Hybrid Electric Water Heater | TESLA OWNER

I recently installed a hybrid heat pump water heater to replace a gas water heater.  As one of the early adopters of an electric hybrid heat pump water heater, I learned a lot during the process about the technology.  Hybrid electric water heaters are great in the mild California climate for a larger house. In about seven years, the cost of the installation (with some local generous rebates) will be paid back in about seven years. In much colder locations or much smaller homes, alternative technologies may be better choices.

Hopefully this article will help you understand the technology, the installation process, and the benefits.

Rheem brand Hybrid Electric Water Heater

Hot Water Household Needs

Before installing any a hot water heater, the most important question to ask yourself is “How does your household use hot water?”

  1. Showers and baths -YES. A minimum of 120°F is generally recommended to avoid legionnaires disease.
  2. Washing clothes – Generally NO. Most clothes wash fine in tepid water and last longer.  In special circumstances you may wish to wash with hot water — cleaning reusable diapers or if someone in the household is sick.
  3. Dishwasher – Generally NO.  Most modern dishwashers have water heating elements in them.
  4. Hand washing – Generally No.  From the CDC:  “Use your preferred water temperature – cold or warm – to wash your hands. Warm and cold water remove the same number of germs from your hands. The water helps create soap lather that removes germs from your skin when you wash your hands. Water itself does not usually kill germs; to kill germs, water would need to be hot enough to scald your hands.”
  5. Scrubbing pots and pans – Sometimes YES.  Like hands pots and pans do not require hot water but hot water can loosen up grease or tough areas that requiring scrubbing. 
  6. Other hobbies and interests – Maybe. Perhaps for some special hobby that requires hot water?

In looking at this list, a typical household only needs hot water during a short period of the 24 hour day.  The primary need is while taking showers with perhaps small usage during meal preparation.

But most households have a large giant pot of boiling water ready to be used 24/7 at their convenience.  Have you ever used a gallon of hot water at 3am? How much energy our world is using for this perhaps excessive convenience?

Methods to Heat Water 

Gas Water Heaters

Almost all homes in California have a water heater powered by gas located in a garage, a mechanical room, or a utility closet.  These water heaters are heated using natural gas and are kept running 24/7 at a constant desired heat.  The vast majority of gas hot water heaters have a mechanical dial allowing you to turn down the hot water when gone for extended periods of time. But because of the remote location, a household cannot realistically adjust the knob multiple times a day.  A small nascent market exists so that you could control the timing of the water heater by installing a wifi dial on the control knob, but I do not personally know anyone who has installed such a device.

Electric Water Heaters

Electric water heaters come in a few different kinds of configurations.  The type I chose to install is a hybrid hot water heater that contains both a heat pump and an electrical resistant unit.  

Heat Pump

A heat pump water heater is in a sense a refrigerator in reverse.  A refrigerator pulls heat from a box and pumps it out into the room it sits in.  A heat pump pulls heat out from the surrounding air to heat the interior of the box (or water in this case).  Both appliances have small fans and should have similar noise levels.  Because both devices move heat around instead of generating cold or heat, they are very efficient.

Heat pumps although very efficient do not heat up hot water very quickly and typically can take 2-3 hours if completely cold around 60°F to achieve a 120°F.

Heat pump water heaters work great in warmer climates (or rooms) that remain in the 40°-90°F range year around and have a decent amount of air space around them. Each water heater has an air space requirement. The model shown for example cannot be put in a small closet but can work fine in a large mechanical room or garage.

Electrical Resistance Water Heater

Electrical Resistance Water heaters have a tank of water with a simple heating element submerged inside.  Electricity is used to heat up the element and subsequently heat up the water.  Because electricity is used to generate heat, electric resistance heating is significantly less efficient than a heat pump.

Hybrid Water Heater

For a central hot water heater, a hybrid electric option is also available that contains both a heat pump and an electric resistance element.

Tankless Water Heater

A tankless electric water heater operates in a similar manner to an electric resistance water heater but without a tank.  Water is heated exactly when used without any tank at all.  A tankless system can operate faster than a heat pump and can be used as an on-demand hot water heater in a bathroom. 

