2023 Hybrid Water Heater Cost, Installation, Options

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Hybrid water heaters are quickly becoming a hot topic in the water heating industry, and for good reason.

The main drivers behind their widespread adoption are energy efficiency and low operational costs. 

To install a new hybrid water heater, contact your local plumbers for FREE ESTIMATES!

What Is A Hybrid Water Heater?

As the name suggests, a hybrid water heater combines the benefits of a traditional electric water heater with those of a tankless water heater.

A hybrid water heater might use electricity to operate.

But most of the time, it heats water using the thermal energy in the surrounding space, resulting in reduced water heating bills for a household.

Did you know? The US Department of Energy estimates that water heating takes up to 18% of household utility bills. And installing a hybrid water heater can save you around $300 annually.

Hybrid Water Heater Average Cost

The average cost of installing a hybrid water heater ranges between $4,000 and $5,300.

Hybrid Water Heater Cost Breakdown

Unlike a traditional water heater, installing a hybrid water heater will require the help of a professional plumber.

So labor costs will significantly contribute to the final budget.

Usually, the job requires two plumbers working 4 to 6 hours, so the labor cost might range between $1,200 and $2,500, depending on the average labor costs in your region.

The average cost of a hybrid water heating unit is $2,500.

You’ll also have to pay for materials and supplies, which will cost around $650.

So the total average ranges between $4,000 and $4,300.

Please note that this number can significantly drop because you can still find high-quality hybrid water heaters for as low as $1,699.

Expense Cost
Hybrid water heater unit $2,500
Materials and supplies $625
Labor for two plumbers working 4 to 6 hours $1,200 to $2,500
Total $4,000 to $5,300

The final cost can also quickly go up.

For example, if you’re switching from a gas water heater, you’ll need to replace the gas lines and hire an electrician to complete the wiring before installing the hybrid unit.

Things To Consider Before You Buy A Hybrid Water Heater

Here are a few things to consider before buying a hybrid water heater.

Fuel Source

Hybrid water heaters use natural thermal energy from the surrounding air to heat water.

So they are best for people living in areas with high temperatures (preferably between 40 F to 90 F).

If the temperature is not that high, the system will opt for electricity, and you’ll incur additional electricity costs.

Tank Capacity and Water Heater Size

Getting the right capacity and water heater size is essential in ensuring that your system remains energy efficient and never runs out of hot water, especially during peak hours.

The water heater size depends on the household size and the hot water needs of each person.

You don’t want a tank that’s too big for your household because that would mean unnecessary high upfront costs.

Similarly, you don’t want a very small tank because you’ll likely run out of hot water, especially during peak hours.

You have to get the size right.

Generally, the following gallon sizing for different household sizes is recommended.

  • Two adults or one child and one adult – 50 gallons
  • Three adults or two adults and two children – 65 gallons
  • Four or more adults – 80 gallons

Pro Tip: When it comes to sizing, it’s best to discuss it with a professional plumber so they can help you reach the final decision. They can estimate the gallon size that will best meet your expectations and help you achieve your energy savings goals.

How Much Space You’ll Need

Installation of a hybrid water heater involves setting up a tank that occupies at least 1,000 cubic feet of open space.

The height of the tank is more than 80 inches, so that’s something you might want to consider as well.

As you can see, this option is not realistic for tiny homes and apartments.

If you have a small space, you might consider other options, like a tankless water heater.

Do You Save Money With A Hybrid Electric Heat Pump Tank Water Heater?

Yes, a hybrid water heater is a great way to save money on water heating bills.

It is energy efficient because it uses thermal heat from the surrounding air to heat water.

In a year, a household with two people can spend around $150 on the unit’s operation. This is far less than an electric water heater, which would cost the same household around $900 to operate.

On average, a household of four can save around $3,500 on electricity bills over the unit’s lifetime.

How Do I Know If A Hybrid Electric Heat Pump Tank Water Heater Is Right For My Home?

Here are some questions you can ask to determine if a hybrid electric heat pump tank water heater is right for your home.

Do You Already Have a Gas Water Heater?

Generally, a hybrid water heater installation for individuals who already have a gas water heater installed is not recommended.

Replacing the gas lines and setting up new electric fixtures is usually an extra expense that’s not worth it.

What Are the Average Temperatures in Your Region?

This is the primary consideration when deciding whether a hybrid water heater is right for your home.

These units use thermal energy to heat water and are best for people living in areas with temperatures between 40 F and 90 F.

If the temperatures are below this range, you’re better off with an electric water heater.

If temperatures fall below these levels, the unit will automatically switch to electricity mode, which will pump up your bill.

