The Future of Heat Pump Water Heating (and What it Means for Contractors)

Michael Rigney: Cala was founded before the IRA, and our business has never been dependent on federal policy.

Heat pump water heaters will play a significant role in the future of water heating – in our view, tens of percentage points and ultimately more. This is really about cost, because approximately 45% of US homes rely on electric resistance water heaters, and in almost every state, they make up over 25% of the market. Another 6% of the US market uses oil and propane, which are also expensive fuels. Replacing these with heat pump water heaters offers immediate, measurable savings—without needing to wait on policy or subsidies. To choose just one example, a family of four could see over $500 in annual operating cost savings with Cala versus an electric resistance water heater at the national average electricity price of $0.1745/kWh.

Related to this savings example, in the next year the average price residential retail electricity price increase is 6.7%.

More broadly, electrification isn’t a trend—it’s a trajectory. Heat pumps have outsold gas furnaces for three years running, and the desire to eliminate fossil fuels from the home continues to grow. Heat pump water heaters are a key part of that transition.

And let’s not forget that state-level programs like Mass Save are stepping up where federal momentum may slow. Plus, the DOE’s finalized efficiency standards have a no-rollback provision—so progress may bend, but it won’t break.

In short, water heating is already largely electric and smart, connected systems like Cala’s are set to play an even bigger role in that future

CONTRACTOR: How does intelligent management work to get maximum efficiency out of what is an inherently highly efficient technology?

Rigney: Standard heat pump water heaters may use efficient technology, but they’re still operating on century-old logic: “water gets cold, turn on heat.” That’s where Cala is different. Our intelligent control system transforms a reactive product into a predictive one.

By pairing a variable-speed compressor with a built-in mixing valve, Cala doesn’t just heat water efficiently—it optimizes across comfort, cost, carbon, and coordination with the rest of the home.

Say you’ve got a typical household where everyone showers in the morning. Most HPWHs would kick into high gear—and even use electric resistance backup—to reheat the tank right after. That hot water just sits there all day while the house is empty. Cala’s predictive control knows the usage patterns and can reheat more slowly, using less energy and operating the compressor at its most efficient speed.

Or if you’ve got rooftop solar, Cala can shift its heating window to take advantage of peak solar production, heating more quickly and to a higher temp when clean energy is abundant.

In short, the tech is already efficient—but its smart controls combined with the right data and hardware components unlocks its full potential.

CONTRACTOR: What do installing contractors need to know to help their customers make smart choices about their water heating systems, given all the variables at play?

Rigney: Contractors are on the front lines of one of the biggest transitions in home energy—so the key is being able to translate a complex landscape into clear, confident guidance for your customers.

The biggest thing to understand is that water heating isn’t one-size-fits-all anymore. Fuel type, household demand, utility rates, available incentives, solar integration—all of these play into what makes the “right” choice for a given home. That’s why product knowledge matters more than ever.

For example, many homes still rely on electric resistance water heaters, especially in retrofit situations. Replacing those with a heat pump water heater often offers immediate savings, and the payback can be fast. But not all HPWHs are built the same. Most still use basic, reactive controls. Cala’s system is predictive—it learns usage patterns, uses a variable-speed compressor for better efficiency, automatically adjusts tank setpoint, includes a built-in mixing valve and coordinates with solar or smart panels when available. That means efficient hot water is consistently available when needed – a better experience for your customer.

And yes—reliability matters. We’ve heard the concerns about heat pump durability, and Cala’s predictive control helps reduce unnecessary cycling, which minimizes wear and extends the system’s lifespan.

The more contractors understand these differences, the more they can position themselves as trusted advisors—offering solutions that aren’t just code-compliant or rebate-eligible, but genuinely smarter for the home and the homeowner.