Commercial HPWHs
Credit: Blue Fern Productions
Market transformation efforts have focused heavily on developing the residential HPWH market, but there are also many opportunities for commercial buildings to adopt central and light commercial HPWHs. The complexity of commercial buildings requires nuanced sizing, selection and installation. Central HPWHs offer many configuration options, and light commercial HPWHs can provide a simpler alternative.
Types of Central and Commercial HPWHs
Credit: Blue Fern Productions
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Central heat pump water heaters (HPWHs) are high-efficiency systems designed to serve multiple dwelling units or commercial facilities from a centralized location. By using ambient air or waste heat to generate hot water, they significantly reduce energy use and greenhouse gas emissions compared to conventional gas or electric resistance systems. Central HPWHs can be integrated with thermal storage and advanced controls to shift loads off-peak and support grid reliability. These systems are well suited for multifamily, hospitality, healthcare, and institutional buildings.
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Small commercial heat pump water heaters (HPWHs) include unitary systems up to approximately 120 gallons and split-system configurations designed for light commercial applications such as quick-service restaurants, offices, grocery stores, and small retail buildings. These systems provide an efficient, low-emissions alternative to gas and electric resistance water heating by leveraging heat pump technology in compact, scalable formats. Small commercial HPWHs can be installed in new construction or retrofits and paired with basic or advanced controls to optimize performance and reduce operating costs.
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Packaged Central heat pump water heaters (HPWHs) are integrated systems that combine heat pump, storage, and control components into a single factory-assembled unit typically on a skid. These systems are designed to simplify installation, reduce on-site commissioning requirements, and improve reliability through standardized configurations. Packaged HPWHs are well suited for multifamily and commercial applications where space, labor, and construction timelines are constrained. By delivering consistent performance and streamlined integration with building systems, packaged HPWHs help lower project risk and reduce energy use. Their modular design also enables scalable deployment and easier compliance with evolving energy codes and utility programs.
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High-temperature commercial heat pump water heaters are advanced systems capable of producing hot water above 180°F, enabling applications such as hydronic space heating, industrial process loads, and, in some cases, low-pressure steam generation. These technologies expand the reach of electrification into sectors traditionally dependent on fossil fuel boilers. By leveraging advanced refrigerants and multi-stage compression, high-temperature heat pumps can deliver reliable, efficient performance at elevated temperatures. Although still an emerging market, active field demonstrations across the country are validating system reliability, integration strategies, and cost-effectiveness. As deployment increases, these systems are expected to play a critical role in decarbonizing commercial and industrial thermal energy use.
AWHI Commercial HPWH Resources
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Report:
2025 State of the Heat Pump Water Heater Market Report
NBI’s Advanced Water Heating Initiative (AWHI) has released its annual Heat Pump Water Heaters State of the Market Report. This in-depth report offers an overview of the latest in both commercial and residential heat pump water heater (HPWH) innovation in the U.S. and explores policy, technology and other market forces accelerating adoption across the industry.
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Photos:
HPWH Photo Repository
Download from a collection of commercial and residential heat pump water images and diagrams.
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Factsheet:
Market Assessment for High Temperature Heat Pump Water Heaters
This fact sheet examines the current landscape of high-temperature heat pump water heater technologies and summarizes available equipment, typical use cases and building types, expected costs, and key barriers to adoption.
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Case Study:
Housing Hilltop: A Central Heat Pump Water Heater Model for Affordable Communities
This case study looks at the the Housing Hilltop project in Tacoma, Washington, demonstrates a Central Heat Pump Water Heater (CHPWH) system to address these challenges and create a sustainable and economical hot water solution for affordable housing communities. Tacoma Housing Authority, which built and owns Housing Hilltop, sought to install CHPWHs to ensure families who have been or are at the risk of being displaced, have an equal access to healthy living spaces while reducing energy cost burden.
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Factsheet:
Central Heat Pump Water Heaters (CHPWH) in Affordable Multifamily Housing
This fact sheet outlines the details of a CHPWH install in the Housing Hilltop project in Tacoma, Washington. It describes the design rationale, system components and capacity, and project timeline. Learn some of the most important actionable takeaways and best practices to maximize efficiency.