A central tankless water heater would not work well for a large house with a lot of water pipes.  Each time you want to run the hot water you will need to drain out a lot of water (or heat up all your recirculating water) before reaching the hot water itself.  So in general not a practical solution for a large house.

Recirculation Pumps

For any hot water heater located in a central location, a small recirculation pump is installed nearby in order to provide hot water directly to the faucets when needed.  These recirculation pumps are needed for gas water heaters and electric water heaters (resistance, heat pump, or hybrid) but not for tankless water heaters located in individual rooms.

Recirculation Pump


Peninsula Clean Energy (PCE) is the non-profit energy provider in San Mateo County.  PG&E still provides the infrastructure to deliver the energy, but residents can choose PCE as their electricity provider. PCE’s energy is 100% renewable and slightly lower in cost than PG&E.  Even with solar panels, a homeowner still has a contract with an energy provider unless they are completely off grid.

The San Francisco Bay Area has a lot of separate municipalities.  Most people are probably familiar with the 3 largest cities:  San Francisco, San Jose, and Oakland.  The Bay Area actually has 101 different towns and cities.  These municipalities work together in the Association of Bay Area Governments (ABAG).

During 2021, PCE was offering a rebate of $1500 for the installation of an electric water heater to replace any gas water heater.  On top of this generous rebate, ABAG (through its affiliation with BayREN) offers an additional $1150 — for a combined rebate of $2650.

Installation Process

Encouraged by this generous rebate, I contacted a local contractor to inquire about this process.  Because of the incentive program, the steps are well organized with a list of recommended contractors who are familiar with the process.

Replacing a gas heater with an electric one requires both an electrician and a plumber.  The electrician needs to connect it to an outlet with sufficient electricity.  Luckily the mechanical room had a breaker panel with extra plugs available making this part of the process almost trivial.

The plumber took considerably more time and actually had a three person crew.  The process included draining the old water heater, removing the water heater, capping off the old gas line and chimney pipe, installing the new water heater, installing a new recirculation pump, and adding earthquake straps.

The exact water heater is a 50-gallon Ruud Heat Pump Water Heater, Model #  PROUH50 T2 RU375-30.  My first impressions was that this thing was great.  Fit in fine and it was quiet.  Unfortunately, the unit became quite noisy when configured correctly.


When the heat pump was in operation, the unit was extremely noisy.  The noise traveled through the mechanical room into the house and could be heard about 20 feet away inside the house.  The noise is a bit hard to describe and kind of more like a squeal than anything else.  

When a water heater is first installed there can be some air in the pipes that can cause this squealing but after turning on all the faucets in the entire house, air in the pipes was ruled out as a cause of this noise.

After a lot of time spent with the sales person from Rheem, the plumbers returned and replaced the fan.  Rheem admitted to trying to save money by using an inexpensive fan in a number of their units and unfortunately made the unit very noisy.  At the same time, the plumbers also installed a vibration reduction plate in the unit.  These changes vastly improved the level of noise.  

Cheap fan that was causing all the extra noise

The new recirculation pump also had some noise issues and they replaced the recirculation pump with another model.  

During this time the contractor and Rheem were quite responsive and the unit was functional.  After about a month and at no additional cost, the unit was working fine with a completely acceptable noise level.

Water Heater Application

The first noticeable change with the water heater was the ability to control it completely through an app.  I was very excited about this feature and played with it before the electricians left to make sure it worked.  The first step is to configure it to connect to wifi. The application is reasonably straightforward but there is not any real documentation on how it works.   A few of the features are a bit strange but it is a powerful tool and allows you to relatively easily monitor your usage by the day, month or year.

Heat Modes

The unit has four heat modes and the names are non-intuitive.  

Off — completely off

Energy Saver — an algorithmically tuned approach using both the Heat Pump and electric resistance to use the least amount of energy possible

Heat Pump — only using the heat pump but this mode will use more energy than ‘Energy Saver’

High Demand — a mode that warms up water as fast as possible.  The energy use is quite high per minute but it is a valuable mode to get hot water produced fast.

