$2,000–$5,500 for a 50-gallon heat pump water heater replacing an electric tank, installed, and $3,300 is typical. Switching from gas with a new 240V circuit runs $2,300–$7,500. The federal 25C tax credit ended for units installed after December 31, 2025, so in 2026 the discount comes from utility and state rebates, often $300–$1,000.
50 gal, replacing an electric tank: $2,000–$5,500 installed
Switching from gas, with a new 240V circuit: $2,300–$7,500
After a typical utility rebate: about $2,650
Federal 25C credit: ended for installs after Dec 31, 2025
Running cost about $215 a year vs $645 for an electric tank
Prices verified November 2026 · Cross-referenced against 36+ American pricing sources · See methodology
01 / PricesUSA · November 2026
Heat pump water heater prices (2026)
A 50-gal heat pump water heater costs $2,000–$5,500 installed. Rebates and running costs are what make it cheaper than an electric tank over time.
Heat pump water heater prices (2026)Installed, low to high with the typical price marked.
Heat pump water heater, 50 gal, before rebates (switching from gas, new 240V circuit)$4,000$2,300–$7,500
Heat pump water heater, 65–80 gal$3,900$2,600–$6,000
Heat pump water heater, 50 gal, installed (replacing an electric tank)$3,300$2,000–$5,500
Heat pump water heater, 50 gal, after a typical utility rebate$2,650$1,000–$5,200
Electric tank, 40–50 gal (for comparison)$1,500$800–$2,500
$0$2,000$4,000$6,000$8,000
Job
Low
Typical
High
Heat pump water heater, 50 gal, installed (replacing an electric tank)installed
$2,000
$3,300
$5,500
Heat pump water heater, 50 gal, before rebates (switching from gas, new 240V circuit)installed
$2,300
$4,000
$7,500
Heat pump water heater, 65–80 galinstalled
$2,600
$3,900
$6,000
Heat pump water heater, 50 gal, after a typical utility rebateinstalled
$1,000
$2,650
$5,200
Gas-to-electric switch: new 240V circuit (long run to the heater)per job
$300
$700
$2,000
Electric tank, 40–50 gal (for comparison)installed
$800
$1,500
$2,500
Running cost per year: heat pump water heaterper year
$150
$215
$325
Running cost per year: electric tankper year
$445
$645
$980
US prices, November 2026. Low is a simple job in a low-cost area; high is a bigger job or a high-cost city.
02 / By city195 cities priced
Does heat pump water heater cost change by city?
Yes. The same job costs more where labor and rent cost more. Here's how water heater prices in the biggest US metros compare with the US typical of $1800.
Water heater prices in the 12 biggest US metrosEach city's typical water heater price against the US typical of $1,800.
The federal Energy Efficient Home Improvement Credit (25C) paid 30% of the cost, up to $2,000, for heat pump water heaters bought and installed from 2023 through December 31, 2025. The 2025 tax law signed on July 4, 2025 ended it after that date, so a unit installed in 2026 gets no federal credit.
Utility and state rebates are still paid in many areas, usually $300–$1,000 and more in some places. Many require an approved contractor, a qualifying model or a final permit, so check your utility's rules before you book.
02
What drives the price
The swap from an electric tank is the cheapest version: the unit uses the same 240V circuit and adds a condensate drain, for $2,000–$5,500. Coming from gas, you usually also need a new 240V circuit ($300–$2,000), which takes the total to $2,300–$7,500; 120V plug-in models avoid it where one suits the home.
Size matters too. A 65–80 gal model costs $2,600–$6,000 installed. Moving the unit to a new spot, a long condensate run or a full panel upgrade push quotes to the top of each range.
03
Where a heat pump water heater works
It pulls heat from the air around it, so it needs space and warmth. The Department of Energy says the room should stay between 40°F and 90°F and have at least 1,000 cubic feet of air. A garage, basement or large utility room usually works; a small closet often doesn't without vents.
