Denver HVAC Contractor
Heat Pump Water Heater Installation
UniColorado is your go-to expert for heat pump water heater installation in Denver and the surrounding areas. These units are 2-3x more efficient than electric resistance water heaters and qualify for Xcel Energy rebates. Whether you're upgrading an existing water heater or adding one as part of a larger HVAC project, our technicians handle everything from assessment to installation.
Heat Pump Water Heater Installation
Heat Pump Water Heater Installation
Heat Pump Water Heater Installation
Heat pump water heater installation for residential customers in the Denver metro area.
How It Works
What is a heat pump water heater?
A heat pump water heater (also called a hybrid water heater) is an energy-efficient alternative to traditional electric or gas water heaters. It uses electricity to move heat from the surrounding air into the water tank, rather than generating heat directly. The process is similar to how a refrigerator works, but in reverse.
The U.S. Department of Energy rates heat pump water heaters as 2-3x more efficient than conventional electric resistance models. An Energy Star certified unit must achieve a Uniform Energy Factor (UEF) of 2.0 or higher, meaning it produces at least twice the heat output per unit of electricity consumed.
What Our Customers Say
Chastity O.
My mother debra was a customer of theirs. They did an amazing job. My mom feels they were so hood to her. They were professional and supportive even when problems did arise. She appreciates all you did for her. She would recommend yall to anyone!!
Kyle M.
Aydin and team were absolutely fantastic. The install was efficient and smooth. By far the best value that we received quotes for.
Michael M.
Afshin and Aydin were great to work with! The whole process from solution design through installation went smoothly, all at a fair price. They were always responsive and the job finished on time. Couldn't recommend more.
Take Advantage of Heat Pump Rebates
Colorado's Most Experienced Heat Pump Installer
Heat pump water heaters use roughly a third of the energy of a standard electric tank. We install them alongside HVAC heat pump projects, making sure the unit has adequate airflow space and proper drain routing. May qualify for Xcel Energy rebates when bundled with a heat pump installation.
Our first hyper-heat install
Early Lennox cold-climate adoption
Bosch IDS Ultra install
Latest cold-climate tech
30+
Municipalities
Master
Licensed & Certified
1000s+
Happy Homeowners
Water Heater Certified
Technicians
100% Satisfaction
Guarantee
Up Front Pricing
No hidden fees
$5M+
Saved for homeowners in 2025
$9,250
Average savings
5,000+
Rebate applications submitted
Are heat pump water heaters more efficient?
Heat pump water heaters are 2-3x more efficient than electric resistance models because they move heat rather than generate it. A typical electric tank water heater has a UEF around 0.90-0.95, while a heat pump model achieves 3.5-4.0 UEF.
Comparing to gas water heaters is more nuanced. Natural gas in Colorado (via Xcel Energy) typically costs less per therm than the equivalent electricity. If you currently have a gas water heater and are satisfied with its performance, the operating cost savings from switching to a heat pump model depend on your specific Xcel rates and usage patterns.
If you have an electric resistance water heater, a heat pump upgrade is a clear win: expect 50-66% reduction in water heating electricity and $200-$400 per year in savings for a typical Denver household.
Pricing
Heat pump water heater installation cost
Heat pump water heater installation in Denver runs $6,000 to $7,000 gross. After the Xcel rebate, typical out of pocket is $3,850 to $4,250 for a standard installation.
Xcel Energy customers receive a $2,250 rebate for Energy Star certified models, which UniColorado applies as an upfront discount on your invoice. Income-qualified households may also be eligible for up to $1,750 through the HEAR rebate program.
If your electrical panel needs upgrading to support the 240V circuit, add $4,800 and up. We include this in your estimate when applicable.
- Cost Factor
- Heat pump water heater unit (50-80 gal)
- Typical RangeRecommended
- $2,500 - $4,000
- Cost Factor
- Installation labor
- Typical RangeRecommended
- $1,200 - $1,600
- Cost Factor
- 240V electrical circuit
- Typical RangeRecommended
- $400 - $800
- Cost Factor
- Permits & old tank disposal
- Typical RangeRecommended
- $300 - $500
- Cost Factor
- Total installed (gross)
- Typical RangeRecommended
- $6,000 - $7,000
Prices are estimates for Denver metro. Electrical panel upgrade not included. Xcel rebate ($2,250) brings typical out of pocket to $3,850-$4,250.
Are heat pump water heaters reliable?
Heat pump water heaters can experience reliability issues, with some brands being more prone to certain problems than others. Common issues reported by homeowners include compressor failures, evaporator temperature errors, and electronic control board problems.
Rheem: Error code EO (compressor lockout, high discharge temperature), E4 (high evaporator temperature), compressor leaks.
AO Smith: Error code A6 (compressor shutdown), A7 (evaporator freeze condition), condenser coil failures.
