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
Central HPWHs
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.
Small Commercial
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.
Packaged Central HPWHs
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.
High Temperature Central HPWHs
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.
Credit: Blue Fern Productions
Commercial HPWH Resources
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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.