Pros of Hybrid Water Heater

Great Cost Savings and Return on Investment

The Department of Energy estimates that a household with two people spends around $900 a year operating an electric water heater.

With a hybrid water heater, this amount is just $150.

So, a hybrid water heater is an excellent choice for those who want to reduce their water heating bills.

Homeowners can save around $4,700 in ten years, enough to recoup the initial investment for most people.

After that, you’re technically heating water for free or significantly cheaper than those using an electric water heater.

Durable and Easier to Maintain

A hybrid water heater pump can last up to 15 years if well-installed.

They are also easier to maintain compared to electric water heaters.

Best Suits Hot Climates

If you live in a hot environment and spend a lot of money on cooling bills, then go for a hybrid water heater.

It draws in hot air from the surrounding, absorbs the heat, and emits cold air, leaving your home nice and cool.

It Is a Smart Water Heating System

With a traditional electric water heater, you must know where different controls are to operate it.

You can run a hybrid water heater using a mobile application.

Some things you can do through the mobile app include:

  • Regulate the temperature of the water.
  • Switch to various modes such as vacation mode and high demand mode.
  • Check when the next maintenance is scheduled.
  • Check for tank leakages, which might help prevent damage to your property.

No Need to Upgrade the Electricity

Installing a tankless water heater usually requires upgrading the electricity to meet the new electrical requirements.

With a hybrid water heater, you don’t need to upgrade the electricity.

As it is, the heater doesn’t need much electricity because it heats water using the warm air in the home.

Pro Tip: Reserve the high-demand mode for special occasions. For example, when hosting visitors who need a consistent hot water supply. Most hybrid water heaters switch to electricity when in high-demand mode. So, if you’ll be using this mode all the time, you might as well go for an electric water heater.

Cons Of A Hybrid Water Heater

Expensive Installation Costs

Installing a hybrid water heater is 25% more expensive than installing a traditional electric water heater.

The cost might be over the budget for some homeowners.

Installation starts from around $3,200 and might rise depending on the brand, the size of the heater, and the model.

They Are a Bit Noisy

A hybrid water heater might not be a good option if you’re in a noise-sensitive space.

They generate around 0.56 decibels of noise, similar to what you get from a window air-conditioning unit

. But fret not. Some units are less noisy, with as low as 0.49 dB.

Require More Space

Hybrid water heaters require more than 1,000 square feet of space.

As a result, they might not be suitable for small homes and apartments.

Not the Best for Cold Environments

Considering that hybrid water heaters use the thermal energy from the warm air in your home, they will leave you spending more on heating bills, which doesn’t make financial sense.

If you’re in a cold environment, opt for models designed for a cold climate, such as Rheem Performance Platinum.

However, you’ll still use electricity, even if you opt for these units.

Not Recommended for DIY Installation

Unlike an electric water heater, you can’t install a hybrid water heater yourself.

It needs professional plumbers for the installation, making it more expensive.

Hybrid Water Heater Reviews

Individuals who installed hybrid water heaters had the following to say about the product.

  • High Return on Investment and Cost Savings – Buyers say that their water heating bills have been greatly reduced thanks to a hybrid water heater. They are also happy that their cooling bills have drastically dropped because the unit draws in hot air and emits cold air.
  • Expensive to Buy and Install – Some buyers complain that the unit is too expensive compared to traditional electric water heaters.
  • Generous Warranties – Hybrid water heater models come with warranties that are more generous than those provided by electric water heaters. Most models have a 10-year warranty on the tank unit, a 10-year warranty on the parts, and an additional warranty on the labor.
  • Requires More Space – Many customers complain that the units don’t work well in residential closets. You need a larger space, such as a garage or a large utility room, to get the most out of the unit. You should also consider the height, which is slightly over 80 inches.

Who Makes The Best Hybrid Water Heaters?

If you’re looking for the best hybrid water heater, consider the brands listed below.

Rheem Performance Platinum is arguably the best hybrid water heater brand overall.

They are affordable because their units cost around $1,699, much lower than the market average of $2500.

The units are also well-engineered and less noisy.

The noise range is just .49 dB and can be tolerated by most homeowners.

The next best brand is AO Smith Signature Premier.

Their 50-gallon units start at around $1,799, and their noise range is 0.51 dB.

They are not much different from Rheem Performance Platinum but saving $100 could be a deal worth taking.

What Size Hybrid Water Heater Do I Need?

We recommend the following hybrid water heater sizing for various water heater tanks.

  • 50-gallon water heater – Go for an 85-gallon hybrid water heater.
  • 40-gallon water heater – Go for a 65-gallon hybrid water heater.
  • 30-gallon water heater – Go for a 50-gallon hybrid water heater.