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Factsheet:
A Brief History of Heat Pump Water Heaters (HPWHs)
This factsheet outlines the evolution of heat pump water heaters, tracing their roots back to 18th-century thermodynamic discoveries by pioneers like Willem Cullen and Lord Kelvin. With a streamlined graphic, it highlights early innovations, market struggles during the late 20th century, and eventual breakthroughs such as the ENERGY STAR certification in 2009. Steady growth continued through the 2010s, supported by national initiatives like the Advanced Water Heating Initiative (AWHI). By the 2020s, HPWHs became significantly more efficient and began gaining mainstream adoption, driven by updated regulations and improved technology.
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Report:
Central Heat Pump Water Heater Market Research (2023-2025)
System Types, Market Size, and Key RegionsThis report provides an overview of the currently available technologies and product types for central heat pump water heaters (CHPWHs). Analysis highlights crucial components affecting the potential CHPWH market. The first section discusses the various components of CHPWHs and the primary market delivery methods. It also delves into more than a dozen market-ready heat pump products. The second section explores the potential for CHPWH market penetration based on American multifamily housing demographics. The third and final section analyzes regional economics and building stock concerning central water heating systems. (2025)
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White Paper:
Increasing Equitable Access to Heat Pump Water Heaters
This paper aims to share data about current methods and programs to overcome barriers to the adoption of heat pump water heaters in low-to-moderate income households and disadvantaged communities. These barriers include high initial costs, the split incentive between landlords and tenants, technical constraints, workforce challenges, and local policy barriers. The paper outlines opportunities and considerations to help ensure that those who cannot afford HPWHs or have other barriers preventing their installation are not left with the negative impacts of gas-fueled and electric resistance water heaters. The ultimate goal of these programs is to realize long-term energy savings, emissions reductions, and financial benefits for LMI people and across disadvantaged communities. (2024)
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Resource Guide:
The Why, What, and How of Successful Heat Pump Water Heater Programs
Heat Pump Water Heaters (HPWHs) can deliver significant energy savings, substantial cost savings, and dramatic reductions in air pollution. However, Low- to Moderate-Income (LMI) households and members of disadvantaged communities often lack access to the benefits that HPWHs can deliver. Fortunately, some current and emerging programs have found ways to improve the equitable distribution of HPWHs.This guide discusses the need for and the benefits of HPWHs in LMI households and across disadvantaged communities. It also provides a summary of current successful and emerging federal, state, and regional HPWH programs. This guide was released in parallel with the paper “Increasing Equitable Access to Heat Pump Water Heaters” . Contact us to learn how you can get started in your community. (2024)
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Report:
Mitsubishi Heat20 Hot Water Load Shift Demonstration and Simulation Analysis at Bayview Towers
Read this report that culminates several years of collaborative work between BPA, Ecotope, Mitsubishi, SkyCentrics, and Steffes to introduce the first load shift capable commercial HPWH system to the United States, featuring the HEAT2O. The Bayview Tower project retrofitted an aging electric resistance water heating system in an occupied, 100-unit, affordable housing high-rise. The new commercial heat pump water heating system at Bayview Towers marked the first U.S. installation of Mitsubishi's HEAT2O (QAHV) system – the country's first large-capacity CO2 refrigerant-based domestic water heating system. (2023)
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CHPWH Resources:
Factsheet: The Best Solutions Come in Easy-to-Use Packages
Central heat pump water heater (CHPWH) systems can serve the domestic hot water needs of a building in one central plant.Case Study: Project Spotlight, Low-Rise Multifamily
Two Small Planet Supply WaterDrop packaged skid systems now serve a disability and elder care facility, which was previously served by two separate gas water heating plants. To learn more about CHPWHs visit betterbricks.com/solutions/water-heating. (November 2023) -

Report:
Central Heat Pump Water Heaters for Multifamily Supply Side Assessment Study
NEEA contracted with NBI in January 2021 to conduct research and outreach to better understand the current landscape of central heat pump water heater (HPWH) adoption in multifamily buildings. Research objectives included 1) Identifying all primary barriers to central HPWH adoption, 2) Increasing understanding of the value propositions (i.e., drivers) for each market actor in the central HPWH supply chain, and 3) Gathering market actor feedback to understand the most effective pathways to increased market adoption of central HPWHs. Research activities included fielding an online survey targeting specifiers and installers and conducting a series of interviews across the supply chain. (January 9, 2023)
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Report:
Increasing Sustainability of Multifamily Buildings with HPWHs
Utilities and policymakers are increasingly looking to technologies such as electric heat pump water heaters (HPWHs) to help cut carbon and other greenhouse gas (GHG) emissions from buildings while providing other benefits such as grid flexibility. This new report, by NBI and ACEEE, includes a national assessment and analysis of the potential for HPWHs to improve the sustainability of existing multifamily buildings by reducing energy consumption and carbon emissions. (November 2021)
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Website:
Betterbricks Central Heat Pump Water Heaters Resource Page
This website provides information about the benefits of central heat pump water heaters, as well as related resources, news and case studies.
