Published · Updated
That Energy Blog is published by Kates Energy Modelling Inc.
Updated October 1, 2026: Rebuilt the cost comparison from the original workbook and HOT2000 report, separated capital from energy costs, and stated the cash-flow timing and solar assumptions. Removed unsupported break-even and equipment-lifetime claims.
The heat-pump water heater uses far less electricity than the resistance-electric option in this modeled comparison. That does not make it the lowest-cost option under the study’s prices. Rebuilding the 2024 calculation leaves gas cheapest, with the heat pump ahead of resistance electric.
That is a useful result. It tells a homeowner considering electrification what the efficiency improvement buys, while keeping the gas alternative and the added cost of solar visible.
Start with the modeled energy
The archived HOT2000 v11.13 comparison holds modeled hot-water demand at 192.7 litres per day across three scenarios. Annual water-heating energy is 24.0 GJ for the gas tank, 17.4 GJ for resistance electric and 3.9 GJ for the integrated heat-pump tank. These are model outputs, not measured bills.
| Scenario | Whole-home gas input | Whole-home electricity |
|---|---|---|
| Gas tank | 173.32 GJ/year | 7,960.4 kWh/year |
| Resistance-electric tank | 149.55 GJ/year | 12,805.3 kWh/year |
| Heat-pump tank | 157.17 GJ/year | 9,092.5 kWh/year |
The cost calculation uses the workbook’s whole-home fuel inputs, shown above. The heat-pump scenario uses 3,712.8 kWh less electricity than resistance electric, but 7.62 GJ more gas. Preserve both sides of that comparison. These whole-house totals already carry the modeled heating and fan effects; adding another heating penalty would double-count them.
A heat-pump water heater draws heat from the surrounding air, so its location and interaction with space heating matter. The US Department of Energy’s installation guide discusses that interaction. The archived summary alone does not isolate how much of this scenario difference comes from each model input.
A consistent 20-year comparison
Keep the historical study inputs visible: electricity at $0.22/kWh, gas at $7.50/GJ, and fixed monthly charges of $14 for electricity and $30 for gas. These are 2024 worksheet assumptions, not current quotes. For this reconstruction, the unit prices represent the assumed complete usage-dependent charges; the source does not break them into commodity and delivery components. All three scenarios retain gas service for the house, so none receives a gas-disconnection saving.
Initial installed tank costs are $2,000 for gas, $2,250 for resistance electric and $3,550 for the heat pump. For comparability with the source, the calculation retains gas replacements at years 7 and 14 and a heat-pump replacement at year 10, at the same dollar costs. No resistance-tank replacement is included. These are scenario assumptions, not service lives established by warranties.
| Scenario | Annual whole-home energy cost | 20-year cost, no added solar | 20-year cost, source solar assumption |
|---|---|---|---|
| Gas tank | $3,579 | $49,036 | $49,036 |
| Resistance-electric tank | $4,467 | $57,916 | $60,964 |
| Heat-pump tank | $3,707 | $51,928 | $52,641 |
Dollar totals are rounded. The rebuilt convention puts initial purchases at year 0, annual energy charges and solar credits at each year-end from 1 through 20, and the stated replacements at years 7, 10 or 14. This constant-dollar illustration uses a 5% real discount rate with no real price escalation. There is no separate inflation, GST, maintenance, financing or residual-value calculation. Confirm what the original rates and installed-cost estimates include before using this as a purchasing budget.
What changed from the original table
The original workbook places annual bills at years 0–19. Its final totals can be reproduced under that convention. The article also labelled combined discounted tank-and-energy totals as operating costs, making the displayed capital, operating and benefit rows misleading when added together.
The new table separates the definitions and uses a stated year-end convention. The heat pump is about $5,988 below resistance electric without added solar, but about $2,892 above gas under these inputs. That is a conditional comparison, not a universal ranking of water heaters.
Keep the solar assumption separate
The source adds $9,689.80 of solar capital to the resistance option and $2,264.20 to the heat-pump option. It credits 50% of each option’s extra annual electricity, relative to gas, at $0.22/kWh. That gives annual credits of $532.94 and $124.53 respectively.
The HOT2000 comparison reports zero PV in all three scenarios; solar is a separate financial overlay. This simplified credit is retained only to show what the source assumption does. It is not an hourly generation, self-consumption or export calculation. Under it, the discounted credits do not repay the added solar capital within this 20-year comparison. The calculation includes no PV degradation, inverter replacement or maintenance. A current solar proposal needs its own output estimate, installed quote, equipment assumptions and applicable import/export pricing.
What to check before choosing a tank
The old sensitivity claims do not survive recalculation: lowering electricity to $0.11/kWh still leaves the heat pump below resistance electric under the retained replacement assumptions; doubling gas to $15/GJ still leaves gas cheapest. Neither should be treated as a general break-even rule.
For an actual purchase, replace the historical prices with comparable installed quotes and the utility charges that really change with consumption. Confirm tank size, recovery performance, available room air, electrical work and operating mode. Compare product efficiency ratings on the same test basis; ENERGY STAR’s water-heater criteria use Uniform Energy Factor, which should not be silently substituted for a modeled seasonal efficiency.
The practical takeaway is narrower and stronger than “heat pumps always win”: the heat-pump option substantially reduces the electricity needed for this modeled hot-water load. Whether that improvement is worth its installed cost depends on the whole-house energy effect, prices, replacement assumptions and the homeowner’s goals.
Source basis
Reconstructed from the December 2024 HOT2000 comparison report and its companion cost workbook. The annual electricity values agree between the two files; the cost calculation retains the workbook’s GJ inputs. No measured utility savings, current contractor prices or underlying HOT2000 scenario rerun are claimed.
