Let’s examine the events and timeline that paved the way for heat pump water heating, which began with early refrigeration methods. In 1748, William Cullen was spending his days toying with the innovation of a small refrigerator machine. Working in the United Kingdom, he used a pump to create a partial vacuum in a container filled with diethyl ether, lowering its boiling point and causing it to boil, thereby capturing heat from the surroundings. This led to the formation of small quantities of ice.

Although this invention didn’t succeed commercially, it still planted the seed of heat pump technology that would revolutionize the water heating industry centuries later.

The rise of the first HPWHs (1945-1950)

Post-WWII, heat pump technology innovation accelerated across the U.S. and the U.K. In 1945, John Summer in Norwich (U.K.) developed the first large-scale heat pump system. However, not all successful innovations find their footing on their first attempt. Despite this heat pump’s efficiency and effectiveness, the market was still dominated by low-cost equipment using affordable coal and natural gas sources.

Meanwhile, in the U.S. around the same time, American inventor Robert C. Webber had his moment. Webber was an Indianapolis Power and Light Co. employee with a keen eye and a deep freezer at the time. Webber was experimenting with his deep freezer (https://tinyurl.com/abm64dbn) to effectively store meat for more extended periods without it spoiling. During this experiment, he touched the outlet pipe, and as he did so, he realized that heat was expelled from the freezer, almost burning his hand.

He understood that the freezer was not losing heat, but moving heat outside. He effectively capitalized on this waste heat, and used it for water heating by connecting the outlet pipe to a water boiler, and also utilized the dissipated heat for space heating. The positive results and insight ultimately led to the invention of the first functioning ground-source heat pump.

Catching stride (1950-1980)

By 1950, the nascent technology of HPWHs was no longer a mere theory or an accidental discovery. This new technology began to capture the attention of manufacturers and researchers as an emerging solution for water heating.

The 1950s proved to be a significant decade for HPWHs. Some studies suggested the seeds of HPWHs sprouted in the central and eastern U.S. market around the early 1950s. Some credit Hotpoint (later a division of GE) and Harvey-Whipple Co. for introducing the first mass-market of HPWHs.

During this period, the inventions, innovations and patents received additional support from utilities and the National Rural Electric Cooperatives Association. The utility industry’s “Heat Pump Water Heater Steering Committee” even conducted field testing of about 30 units in the early-1950s, and NRECA carried out similar testing in the 1970s. The energy crisis of the 1970s proved to be a driving force, helping to renew interest in HPWHs. NRECA and DOE developed a HPWH prototype and produced 100 units for field testing conducted by 20 utilities.

Additionally, the Dairy Equipment Corporation International entered the HPWH market with a “Heat Transfer Concept and a Refrigerant Heat Recovery Unit.” This concept was initially developed for the dairy industry’s constant need for heating and refrigeration. After initial testing of the first product line, a glass-lined storage tank encased with a waffle heat exchanger, proved highly successful in the dairy industry, accounting for about 90% of units sold to dairy farmers and resulting in more than 20,000 installations by the mid-1980s.

This success led to the establishment of Therma-Stor Products Group, which aimed to adapt and further evolve this efficient heat transfer technology for non-agricultural consumers. It soon became standard equipment in supermarkets and restaurants, earning design and energy conservation awards. Therma-Stor’s residential HPWH units, developed in 1980 and tested according to DOE standards, achieved a COP of 3.1-3.5, reducing water heating costs by 70%. They also developed a 52-gallon, 100 CFM prototype (HPV-52) of a ventilating HPWH.

Market setbacks (1980-2008)

The promising results of testing in the 1970s carried the hope of HPWHs into the 1980s, with 17 manufacturers entering the market.

But every good story goes through a series of twists and turns. By the end of the decade, 17 manufacturers had dwindled to three. The market share plummeted dramatically to a meager 0.2%, with annual sales of 11,000 units. The decline continued in the 1990s, with prominent manufacturers such as Rheem and State quietly exiting the HPWH market.

By 1990, with only two manufacturers, HPWH sales dropped from 10,000 units to a low point of 2,000 units.