Commercial & Central HPWH Resources
This resource repository supports broader use of CHPWHs in multifamily and other buildings. Sort resources by clicking on the column headings. Let us know if you have resources to recommend.
| Resource Title | Topic | Source | Date |
|---|---|---|---|
| Advanced Water Heating Specification Version 8.1 | Commercial HPWH A Specification for Residential, Commercial/Multifamily, and Industrial Water Heaters and Heating Systems | Northwest Energy Efficiency Alliance (NEEA) | 2024 |
| Commercial HPWH Qualified Products List | Commercial/Multifamily HPWH Systems | Northwest Energy Efficiency Alliance (NEEA) | 2026 |
| Heat Pump & Heat Pump Water Heater Field Database | Residential and Commercial HPWH | U.S. Department of Energy’s (DOE's) Office of Critical Minerals and Energy Innovation (CMEI) | |
| Central Heat Pump Water Heater Design Guide | Central HPWH | Energy Trust of Oregon | 2023 |
| Central Heat Pump Water Heating with 3 Case Studies | Central HPWH Case Study | American Council for an Energy-Efficient Economy (ACEEE) | 2019 |
| Laars E-Therm Commercial Air-to-Water Natural Refrigerant Heat Pump Water Heater | Commercial HPWH | Laars Heating Systems | |
| Central Heat Pump Water Heating Systems for Decarbonizing Multifamily Buildings: Market Assessment, Energy Performance and Cost Impact Analysis | Central HPWH | American Council for an Energy-Efficient Economy (ACEEE) | 2024 |
| Colmac Cx-Series Heat Pump Water Heating System: Jackson Apartments, Seattle WA | Case Study | Bonneville Power Administration (BPA) | 2022 |
| PG&E and SCE HPWH Laboratory Testing and Software Updates for Multifamily Applications | Multifamily HPWH Report | Ecotope | 2024 |
| Characterization of Central Heat Pump Water Heating Deployment in the Multifamily Market | Central HPWH Report | CalNEXT | 2025 |
| Market Potential for Heat Pump Assisted Hot Water Systems in Foodservice Facilities | Commercial HPWH Report | CalNEXT | 2023 |
| Hopeworks Station Case Study | Multifamily HPWH Case Study | Bonneville Power Administration (BPA) | 2021 |
| Skokomish Tribe Community Center Case Study | Commercial HPWH Case Study | Bonneville Power Administration (BPA) | 2021 |
| The Hostel: EPHOCA AIO Wall Mounted Heat Pump Case Study | Commercial HPWH Case Study | Bonneville Power Administration (BPA) | 2023 |
| CO2 Heat Pump Water Heater Study: Hopeworks Station Place, Everett WA | Multifamily HPWH Case Study | Ecotope | 2020 |
| Jackson Apartments Case Study | Multifamily HPWH Case Study | Bonneville Power Administration (BPA) | 2021 |
| Menlo Park: WaterDrop Pre-Manufactured Plug and Play Central Heat Pump Water System Proves Off-Site Construction Works | Central HPWH | Small Planet Supply | 2024 |
| Eliminating the Swing Tank and Other Design Considerations in Large-Capacity CO2 Heat Pump Water Heating | Commercial HPWH Study | American Council for an Energy-Efficient Economy (ACEEE) | 2024 |
| Demonstration and M&V: Commercial Heat Pump Water Heating System using the Mitsubishi HEAT2O in Origin by Steffes Plug-and-Play Package at Bayview Tower, Seattle WA | Commercial HPWH Case Study | Bonneville Power Administration (BPA) | 2022 |
| Central HPWH Retrofit Readiness Through Hot Water Distribution System Optimization Focused Pilot | Central HPWH Pilot Project | Energy Transition Coordinating Council (ETCC) | 2026 |
| JA14 Central Heat Pump Water Heater Systems | Central HPWH Compliance | California Energy Commission | 2025 |
| JA13 Heat Pump Water Heater Demand Management Systems | Commercial HPWH Compliance | California Energy Commission | 2025 |
| Commercial Heat Pumps | Commercial HPWH Video | Slipstream | 2025 |
| Commercial Heat Pump Water Heating Systems – The Water Heating Solution in Building Electrification | Commercial HPWH Webinar | Building Efficiency for a Sustainable Tomorrow (BEST) Center | 2023 |
