While heat pump water heaters are not known by every customer, they are a choice every customer should know about. Whether it’s for an emergency or planned replacement, a heat pump water heater (HPWH) is the most energy-efficient choice, providing your customers’ hot water needs today, while saving them more than 50 percent of electric water heating costs for years to come.
They can also be a business booster since the profitability of HPWHs is typically higher than a standard water heater, making each sale a valuable opportunity.
In the Pacific Northwest, Hot Water Solutions, hotwatersolutionsnw.org, an initiative funded by utilities in Oregon, Washington, Idaho and Montana through the Northwest Energy Efficiency Alliance, is working to dramatically increase consumer demand for HPWHs through consumer awareness, education, and monetary incentives over the next few years. The initiative is also working to boost business for contractors and installers with free technical and sales training.
Elsewhere in the U.S., there is also a great opportunity for growth. And with a little background knowledge, contractors could become leaders in their service area.
HPWHs have been around since the 1980s, but today’s models are a far cry from their predecessors. And, while today’s models are a great option for customers, there are still misperceptions. This article debunks five common myths about HPWHs, and provides actionable strategies to build your sales.
Five myths about HPWHs
Myth No. 1: HPWH technology may not produce enough heat to quickly recover when hot water is in high demand, and they’re loud.
HPWHs offer the best of both worlds: maximum energy savings and reliable recovery time. In fact, first hour ratings for HPWHs are just as high as electric tanks. Newer HPWH technology, used in Tier 3 tanks, works to maximize the most recently heated water for its end uses.
To maximize hot water recovery; larger tank sizes may be advisable based on your customers’ needs. Manufacturer and sizing guidance will help with this. It is also helpful to encourage customers to use the Hybrid Mode, so when extra hot water is required, electric elements will kick in to boost hot water. Hybrid Mode provides economy when you want it, power when you need it.
While HPWHs generate some operational noise, around 45 decibels or so, the sound is comparable to the background noise from a portable fan. When the units are installed in a separate room from the living space very few homeowners are aware they are operating.
Myth No. 2: My customers just want a quick, like-for-like replacement.
The truth is, it’s hard to predict what a customer will or won’t pay for, or know what they can or can’t afford. To be fair to all customers, offer them choices. Start off by asking questions to find out what the customer’s interests and needs are. Then provide a series of choices, including the best possible one appropriate for the customer’s needs.
In the long run, providing choices to all customers, without assumptions, will produce greater sales across all price categories, as well as more satisfied customers.
Myth No. 3: Homeowners won’t pay extra for a high-efficiency water heater.
In some cases, upgrading to a HPWH could be comparable in price to a standard electric tank due to available tax credits, manufacturer rebates, and local utility promotions. Here’s how it might work:
On average, a customer will pay $2,500 for a HPWH compared to $1,300 for a standard electric water heater. However, in many regions, available rebates can dramatically decrease the upgrade investment for the HPWH. Many manufacturers are offering up to $300 in instant markdowns to help attract more customers to their products. Many local electric utilities are offering rebates to reward their customers who choose energy efficiency. In the Pacific Northwest, for example, customers can qualify for up to $800 in utility rebates.
It’s important to remember too that HPWHs generally cost half as much to operate as a standard electric water heater, saving many homeowners $300 a year or more. Using available manufacturer rebates, plus utility rebates could mean there is very little payback time for the initial investment. For customers using only manufacturer rebates, it will take up to two years for a 100 percent return-on-investment. After that, all of the savings go right into the homeowner’s pocket.
Myth No. 4: HPWH installation requirements are too complicated and may require maintenance and call backs.
As long as you have the skills to install a standard electric water heater, you have the skills to install a heat pump water heater. It’s true it may be easier to stay with the models you are most familiar installing. However, once trained, qualified installers will find that the few additional installation requirements for a HPWH are straightforward and typical of other plumbing, heating and air conditioning products they routinely install.
Some of these installation considerations include:
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Locating the HPWH in a place with ambient temperatures that do not drop below 40 degrees Fahrenheit, such as the basement or a utility room
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Possibly exhausting the cooler air conditioned air if needed
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Having adequate space for the product’s footprint and height
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Installing a condensate drainage line
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Ensuring continued access for maintenance (e.g., filter changes)
For worries about maintenance and call backs, with proper homeowner education, filter maintenance can be easily managed. And, if the condensate drainage is installed properly, this shouldn’t add customer call backs.
Myth No. 5: HPWHs take too much time to install and are less profitable for my business.
The fact of the matter is HPWHs have the potential to be very profitable. It’s the contractor who determines their selling prices by considering product costs, material costs, labor costs, overhead costs, selling costs and desired net profit. So, it does not matter if two HPWHs or three standard water heaters are installed in the same day if the total profit for the day is the same.
The business-savvy contractor considers both the profitability of a single job and the total profits produced per installer per day when establishing their pricing. Simply price each job with a gross profit per day target in mind and you can make more money and create happier customers.
For contractors who want to learn more about HPWHs, there are some great resources available. Building your knowledge, and finding the sales model that works best for you, are the keys to making HPWH sales work well for your business, all while being a leader in energy efficiency and customer services.
Resources:
Hot Water Solutions, www.hotwatersolutionsnw.org, offers tools to make selling HPWHs easy, including sales training, product features and benefits, and current financial incentives available. Also, check with your local utility to learn about current rebates available to your customers and any install requirements needed to qualify.
Jill Reynolds oversees the Northwest Energy Efficiency Alliance’s heat pump water heater initiative, Hot Water Solutions, which focuses on promoting the development and adoption of heat pump water heater technology. Prior to joining NEEA, Reynolds managed several residential programs for a variety of Northwest utility and municipal clients. Programs included single family weatherization, single and multifamily direct install, retail products and lighting, and single and multifamily audits. She is a graduate of Linfield College in McMinnville, Oregon. Additionally, she holds JD from Lewis and Clark law school in Portland.