Electric — uses only the electric resistance feature.  This mode is very silent but uses a lot more energy than any other mode

Vacation — a mode that is good for colder climates where pipes can freeze if the unit is left off.

Custom Scheduling

The app is quite powerful and you can customize your schedule any way you want.  Here is a sample Sunday schedule where the heater is completely off except for the two hours between 11am to 1pm on a Sunday.  At any time you can interrupt the schedule and change the operation.  For example if you need to take a shower unexpectedly in the evening, you might want to change the mode to High Demand to be able to take a shower say in 30 minutes instead of waiting a couple of hours.

I attempted to calculate the net energy used to create water hot enough for a shower, showering, and then turning off the unit completely. In the Energy Saver mode during the warmer summer months, the heater takes about 1 1/2 – 2 hours, and maybe about 30 minutes in High Demand mode. To accurately test the energy usage in these scenarios is quite difficult, but with a small amount of testing I didn’t find High Demand mode used in this fashion to be wasteful. But one would need to be careful to turn the unit Off immediately after showering. In a sense, High Demand mode can be thought of as ‘on demand’ heat in an unusual situation; this ‘on demand’ heat however does require a wait time of about 30 minutes.


You can see how much energy is used daily, weekly, monthly and yearly in the app.  One very odd usage is that every four hours the unit uses a mysterious amount of energy that adds up to 0.85kWh/day.  I asked Rheem about this mysterious waste of energy and have of yet not heard back from Rheem.

For the first three full months of usage, the total average monthly usage was 62kWh/month. As a Tesla owner that is about one tankful of electricity or about 200 miles worth of energy.  Another strange way to interpret the data is that each day the hot water heater uses about 6 miles of energy.

I expected the electric bill to go up after installing the hybrid water heater but in fact it has not.  The heater is programmed to warm up water only a few hours a day with the most efficient setting and then turned off. The energy consumption has been surprisingly low in fact so far basically unnoticeable and some months the household unexpectedly used less electricity than last year.

Energy Used by Old Gas Water Heater

The house is warmed through a radiant floor using a natural gas boiler for several months a year. Natural gas is also used for the gas stove and an outside gas barbeque.  The best estimate of average yearly usage of the gas water heater was about 67 therms /year for an annual bill of close to $500.


Because both plumbing and electricity are involved, your municipality will likely require a permit and an inspection.  The building inspector literally spent about 5 minutes on site having only done a handful of these inspections before.  He glanced at the electrical panel and saw that the gas connection was removed and was on his way.  The permit cost $78.


The total bill was $5950 + $78 permit fees.  Which was a total of $6028

Three rebates included $1000 (PCE), $500 (PCE) and $1150 ABAG

Net cost $3378

Since the incremental electric cost is so minimal, the cost should recouped in 7 years with 3 years left on the warranty.

Replacing Other Appliances?

Although the process was slightly painful because of the noise, the electric water heater is a clear win in both costs in the long run and for the environment. The house also uses gas for two additional purposes:  cooking and heating the house via the radiant floor.  Cooking both inside and outside on the barbeque uses minimal gas.  Heating the house even with the efficient radiant heating method uses significantly more gas than heating water.

The same contractor I used for the heat pump also gave me a vague estimate of $20,000 – $30,000 to replace the boiler with a heat pump.  This heat pump requires a 3’x3’ space and cannot be in the mechanical room due to lack of air space for the heat pump itself.  Because of that restriction the large estimate is primarily the need to move the equipment outside or potentially in the garage.

But with the negative experiences of a noisy heat pump and the high cost, I have chosen to wait for someone else to successfully replace their boiler with a heat pump.  I would want to do a site visit and listen to the heat pump.  Unlike a hot water heater, the heat pump for the house would be running during a reasonable amount of time during any given day. Also as the climate has been significantly warmer in the last few years during the winter months, the heating requirements have gone down significantly this year.

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