Heat Pump Water Heaters in Fort Collins and Loveland
Heat pump (hybrid) water heaters that use far less electricity, with rebates checked before you buy.
- Honest repair-or-replace advice
- Written, itemized quotes
- Licensed and insured
Photo: Kskhh, CC BY-SA 4.0, via Wikimedia Commons
Fort Collins Water Heater Pros installs heat pump water heaters, also called hybrid electric water heaters, in Fort Collins, Loveland and across Larimer County. A heat pump model moves heat from the surrounding air into the tank, and ENERGY STAR estimates a certified unit saves a household of four about $550 a year over a standard electric water heater. Our licensed plumbers check your space and give you a written, itemized quote before work starts.
Call (970) 305-5633 to find out whether a heat pump water heater fits your home.
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How a heat pump water heater works
It works like a refrigerator in reverse. A.O. Smith describes the cycle: a fan moves room air over an evaporator coil, refrigerant absorbs the heat, a compressor raises its temperature and the hot refrigerant passes that heat into the tank water.
The U.S. Department of Energy (DOE) says heat pump models can be two to three times more efficient than conventional electric resistance heaters. ENERGY STAR requires a Uniform Energy Factor (UEF) of at least 3.30, or 2.20 for 120-volt, 15-amp plug-in models; DOE’s federal minimum for a 50-gallon electric tank is about 0.92 to 0.93.
Where a heat pump water heater fits in a Northern Colorado home
It needs a room that stays roughly 40°F or warmer with several hundred cubic feet of air or more around it. ENERGY STAR’s pages differ on exact figures, so the manual decides: Rheem’s ProTerra wants more than 700 cubic feet or a louvered door, and A.O. Smith specifies 450 for its 120-volt Voltex.
| Location | Good fit when | Watch for |
|---|---|---|
| Basement or utility room | It stays roughly 40°F or warmer | A gas furnace sharing the room |
| Closet | Louvers or ducting meet the manual | Too little air |
| Garage | It stays roughly 40°F or warmer all winter | An unheated garage; condensate lines that freeze |
The room cools as the unit runs; Rheem warns that poor air circulation can drop it more than 15°F. DOE also warns a gas furnace in the same room may not draft properly, so we check it.
120-volt plug-in vs 240-volt heat pump water heaters
Do heat pump water heaters need 240 volts? Standard hybrids from Rheem and A.O. Smith do; their 120-volt plug-ins use a standard outlet but recover more slowly. A.O. Smith recommends 240-volt models for replacing electric tanks and plug-ins for replacing gas.
| 240-volt hybrid | 120-volt plug-in | |
|---|---|---|
| Power | Dedicated circuit; A.O. Smith specifies 30 amps | Standard outlet; A.O. Smith’s draws 7.5 amps at most and can share a 15-amp circuit |
| Backup elements | 4,500 watts on Rheem’s 30-amp ProTerra | Small or none (DOE) |
| Hot water | First-hour ratings of 60 to 87 gallons (Rheem, 30-amp models) | Can run out if undersized (DOE); a mixing valve helps |
Xcel’s 2026 rebate summary requires a 3.3 UEF, and Rheem’s dedicated-circuit plug-in is rated 3.0, so check a plug-in’s rating before counting on that rebate.
Does a heat pump water heater need a condensate drain?
Yes. Moisture condenses on the evaporator coil, a small amount of clean, non-acidic water (ENERGY STAR) that must go to a drain or a condensate pump. DOE’s installer training says to set the tank level so it drains, use an existing drain of at least ¾ inch per the International Mechanical Code, add a pump when the drain sits higher, and keep lines in unheated spaces from freezing.
Cooling, dehumidifying and noise
In hot, humid weather the unit can help cool and dehumidify its room, ENERGY STAR says; in winter it cools the space too, and it runs less efficiently in colder air. It also hums: A.O. Smith says the fan and compressor make a sound other water heaters don’t and rates its 120-volt Voltex at 45 dBA.
Operating modes and backup elements
ENERGY STAR lists the usual modes: efficiency (heat pump only), hybrid or auto (the default, with backup elements for heavy demand), electric (elements only, the least efficient) and, on some models, vacation. In colder months, ENERGY STAR says, colder incoming water can push a unit into backup electric mode for a while, raising energy use, and DOE notes that cold inlet water and cooler air slow recovery.
How to size a heat pump water heater
Size it by first-hour rating against your busiest hour, as with any tank. ENERGY STAR says most models come in 50, 65 and 80 gallons: keep your size when replacing an electric tank that meets your needs, and go up a size when switching from gas. Certified models must reach a first-hour rating of at least 45 gallons, and DOE notes the EnergyGuide label isn’t required on them, so check the spec sheet. More in our water heater installation guide.
Heat pump water heater cost and savings
This Old House’s installation cost guide (updated June 17, 2026) puts heat pump water heaters at $2,500 to $3,500. Angi’s replacement guide (updated July 20, 2026) lists hybrid heat pump models at $1,200 to $3,500. Both are national figures.
ENERGY STAR estimates yearly savings over a standard electric heater of $270 for two people, $410 for three and $550 for four at 14.6 cents per kWh, assuming a $1,503 price premium and a 13-year life. See our water heater replacement cost guide, and are heat pump water heaters worth it for a payback example.
