Understanding cost of Heat Pump water heaters versus gas water heaters
(Palo Alto only, for now)
Heat pump water heaters (HPWH) can save you money while reducing pollution and PM2.5 in Palo Alto. It costs $2.5K - $4.5K to replace a gas water heater in the Bay Area. Palo Alto rebates plus Federal tax credits (available through December 31, 2025) reduce the HPWH cost. And, with lower operating costs, you'll save money on every utility bill. Use the two calculators below to compare purchasing and owning HPWH versus gas water heaters.
Water heater Purchase Cost Calculator
Your eligible tax credit is:
This model uses $2,500 as the current gas water heater replacement cost
HPWHs are three to six times more efficient than gas water heaters. To calculate your operational savings, look on your utility bill and find your average gas therms during months in which you don't run your furnace, which is typically July through September. If you have a gas stove, reduce your average therms by 15%. Too much work? Use 30 therms per month as your estimate. Enter your answer in the first box, below.
If you are considering another gas water heater, put its Uniform Energy Factor (UEF), which is a measure of its efficiency, in the second box, below. Or, enter 0.64, which is the UEF for a 50 gallon Rheem gas water heater, a popular brand and size. Finally, find the UEF for your proposed HPWH, and enter that into the third box. Then press CALCULATE.