State: Error code 5 (compressor circuit locked out), error code 8 (evaporator sensor failure), premature heat pump failures and noisy operation.
These issues are not universal, but they are more common than problems with traditional tank water heaters. Manufacturer warranties typically cover 6-10 years on the tank and 1-6 years on parts. We recommend registering your warranty immediately after installation.
Is a heat pump water heater right for me?
A heat pump water heater is a good fit if:
- Your water heater is in an unfinished basement or garage with adequate airflow (700+ cu ft of space around the unit)
- You have solar panels or plan to install them (maximize your own electricity)
- You currently have an electric tank water heater (direct efficiency upgrade)
- Your installation space stays above 40°F year-round
A heat pump water heater may not be ideal if:
- The unit would be near bedrooms or living spaces (compressor noise reaches 45-55 dB)
- Your installation space is small or poorly ventilated
- You have a gas water heater and low natural gas rates
- Your basement drops below 40°F in winter (unit falls back to electric resistance mode)
Not sure? Heat pump HVAC installations pair well with heat pump water heaters. We can assess both during a single visit.
Pros & cons of heat pump water heaters
Pros:
- 2-3x more efficient than electric resistance (UEF 3.5-4.0 vs 0.90-0.95)
- $200-$400 per year lower operating costs vs electric tanks
- Xcel Energy $2,250 rebate available
- Dehumidifies installation space as a side benefit
- No combustion, no carbon monoxide risk
Cons:
- Higher upfront cost ($6,000-$7,000 gross, ~$3,850-$4,250 out of pocket vs $1,200-$2,500 for electric tank)
- Reliability concerns with current-generation models
- Compressor noise (45-55 dB, comparable to a dishwasher)
- Slower recovery in heat pump mode vs electric resistance mode
- Requires more installation space and ambient airflow
- Reduced efficiency below 40°F ambient temperature
If your current water heater is functioning well, it may be worth waiting for manufacturers to improve reliability in future models. If you need a replacement now and have the right installation conditions, a heat pump water heater can deliver significant long-term savings.
Compare
Heat pump water heater vs tankless
Heat pump water heaters and tankless (on-demand) water heaters both improve on traditional tank heaters, but they work differently and suit different situations. Here is how they compare for Denver homeowners.
A heat pump water heater is the better choice if you currently have an electric tank and want to stay electric while cutting energy use. A tankless gas unit makes sense if you already have a gas line and prioritize continuous hot water output.
One key difference for Xcel Energy customers: heat pump water heaters qualify for a $2,250 Xcel rebate, while tankless gas units do not. Income-qualified households can stack an additional HEAR rebate of up to $1,750.
- Factor
- Installed cost
- Heat Pump Water Heater
- $6,000 - $7,000 (OOP ~$3,850-$4,250)
- Tankless Gas
- $4,800 - $6,400
- Factor
- Energy source
- Heat Pump Water Heater
- Electricity
- Tankless Gas
- Natural gas
- Factor
- Efficiency
- Heat Pump Water Heater
- UEF 3.5 - 4.0
- Tankless Gas
- UEF 0.87 - 0.97
- Factor
- Monthly operating cost
- Heat Pump Water Heater
- $15 - $25
- Tankless Gas
- $20 - $35
- Factor
- Hot water delivery
- Heat Pump Water Heater
- 50-80 gal tank + recovery
- Tankless Gas
- Continuous (7-11 GPM)
- Factor
- Lifespan
- Heat Pump Water Heater
- 10 - 15 years
- Tankless Gas
- 15 - 20 years
- Factor
- Xcel rebate
- Heat Pump Water Heater
- $2,250
- Tankless Gas
- $0
- Factor
- Space needed
- Heat Pump Water Heater
- Floor space + airflow clearance
- Tankless Gas
- Wall-mounted (compact)
- Factor
- Noise level
- Heat Pump Water Heater
- 45-55 dB (compressor)
- Tankless Gas
- Minimal
Monthly costs assume Denver Xcel Energy rates. Heat pump water heater figures assume heat pump mode, not hybrid or electric resistance.
Rebates
Heat pump water heater rebates in Colorado
Xcel Energy offers a $2,250 rebate for Energy Star certified heat pump water heaters. UniColorado applies this as an upfront discount on your invoice, so you never have to file paperwork or wait for reimbursement.
Income-qualified households (under 150% Area Median Income) may also qualify for up to $1,750 through the HEAR rebate program. HEAR covers heat pump water heaters as a standalone measure. We verify eligibility during your estimate.
The federal 25C tax credit ended December 31, 2025 and is no longer available for new installations.
For Xcel customers upgrading both their HVAC system and water heater, bundling a heat pump installation with a heat pump water heater maximizes total rebate value. See our rebates hub for all available programs.
Frequently Asked Questions
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