Heat pump water heater rebates and tax credit (2026)
In 2026, Efficiency Works pays up to $600, Xcel Energy $750 and Poudre Valley REA $350 toward an ENERGY STAR model, and Colorado’s $250 tax credit puts at least $83 on your invoice. Check current amounts with your utility before you buy.
| Program | Who qualifies | Heat pump water heater | Apply |
|---|---|---|---|
| Efficiency Works | Fort Collins, Loveland, Longmont and Estes Park city electric customers | Up to $600 replacing electric or propane, $400 replacing gas | Within 45 days |
| Xcel Energy | Xcel electric, gas or combined customers | $750 standard; nothing over 80 gallons | By September 30 of the following year |
| Poudre Valley REA | Members | $350, ENERGY STAR, 30 gallons or more | Within 90 days of purchase |
| Atmos Energy | Gas customers in Greeley and parts of Windsor | Rebates are for gas models: tankless up to $800, storage up to $700 | Within 60 days |
| Colorado tax credit | ENERGY STAR units installed in 2026 by a state-registered installer | At least $83 off your invoice | Nothing to file |
Amounts come from Efficiency Works’ January 2026 sheets and Xcel’s 2026 summary. Xcel’s fine print excludes some gas-only customers who get electric heat elsewhere, so homes with city electricity and Xcel gas should ask Xcel. The federal 25C credit ended with 2025 installs, and Colorado’s HEAR rebates closed August 1, 2026. Deadlines and stacking are in our guide to heat pump water heater rebates in Fort Collins and Loveland.
Colorado rules: the NOx law and the demand-response port
Colorado’s 2026 low-NOx rule doesn’t cover heat pump models, because it excludes products that don’t burn fossil fuels. Another part of HB23-1161 does: since January 1, 2026, new electric storage water heaters of 40 to 120 gallons (12 kW or less) sold in Colorado need a demand-response port compliant with AHRI 1430 (C.R.S. 6-7.5-105(5)(d)). The statute’s definition takes in heat pump models, as Rheem’s December 2025 regulations flyer confirms. It requires the port, not enrollment in a utility program.
When a heat pump water heater isn’t the right choice
- The only spot is cold or cramped: below roughly 40°F, or short of the manual’s air volume with no room for louvers or ducting.
- The only spot shares a wall with a bedroom.
- You need lots of hot water fast and can’t fit a bigger tank.
- Your gas home’s panel can’t take a new circuit. Angi’s July 2026 guide says fuel-switch wiring can run upward of $2,300, though a 120-volt plug-in may avoid it.
- You want the lowest upfront price. See water heater replacement in Fort Collins for standard tanks.
What happens when you call
- Call (970) 305-5633 with your fuel, tank size and location, and household size.
- Site check. We measure the room, find the nearest drain, and check your panel and any furnace nearby.
- Written quote and permit. Colorado requires a licensed plumber working for a state-registered plumbing business, under a permit (or a homeowner doing their own work on a home that is not for sale, a flip or a rental). Fort Collins charges $65 per water heater plus sales tax.
- Old heater out and hauled away. For a gas heater, we cap the gas line and check the vent, since a furnace left alone on a shared vent may not draft properly (DOE).
- Install. The tank set level, a cold-water shutoff, a full-size T&P discharge ending within 6 inches of the floor or a receptor, an expansion tank or drain pan where code requires one, and the condensate line.
- Start-up and inspection. We fill the tank before power goes on, since a dry element burns out at once (A.O. Smith), and set 120°F, which DOE calls safe for most households. Then the building department inspects.
What a complete written quote includes
- Make, model, size, first-hour rating, UEF and ENERGY STAR status
- The 240-volt circuit or 120-volt outlet, and any panel work
- Condensate route or pump, plus louvers or ducting if needed
- Labor, permit and inspection
- T&P discharge, shutoff valve, and any expansion tank or drain pan code requires
- Gas line capping and a vent check when a gas heater comes out
- Haul-away and any code upgrades
Every job is done by licensed plumbers and covered by liability insurance. Not ready to replace yet? See electric water heater repair.
Heat pump water heater FAQ
Is a heat pump water heater noisy?
It hums while the fan and compressor run. A.O. Smith rates its 120-volt Voltex at 45 dBA, and ratings vary by model.
Does a heat pump water heater need a drain?
Yes. Its evaporator coil makes clean, non-acidic condensate (ENERGY STAR), which must run to a drain or a condensate pump.
Will a heat pump water heater work in a cold basement?
Yes, if it stays roughly 40°F or warmer, though it leans on its backup elements more in winter. A.O. Smith says its 120-volt model’s elements take over below 37°F.
Can a heat pump water heater replace my electric water heater?
Usually, if the space has enough air and a drain. Electric tanks typically run on 240 volts (A.O. Smith), so a 240-volt hybrid can often use the same circuit.
Do heat pump water heaters need 240 volts?
Standard hybrids from Rheem and A.O. Smith do, on a dedicated circuit. Their 120-volt plug-ins use a standard outlet but recover more slowly.
Is there a tax credit for a heat pump water heater in 2026?
Not federally: 25C ended with 2025 installs. Colorado’s $250 credit goes to a state-registered installer, who must take at least $83 off your invoice.
Can a heat pump water heater go in a garage?
Only if it stays roughly 40°F or warmer all winter; ENERGY STAR says these units run less efficiently in colder spaces.
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Tankless Water Heater Installation
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Water Heater Maintenance
Flushing, anode rods and relief valve checks that extend tank life.
Learn morePhoto credits (Wikimedia Commons): Water Heater Installation: Tim Evanson, CC BY-SA 2.0; Tankless Water Heater Installation: Dinkun Chen, CC BY-SA 4.0.
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Call to have our licensed plumbers check your space and quote a heat pump water heater in Fort Collins, Loveland or anywhere in Larimer County.
Water heater replacement, repair and tankless installation for Fort Collins, Loveland and Larimer County. Written, itemized quotes and licensed plumbers.
Call (970) 305-5633