Rogelio Alvarez

By: Rogelio Alvarez on September 20th, 2023

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Tankless Water Heaters vs. Heat Pump Water Heaters

Tankless Water Heaters | Heat Pump Water Heater

For decades, conventional tank-style water heaters have been the standard in older and newly constructed houses. Within the last couple of years, two types of water heaters have been growing in demand by homeowners and praised by technicians. Tankless water heaters and heat pump water heaters are being installed in homes across Los Angeles and the surrounding areas, but is one preferable to the other?

Since 2007, we at Monkey Wrench Plumbing, Heating & Air have assisted homeowners with finding, installing, and maintaining a water heater that best suits their houses. Whether it’s heat pump water heaters or tankless water heaters, we’ve worked with the top brands to break down how these two units compare. 

To help review the differences between tankless and heat pump water heaters, we’ll look at how they compare in the following categories. 

  • Water heating technological design
  • Energy efficiency
  • Cost differences 
  • Maintenance 

By the end of this article, you can use the information gained to help narrow your search for a water heater that is ideal for your home and your family’s hot water needs. 

Let’s get ready to set go!


What’s the Difference Between Tankless and Heat Pump Water Heaters?

Tankless water heaters and heat pump water heaters are different systems designed to provide residential and commercial buildings with on-demand hot water. These systems are intended to heat water but differ in how they heat water, energy efficiency, costs, and maintenance. 

Heat pump water heaters first appeared in the market in 2009, whereas tankless water heaters have existed for decades. In recent years, manufacturers have sought out different ways to improve the design of their tankless and heat pump water heaters. One of the simplest ways to tell these water heaters apart is how they can heat water. 


Water Heating Design

Both water heaters are intended to heat water, but how they’re designed is very different. Here’s a summary of how tankless water heaters and heat pump water heaters work. 

  • Tankless water heaters: These water heaters are powered by gas, electricity, or a combination of both. Whenever hot water is needed, these water heaters use an energy source to power the heat exchanger. The heat is then applied to the water and heats it to a set temperature as it is dispensed throughout a home. Instead of storing and constantly heating water, tankless water heaters heat water continuously. 
  • Heat pump water heaters: In terms of appearance, heat pump water heaters differ from tankless due to their tank-style shape. Heat pump water heaters run on electricity and absorb the ambient warm air. The heat from the air is separated and used to heat water. These water heaters rely on the surrounding temperature to heat water but also have an electrical heating element that kickstarts whenever there isn’t enough heat in the air around it. 

When we look at hot water output, tankless and heat pump water heaters use different ratings. Heat pump water heaters are rated by their different gallon sizes. Tankless water heaters are rated by how many gallons of hot water they produce in a minute (GPM). 

Heat pump and tankless water heaters rely on a home’s layout, number of hot water fixtures, and its hot water usage to determine which size water heater can meet its hot water demands. 

Apart from their differences in how they heat water, tankless and heat pump water heaters also have some of the best energy efficiency in the water heating industry.


Energy Efficiency 

Heat pump water heaters are three to five times more efficient than tankless water heaters. They both require less energy than a standard water heater, however. 

To help break down the energy efficiency comparisons between water heaters, manufacturers rate water heaters using the Uniform Energy Factor (UEF) rating. These ratings help make it easier for homeowners to compare different water heaters based on how much energy they require to heat water for a home. Here’s how tankless and heat pump water heaters compare in energy efficiency ratings. 

  • Tankless water heaters: Tankless water heaters have a .91 to .99 UEF rating thanks to their technological ability to consume energy only when hot water is needed for a fixture. This makes tankless water heaters more efficient than standard water heaters, which constantly consume energy to maintain water at a set temperature.

Despite having good UEF ratings, tankless water heaters aren’t as energy efficient as heat pump water heaters.

  • Heat pump water heaters: Thanks to its heat pump technology, these water heaters have a UEF rating of 4.0. The higher the UEF rating, the more energy-efficient a water heater is. Heat pump water heaters also use up to 75% less energy than a standard electric-powered tankless water heater. 

With California lawmakers discussing an initiative to ban gas-powered water heaters by 2030, energy-efficient alternatives like tankless and heat pump water heaters will only grow in demand. For homeowners looking to plan ahead, comparing pricing between tankless and heat pump water heaters can help narrow down the search for a new water heater. 


Cost Comparison 

Heat pump water heaters cost between $9,500 to $13,000, whereas tankless water heaters are priced lower at $4,500 to $8,500. Both price ranges also factor in installation, but other factors can affect the final price. Some of these factors include.

  • Brand
  • Capacity/Sizing
  • Parts required for an installation
  • Water filtration (optional)
  • Additional modifications 

Tankless and heat pump water heaters have higher upfront costs than standard water heaters, but both can provide long-term savings. These two water heaters can save a home hundreds of dollars in energy cost savings. Besides savings, tankless water heaters and heat pump water heaters qualify for California rebates and federal tax credits. 

Choosing to install a tankless or heat pump water heater is an investment. One way to ensure that homeowners make the most of their investment is to keep their tankless or heat pump water heater properly maintained. 



Maintenance for a tankless and heat pump water heater is similar, with a few differences. Both water heaters should be flushed by a technician once or twice a year. A water heater flush helps remove any accumulated sediment buildup in the water heaters. 

A yearly inspection on a tankless and heat pump water heater can help ensure that water connections and valves are tight and not loose. These units may also attract dust and can have their external surfaces wiped down.

Unlike tankless water heaters, heat pump water heaters have an air filter that should be inspected and cleaned at least once a month. With proper maintenance, a heat pump water heater can last 10 to 15 years. On the other hand, tankless can last between 15 to 25 years before needing to be replaced. 

In addition to routine maintenance, tankless and heat pump water heaters can benefit greatly from water filtration to help improve water quality and remove any impurities. 


Is a Tankless Water Heater or Heat Pump Water Heater Right for Me?

We broke down the differences and similarities between heat pump water heaters and tankless water heaters. This newly gained knowledge can give you an advantage as you narrow your search for the right water heater for your home. 

For over 15 years, we’ve kept up with the latest advancements in the water heater industry to help break down the different water heater options for homeowners. We understand that every home is different, which is why we’re able to break down comparisons between heat pump and tankless water heaters. 

If you’re interested in any of these two water heaters, contact us using one of the buttons below. You can also book an appointment with a certified technician through our online scheduler.

If you are exploring other options besides tankless and heat pump water heaters, we recommend learning about the pros and cons of tank-style water heaters. Learning about other water heating alternatives lets you determine which water heater is best for you.