets as well, making those homes easier targets for heat pump water heater replacements. But most homes lack 240-volt wiring in the closets, basements and other places where water heaters go. 

Khanolkar estimated the costs of upgrading those homes could run between $1,000 for running a new circuit to several thousand dollars more if the home’s electrical panel needs to be upgraded as well. Even in the lowest-cost areas” — such as the Midwest — trivial wiring upgrades would be $500, minimum,” she said. 

In the meantime, advances in heat pump technology have made it possible to run on less power while still providing enough hot water on demand to satisfy customers, she said. If you size it correctly, then 120-volt is a perfect solution for lower-occupant, lower-demand households.” 

The new ProTerra models retail for between $1,900 and $3,150, depending on their water tank capacity and how much compressor power they need to heat that water. 

Rheem undertook some careful engineering to ensure that its 120-volt model would perform as promised, Pincott said. The company also conducted education and outreach with contractors and plumbers, who are ultimately responsible for selling and installing a product that meets homeowners’ expectations, she said. On that front, the feedback has been positive, even from contractors who aren’t working in places with mandates like California’s, she said. 

One of them saw this 120-volt plug-in, and he was like, Wow, I don’t have to do any electrical work, I don’t have to do a gas line. This would be great for a home addition. You just drop it, plumb it, plug it and go.” 

Coordinating public policy and private industry 

However, none of this guarantees that a multiyear investment in designing, manufacturing and marketing a brand-new product line will pay off for manufacturers. 

This technology, like any emerging technology, was experiencing this chicken-and-egg problem,” Khanolkar said. Without a real product, the utilities would not provide incentives” to cover the extra upfront cost for heat pump water heaters compared to gas-fueled versions. And without the demand generated by incentives, manufacturers would not fully invest in the product. 

That’s why the Building Decarbonization Coalition chose to engage early” in 2018 with Rheem and other water heater makers on getting prepared for California’s electrification policy push, Bartholomy said. They saw that there were the right people at the table who were going to ensure that the policy changes would be made and that the program would be deployed in a way that would ensure the demand would be there for them.” 

California’s ongoing policy actions helped keep up the confidence…to stick with the project,” he added. Those policies included heat pump incentive programs aimed at contractors as well as homeowners, along with a statewide building code that set heat pump water heaters as the standard for efficiency. 

Now, with the first 120-volt water heaters being installed in test homes, the Advanced Water Heating Initiative is working with utilities and state agencies on a field study to determine how well the systems perform and how much money they can save over time, Khanolkar said. Proving out the cost-saving and load-shifting capabilities of these new water heaters will be important in getting policymakers, regulators, utilities, retailers and contractors in other states to support them.

Cost savings depend greatly on utility electricity and gas rate structures, as well as whether customers can get paid for making their electric water heaters available to help reduce strain on the power grid, she noted. Don’t forget that water heaters act like thermal batteries,” she said, using cheap electricity to heat water and then turning off and using that stored hot water when electricity is in short supply and rates are higher. 

Utilities in California and across the country are tapping into this water heater storage capability through rates and incentives. The latest water heaters, like Rheem’s ProTerra, come equipped with digital communications ports to support more fine-tuned control, Pincott noted. That could make them valuable tools to reduce grid strains as buildings and vehicles shift from fossil fuels to electricity, as must happen to reduce carbon emissions fast enough to forestall the most catastrophic harms of climate change, Khanolkar said. 

Meanwhile, the kind of public-private collaboration that’s gotten 120-volt water heaters into the market is being expanded to broader home electrification projects, according to Bartholomy. He cited a recent letter, signed on to by major water heater and HVAC manufacturers as well as a roster of climate change and environmental justice groups, calling on California regulators to work with them on complementary finance, workforce, and housing policies” to support new appliance standards expected to go into effect in the latter part of the decade. 

Manufacturers typically operate on five-year cycles,” he said. How can you build trust and act on the market and policy changes that are necessary to give them confidence to move forward?”

Jeff St. John is director of news and special projects at Canary Media.