Please note that the above are simply estimates. Consult your plumber on the best hybrid water heater sizing for your home.

What Is The Difference Between A Regular Water Heater And A Hybrid Water Heater?

The significant difference between a regular and a hybrid water heater is that the former uses electricity.

In contrast, a hybrid water heater uses the warm air it draws from the surroundings to operate, with electricity as a backup.

Is A Hybrid Electric Water Heater Better Than Gas?

A hybrid water heater is significantly less expensive than a gas water heater.

However, regarding reliability, a gas water heater is the obvious contender.

The reliability of a hybrid electric water heater is not guaranteed in cold environments. You’ll have to switch to the electricity mode for the unit to continue operating.

Hybrid Water Heater vs Tankless

Tankless is the best option for you if you’re always running out of hot water.

Tankless is also great for businesses that need a constant hot water supply.

These include:

  • Restaurants
  • Laundromats
  • Daycares
  • Healthcare

A tankless water heater supplies hot water on demand.

It doesn’t need to store water or keep it warm when it is not being used.

It is energy-efficient because you don’t have to keep the system running the whole day. As a result, you won’t have to pay to heat the water you’re not actively using.

Furthermore, it doesn’t need a tank, so it works perfectly even in small spaces.

Tankless is also an excellent option for individuals who don’t meet the installation conditions of a hybrid water heater, including space and temperature needs.

But again, if you simply have a personal preference for tankless water heaters over hybrid water heaters, then feel free to go for them.

How Loud Is A Hybrid Water Heater?

A hybrid water heater is pretty loud.

The noise range we see in many models is approximately 0.56 decibels, similar to what you get from a window air-conditioning unit.

However, a few models, such as the Rheem Performance Platinum, are a bit less noisy, with a range of about 49 dB – think of it as a low hum.

If you’re in a noise-sensitive environment and 49 dB is still loud for you, you’ll have to consider other water heater options.

Does A Hybrid Water Heater Work In Winter?

A hybrid water heater will continue working even in winter.

However, the unit will use electricity because there’s no warm air to generate energy.

Pro Tip: During winter, switch to electricity mode to prevent your heating bills from rising.

How Long Does A Hybrid Water Heater Last?

A hybrid water heater can last for about 15 years, which is long enough for you to recoup your investment and earn some savings.

Is It Time To Replace Your Heater?

Just because a hybrid heater is cost-effective and offers a high return on investment doesn’t automatically mean that you should replace your heater.

Consider other factors before making the final decision.

For example, homes that are already connected to a gas line are better off remaining with gas models because switching to a hybrid water heater will incur extra expenses.

You’ll need to remove the existing gas lines and pay an electrician to complete the wiring and ensure that the breaker is correctly sized to fit the requirements of a hybrid water heater.

Smaller spaces are better off with tankless water heaters because installing a hybrid water heater requires a larger open space.

If your home is all electric, you have enough space, and the temperatures in your region are high enough, then installing a hybrid water heater is your next big move.

Is It Worth Getting A Hybrid Water Heater?

A hybrid water heater is a worthy investment, especially for those who live in the South, where temperatures are high.

It is energy efficient and will save you lots of money on water heating bills.

If you’re spending a lot on space cooling, this is an excellent choice to cool your home at no extra cost.

If you’re planning to stay in your home for the entire lifespan of the unit, then the unit will pay you back the money you invested in it and even bring you some profit.

If you don’t plan on staying in the home for that long, you’ll lose some of your investment.

Unfortunately, a hybrid water heater might not be the best option for people in a cold climate.

It is also not the best option for people living in small spaces or who are already connected to a gas line.

Expanding the space or replacing the gas lines will incur additional costs that might be expensive in the long run.


Hybrid water heaters are a creative solution to make home more energy efficient.

If you live in a hot climate, a hybrid water heater will heat your water and cool your space at the same time.

But these units are not for everyone.

People living in cold regions or those with smaller spaces may be better off with a tankless electric water heater.

About Leo Bender

Leo has been a contractor since 2003, specializing in: roofing, siding, general contracting (GC) and residential remodeling. Leo is also a Certified HVAC, Oil & Gas Heating Technician/Installer. In addition to roofing and remodeling, Leo is passionate about Solar, green building and energy conservation, so a lot of my time and energy goes to installing energy efficient heating and cooling systems.

See more about Remodeling Calculator team here

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One comment on “2023 Hybrid Water Heater Cost, Installation, Options

  1. Burnice Bauch

    The hybrid water heater article provides a comprehensive overview of this energy-efficient option! The breakdown of how it works, its benefits, and cost considerations offers valuable insights for homeowners. Thanks for sharing this informative resource!