It cools and dries the room a little, which is a bonus in hot climates. Below 40°F the unit falls back on its electric elements, which costs more to run.
04
Running cost and payback
A heat pump model costs about $215 a year to run in a typical home, against $645 for a standard electric tank, at the 2026 US average electric rate. That saves about $430 a year.
At typical prices the extra $1,800 over an electric tank pays back in about 4 years, or about 3 years after a typical rebate. Where power costs more than the US average, it pays back faster.
05
Watch out
Red flags in a quote
No plan for the condensate drain, a unit squeezed into a small closet with no venting, or a quote that ignores the rebate paperwork your utility needs. Ask whether the price includes the permit; some rebates won't pay without a final inspection.
06
Compare
2026 money off: what still exists
In 2026 the federal tax credit is gone, but two kinds of rebates are still paid. One comes from your utility. The other is a federal rebate run by some states.
Program
What you can get
Who can get it
2026 status
Federal tax credit (25C)
Was 30% of the cost, up to $2,000
Homeowners who owed federal income tax
Ended. No credit for units placed in service after Dec 31, 2025.
Home Electrification and Appliance Rebate (HEAR)
Up to $1,750 for an ENERGY STAR heat pump water heater
Households under 150% of the area's median income. Under 80%: up to the full cost. From 80% to 150%: up to half.
Run by states. Open only in some states. Ask your state energy office.
Utility rebates
Often $300–$1,000; more in some areas
Customers of that utility; rules vary
Still paid in many areas. Check before you book.
Many rebates need an approved model, a licensed installer, a final permit, or sign-up before the work starts. Read the rules first. After a typical utility rebate, a 50-gal unit costs $1,000–$5,200 installed.
07
Worked example
Worked example: your electric tank just failed
Over 10 years, a heat pump model costs about $4,800 all in, against about $7,950 for a new electric tank. That's about $3,150 saved, at typical US prices for a home of 3–4 people.
Line itemCost
Heat pump water heater, 50 gal, installed$3,300
Typical utility rebate−$650
Power for 10 years at $215 a year$2,150
10-year total$4,800
A new electric tank instead: $1,500 installed plus $645 a year, or $7,950 over 10 years. Where power costs more than the US average, the gap grows. Try our running cost calculator for your state.
08
Checklist
Check your space before you buy
A heat pump water heater needs a room that stays between 40°F and 90°F all year, with about 1,000 cubic feet of air, says ENERGY STAR. That's about a 12 × 11 foot room with an 8-foot ceiling. Check these too.
The room stays between 40°F and 90°F all year. A basement or utility room often works. So does a garage in a mild area.
There's about 1,000 cubic feet of air, or the maker's fix for a smaller room, such as a louvered door or ducts.
There's a drain nearby for the condensate (the water the unit pulls from the air). If not, plan for a small pump.
The maker's clearances fit. One plug-in model asks for 6 inches of space above the top.
Power is ready: a 240V circuit from an old electric tank, or a regular outlet nearby for a 120V plug-in model.
It isn't next to a bedroom. The fan and compressor hum while it heats.
You're fine with a cooler room. It pulls heat from the air, so the space gets a bit cooler and drier.
The model you want is on your rebate's approved list.
09
Compare
120V plug-in or 240V: which one?
A 120V plug-in model can save a gas home the cost of a new circuit, which runs $300–$2,000. A 240V model is the usual pick when an electric tank already has a circuit.
Item
120V plug-in
240V standard
Power
Plugs into a regular outlet. Some models can share the circuit; one maker asks for at least a 15-amp breaker.
Needs its own 240V circuit, like an electric tank.
Best fit
Gas homes with no 240V circuit near the tank
Replacing an electric tank
New circuit cost
Often none, if an outlet is close
None if an electric tank is there now; $300–$2,000 coming from gas
Backup heat
Small or no backup element, so it can be slower at busy times
Electric elements help at busy times and in cold rooms
One maker's 50-gallon plug-in model is rated at 55 gallons in the first hour. If your busiest hour needs more, look at a bigger tank. See our heat pump vs gas guide.
