Split Heat Pump Water Heaters Are Having a Moment, Spurred on by Innovation Prize

Heat pump water heaters, which pull heat from the surrounding air to warm water, save energy but usually need extra height and airspace to work. That's rarely a problem in a basement or garage, but it can rule them out in apartments, condos, and manufactured homes where the water heater sits in a tight closet. A new wave of "split" heat pump water heaters aims to fix that by moving the compressor outside the unit, so it can sit outdoors or elsewhere while a slimmer tank fits into the small space.

Split models aren't new. The SanCO2 has been sold in the US since 2015 and is well regarded for efficiency, but it costs around $5,300, well above the roughly $2,000 or less for standard heat pump water heaters. Two more companies, Ecological and A. O. Smith, have brought split models to market in the past year, offering tank shapes suited to tight closets. Their arrival is tied partly to a competition called the Hot Water Innovation Prize, run by the Northwest Energy Efficiency Alliance, which is pushing manufacturers to build compact, lower-cost split systems. A winner will be announced in August.

None of this requires action if your current water heater fits fine. But if you live in a smaller home where a standard heat pump water heater wouldn't fit when it's time to replace your water heater, these new split models, and whatever comes out of the prize, may open up options that weren't available before.