Heat Pump Water Heaters for Multifamily Buildings: Tips for Installation and Performance

Thinking about using heat pumps for electric water heating in your multifamily building? HPWHs, especially integrated models (iHPWHs), are gaining traction beyond single-family homes for their energy-saving potential.

HPWHs can often reduce electricity use compared to traditional resistance heaters, but installing and optimizing performance is not always straightforward. These systems were designed for open spaces in single-family homes, so getting good performance in apartments takes a thoughtful approach.

At SWA, we’ve seen both the promise and the pitfalls of HPWHs in multifamily projects. To help our clients achieve better performance, we drafted guidelines and checklists for multifamily HPWH applications.

Here’s what you need to know to make them work:

Note: We published this blog post on October 23 because it’s Heat Pump Water Heater Day! Learn more about this annual online event from the Advanced Water Heating Initiative at advancedwaterheatinginitiative.org/hpwh-day.

Pros and Cons of Heat Pump Water Heaters for Multifamily

Pros

• Energy efficiency: HPWHs use ambient air to heat water, often reducing electricity use significantly compared to traditional electric resistance heaters.
• Cooling benefit in summer: HPWHs cool the air around them, which can be a bonus in warmer months.

Cons

• Noise: Some units can be loud. If installing them near occupied spaces, look for models with sound ratings ≤45 dBA.
• Installation complexity: Poor placement or lack of airflow can drastically reduce performance.
• Up-front cost. HPWHs are considerably more expensive than resistance tanks.

Can Heat Pump Water Heaters Work in Multifamily Buildings?

Yes, but only if installed thoughtfully. In multifamily buildings, especially in colder regions, performance depends heavily on location, airflow, and integration with other systems.

Tips for Cold Climate Success

• Manage airflow: If installed in closets, use louvers or grilles to allow warm air in and cold air out. Better yet, duct one or both sides of the HPWH to adjacent spaces.
• Avoid outdoor ducting: Never duct HPWHs to the outdoors in cold climates. It reduces efficiency and can damage the unit.
• Control cold air discharge: Don’t discharge cold air into areas where it could cause comfort issues.
• Ensure access: Make sure there’s easy access for controls, filter cleaning, and condensate drainage.
• Coordinate with space heating: Because HPWHs remove heat from indoor air, space heating systems may need to work harder in winter. Avoid electric resistance heating for space heat, or you’ll lose the efficiency gains.

Multifamily Configurations for Heat Pump Water Heaters

SWA has developed guidelines for three typical HPWH setups in multifamily buildings:

1. Inside apartments: Requires careful planning to avoid comfort and noise issues.
2. Closets off corridors: Offers better airflow options but still needs smart ducting.
3. Remote mechanical rooms: Can work well if air temperature and access are managed properly.

Good Example:

This HPWH is located inside an apartment closet, and intake and discharge air is ducted within the apartment. Discharge registers are located where cold air won’t cause comfort problems.

Bad Example:

This HPWH is wedged in a closet; there was no regard for clearances or adequate air from which to extract heat. There is a resistance heater to try to heat up the closet, which defeats the purpose of the heat pump.

Our Heat Pump Water Heater Guidelines for Multifamily Buildings

We’ve seen too many poorly installed HPWHs in multifamily buildings. While there’s no one-size-fits-all solution, thoughtful design and installation can make HPWHs a smart choice—even in cold climates.

SWA’s guidelines and checklists are designed to help developers, engineers, and contractors get better performance from these systems. Click here to download a copy of our detailed Guidelines for Heat Pump Water Heaters in Multifamily (PDF).

If you’re considering HPWHs for your next multifamily project, we’re here to help. Click here to contact us.