10
Step by step
Switching from gas: the order that saves money
Check rebates first, because some pay only if you sign up before the work starts. Then go in this order.
Check rebatesLook up your utility's rebate page. Ask your state energy office if Home Energy Rebates are open where you live. Note the model list and the paperwork rules.
Check the spaceUse the checklist above. A cold or small room can rule a unit out, or mean you need ducts.
Pick 120V or 240VIf there's no 240V circuit near the tank, price a 120V plug-in model too.
Get itemized quotesAsk for the unit, labor, electrical work, condensate drain, permit and gas line cap on separate lines. Before rebates, this switch typically runs $2,300–$7,500.
Have the gas line capped by a proThe old gas line to the heater must be shut off and capped safely. That's licensed work in most places.
Pass the final inspectionMany rebates need the final permit sign-off. Keep the permit, the invoice and the model number.
Send in the rebateSubmit the forms before the deadline your utility or state sets.
11
Watch out
More red flags in a heat pump quote
A 2026 quote that still counts a 30% federal tax credit is out of date. Watch for these too.
A 30% federal tax credit taken off the price. It ended for units placed in service after December 31, 2025.
A model that isn't ENERGY STAR certified, when your rebate needs one.
A panel upgrade quoted with no check of how much power your panel has to spare, when a 120V plug-in model might avoid it.
No talk about the room's temperature or size.
An unheated garage in a cold state, with no word that the unit will lean on its costly backup heat in winter.
A unit set right next to a bedroom, with no mention of the noise.
No first-hour rating on the quote.
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05 / Questions10 answers
Heat pump water heater cost: FAQ
Is there a federal tax credit for a heat pump water heater in 2026?
No. The 25C credit (30%, up to $2,000) covered units bought and installed through December 31, 2025. Utility and state rebates are still available in many areas.
How much does a heat pump water heater save?
About $430 a year against a standard electric tank in a typical home at US average electric rates: $215 vs $645 a year.
Does a heat pump water heater need a 240V circuit?
Most 50-gal models use a 240V circuit, the same as an electric tank. Coming from gas, adding one costs $300–$2,000, or more if the panel needs work.
Will a heat pump water heater work in my garage?
Usually, if the garage stays between 40°F and 90°F most of the year and has about 1,000 cubic feet of air, which the Department of Energy recommends.
What does a bigger heat pump water heater cost?
A 65–80 gal model costs $2,600–$6,000 installed, about $600 more than a 50-gal unit at typical prices.
What is the HEAR rebate for a heat pump water heater?
It's a federal rebate run by states. It pays up to $1,750 for an ENERGY STAR heat pump water heater, for households under 150% of the area's median income. Under 80%, it can cover the full cost; from 80% to 150%, up to half. It's open only in some states, so ask your state energy office.
Can a heat pump water heater plug into a regular outlet?
Some can. 120V plug-in models use a standard outlet, and some can share the circuit. They suit gas homes with no 240V circuit nearby, which would cost $300–$2,000 to add.
Are heat pump water heaters noisy?
They hum while heating, because they run a fan and a compressor. Put one in a garage, basement or utility room, not next to a bedroom.
Do heat pump water heaters work in cold climates?
Yes, if the unit sits in a space that stays above 40°F, like a basement. In a colder space it uses its electric backup more, which costs more to run.
Is a heat pump water heater worth it in a gas home?
Sometimes. Switching typically costs $4,000 before rebates, against $2,000 for a new gas tank. It pays best when the gas tank needs replacing anyway, a big rebate is on offer, or power is cheap where you live. See heat pump vs gas.
These are independent estimates built from public cost guides, retailer and contractor price data, EIA energy prices and published city figures. No plumber can pay to change them, so always get a couple of quotes. Last reviewed November 2026. Read the full methodology →