| Commercial Heat Pump Water Heating with Mitsubishi Heat2O | Commercial HPWH Webinar | Efficiency Vermont for Trade Partners | 2022 |
| Water Heater Case Study: Mid-rise multifamily makes a sustainable splash | Central HPWH Case Study | BetterBricks | 2025 |
| Central Heat Pump Water Heaters Project Spotlight: Low-Rise Multifamily | Central HPWH Case Study | BetterBricks | 2023 |
| Industrial and commercial heat pump installation highlights | Commercial HPWH Webinar | Australian Alliance for Energy Productivity | 2024 |
| Central Heat Pump Water Heaters for Multifamily Buildings | Central HPWH Guide | U.S. Department of Energy’s (DOE's) Office of Critical Minerals and Energy Innovation (CMEI) | 2024 |
| Distributed Heat Pump Water Heaters for Multifamily Buildings | Multifamily HPWH Guide | U.S. Department of Energy’s (DOE's) Office of Critical Minerals and Energy Innovation (CMEI) | 2024 |
| Heat Pump Water Heater On Demand Training | On Demand Training | Hot Water Solutions | |
| Heat Pump Water Heaters in Multifamily New Construction: Design Charrette Findings | Commercial/Multifamily HPWH Systems Report | Northwest Energy Efficiency Alliance (NEEA) | 2024 |
| Market Research on Existing Water Heater in Select Commercial Buildings, Final Report | Commercial HPWH Report | Northwest Energy Efficiency Alliance (NEEA) | 2025 |
| Commercial and Industrial Pumps Standard Evaluation | Commercial HPWH Report | Northwest Energy Efficiency Alliance (NEEA) | 2021 |
| ECO2 Heat Pump Water Heater Controller: Feasibility Study & Applications Testing | Commercial HPWH Study | Bonneville Power Administration (BPA) | 2022 |
| Boring but Efficient: Heat Pump Water Heater Opportunities in Commercial Buildings | Commercial HPWH Study | American Council for an Energy-Efficient Economy (ACEEE) | 2024 |
| Water Heating Resources | Commercial HPWH Resources | Bonneville Power Administration (BPA) | |
| Industrial Heat Pumps | Commercial HPWH Webinar | Bonneville Power Administration (BPA) | 2022 |
| Mitsubishi Heat2O Hot Water Load Shift Demonstration and Simulation Analysis: at Bayview Towers, Seattle, WA | Multifamily HPWH Report | Bonneville Power Administration (BPA) | 2023 |
| Industrial Heat Pump Market Study | Commercial HPWH Study | Bonneville Power Administration (BPA) | 2024 |
| Consumer Heat Pump Water Heater in Commercial Applications Workbook | Commercial HPWH Spreadsheet | Northwest Power and Conservation Council | |
| Research Strategy for Consumer Heat Pump Water Heaters Installed in Commercial Buildings | Commercial HPWH Report | Regional Technical Forum | 2020 |
| ENERGY STAR® Version 1.0 Commercial HPWH Draft 1 Specification | Commercial HPWH Webinar Presentation | Environmental Protection Agency (EPA) | 2025 |
| SCE Commercial HPWH Poster | Commercial HPWH Poster | Southern California Edison (SCE) | |
| Heat Pump Water Heater Technical Guide for R-2 Occupancy (Low-rise multifamily new construction, three stories and fewer) | Multifamily HPWH Guide | BetterBuiltNW | 2020 |
| Commercial Sector Document Library | Commercial HPWH Resources | Bonneville Power Administration (BPA) | |
| CEE Commercial Water Heating Specifications 2024 | Commercial HPWH Specification, available for download | Consortium for Energy Efficiency, Inc. (CEE) | 2023 |
| CEE Commercial Water Heating Initiative Description | Commercial HPWH Report | Consortium for Energy Efficiency, Inc. (CEE) | 2012 |
| Commercial Heat Pump Water Heaters - Function, Configuration, Applications | Commercial HPWH Podcast | HVAC TV | 2024 |
| Commercial Heat Pump Water Heater System Considerations in a Nutshell | Commercial HPWH Webinar | The Lab at City Light | 2024 |
| CO2 - The Commercial Heat Pump Super Power | Commercial HPWH Podcast | Heat Geek Uninsulated | 2024 |