The turn of the century saw attempts to revive the moribund HPWH market. In 1999, a collaborative effort between the California Energy Commission; New York State Energy Research and Development Authority and ECR International led to the development of the ‘Watter$aver’ product. This early stand-alone HPWH was evaluated in a 2002 study by Steven Winter Associates in partnership with Connecticut Light & Power. The study observed an average effective COP of 1.67.

Although customer satisfaction was generally positive, with feedback on the benefits of dehumidification, there were consistent issues, including excessively hot water (sometimes exceeding 150 degrees due to tank stratification) and frequent shutdowns caused by high-temperature safety switches. The product ultimately exited the market due to these performance problems and a lack of service infrastructure. Then, in 2003, the DOE funded a project for Carrier’s CO2 refrigerant (R744), which developed 13 prototypes, but reportedly failed in commercialization.

The setbacks continued into the early 2000s, with some manufacturers, such as Bosch, Electrolux, GE and Westinghouse, exiting the market due to discontinued HPWH models. At this point, the HPWH market had only one manufacturer making integrated units. Two others were making add-on units, i.e., HPWHs that connect to an existing water heater tank. However, these efforts ultimately proved unsuccessful in the long run. Furthermore, the housing market collapse of 2006-07 added to the tide of market disappointments.

United in struggle

The uncertainty and market fluctuations were not limited to the residential sector alone—similar disruptions were also felt in the Commercial HPWH market. Swimming pools are another application area for commercial HPWHs. But despite this sector having decent coverage across homes and hotels, the number of manufacturers declined—from 13 in 1989 to about five by 2009.

Following the footsteps of the residential market, some early studies reported that commercial HPWHs became available in the market around the 1960s. However, unlike the residential segment, there is limited documentation available to depict the state of the commercial HPWH market between 1960 and 1990. During the 1990s, the market saw annual sales of approximately 2,000 to 4,000 units, supported by more than 14 manufacturers. However, this stable market crumbled in the following decade. By 2002, only two manufacturers remained and sales dropped below 1,000 units.

Outside of the market fluctuations, there were some positive interventions. The 1990s saw several successful field tests. One such test led to installing 45 units in restaurants and laundromats, with reported payback periods ranging from 9 months to 5 years.

HPWH Revival (2009-2020)

But after decades of uncertainty, the HPWH story finally had a turning point with the intervention of ENERGY STAR in 2009. ENERGY STAR first certified HPWHs as an energy-efficient product that year, and this was enough to breathe new life into this product category.

According to an early ENERGY STAR report, sales increased from 2,000 units in 2006 to 14,600 units in 2009, and the number of certified HPWH models skyrocketed to 23 by 2010. During this time, many stakeholders began to recognize the importance of HPWHs and joined forces to promote their adoption. The National Appliance Energy Conservation Act of 2015 also boosted the sale of HPWHs.

To further accelerate the market transformation of HPWHs, The Advanced Water Heating Initiative, a member coalition, was established in 2019. Around the same time, NEEA expanded its Northern Climate Specifications to Advanced Water Heating Specification. This expanded specification included five tiers, adding new product categories: split systems (2017), 120V and gas HWPH (2019), and commercial, multifamily, and industrial systems in version 8.0, released in 2022. These collective efforts led to a slow and steady growth for HPWHs, increasing their sales from 23,000 units in 2011 to 190,000 units in 2023.

Decade of lift-off (2020-2030)

The 2020s have seen a dramatic increase in technologies, manufacturers, policies and sales. HPWHs are poised for lift-off.

The early years of the decade saw the introduction of new technologies, including 120-volt plug-in HPWHs, split-system HPWHs, Central HPWHs with thermal storage, and others. Policies and regulatory bodies are now stepping in to further strengthen the acceleration of HPWH, with Air quality agencies passing “Zero NOx” regulations phasing out combustion water heaters (2023) and DOE’s new water heating standards for electric resistance water heaters (2024), effectively requiring HPWHs for electric water heaters over 35-gallon water heaters in 2029. More manufacturers are entering the market every year, and HPWHs have become the fastest-growing water heater type, with a 35% growth in 2023 to 190,000 units.

The history of the heat pump water heater has been a testament to perseverance. From accidental discoveries to innovative research, from market soars to crash landings, this technology has weathered numerous ups and downs. It has emerged to bring the 21st century closer to efficient, low-cost water heating.