| Getting your Trinity Audio player ready... |
Last Revised: 11/4/25
Are your energy bills higher than expected? Did you know that your water heater accounts for 15% of your home’s total energy usage?
If you’re looking to cut energy costs, you’re not alone. Switching to a more efficient water heater is one strategy that’s gaining traction. And if that’s the route you’re evaluating, then you’ll want to consider the most energy-efficient water heater on the market: a Hybrid (Heat Pump) Water Heater.
At Mattioni, we’ve spent over 75 years helping homeowners make smart, energy-conscious decisions for their homes. We know how confusing water heater options can be – so in this article, we’ll answer the question:
Will a hybrid water heater lower my energy bills?
The short answer is yes – and in many cases, those savings can be substantial.
But the full answer depends on several key factors we’ll break down in a clear, homeowner-friendly way. After reading, you’ll have the insight needed to make the right call for your home.
What is a Hybrid Water Heater?
A hybrid water heater – also known as a heat pump water heater – is a system that combines a traditional tank with high-efficiency heat pump technology.
Here’s what sets it apart: instead of generating heat, it pulls warmth from the surrounding air and transfers it to the water in the tank. Think of it like a refrigerator running in reverse.
During periods of high demand, the system can switch to using electric resistance coils to keep up – hence the name, “hybrid.” But the vast majority of the time, it operates in heat pump mode, using far less electricity and generating significant energy savings.
While tankless water heaters have gained popularity – especially for smaller homes or high-demand households – hybrid models often outperform them in energy efficiency and long-term savings.
Do Hybrid Water Heaters Really Save You Money?
Yes – and here’s why.
Instead of creating heat from scratch, a hybrid system moves heat using refrigerant and a compressor. That’s much more efficient than burning fuel or running resistance coils.
The best way to compare efficiency is through the Uniform Energy Factor (UEF), which measures how effectively a water heater converts energy into hot water. A water heater with a UEF of 0.90 means 90% of the energy it consumes goes toward heating water – while the rest is lost,
Here’s how common models compare:
- Standard Tank Type Water Heaters: 0.60-0.70 UEF
- Tankless Water Heaters: 0.85-0.97 UEF
- Hybrid Water Heaters: 3.1-4.0 UEF
For example, the Rheem ProTerra Hybrid Water Heater achieves a UEF of up to 4.0 – which means it delivers up to four times more hot water per unit of energy compared to a standard model. It’s not just an upgrade – it’s a leap forward in performance.
5 Factors That Will Impact Your Energy Savings
Every home is different. That’s why your actual energy savings from a hybrid water heater will depend on a mix of the following:
1. Your Current Water Heater
Switching from an older electric model could cut your water heating energy use by 50% or more. If you’re switching from natural gas or propane, savings may be more modest – but still meaningful.
The bigger the efficiency gap between your old system and the new one, the more you save.
2. Your Hot Water Usage
High-usage household – multiple showers, laundry loads, or dishwashing cycles – see the biggest benefits from efficiency gains.
The more hot water you use, the more you can save.
3. Installation Location
Hybrid models work best in spaces that stay above 50°F, like basements, garages, or utility rooms with good airflow. Cooler or cramped areas may cause the unit to rely on its less-efficent backup mode.
4. Local Electricity Rates
The higher your electricity cost, the more each kilowatt-hour saved translates to dollars on your bill. In places like Pennsylvania, hybrid water heaters are often a strong financial investment.
5. Rebates & Tax Incentives
ENERGY STAR certified models often qualify for utility rebates and federal tax credits, which reduce the payback period and make installation more affordable. All incentives are made outside of Mattioni, however we’ll help make sure you qualify.
Pro Tip: When we evaluate your home, we take all five of these factors into account to give you a realistic customized savings estimate.
Case Studies: How Much Can Real Homeowners Save?
Let’s look at what independent studies have found when measuring savings from hybrid water heaters in real homes.
Study 1: National Renewable Energy Laboratory (NREL)
Region: Massachusetts & Rhode Island
Sample: 14 hybrid water heaters monitored over 18 months
- Savings ranged from 10% to 62%
- Median energy reduction: 50%
- Estimated cost savings: $150-$450/year
Takeaway: If your current water heater is electric and installed in a conditioned or semi-conditioned space, you could cut your costs in half.
Study 2: MA Energy Efficiency Advisory Council (MA EEAC)
Region: Massachusetts
Sample: 50-gallon units with UEF ~3.5
- Energy savings: ~1,540 kWh/year
- Estimated annual cost savings: $250-$400/year
Takeaway: Higher local electricity rates increase your savings – and help offset installation costs faster.
Study 3: Northeast States for Coordinated Air Use Management (NESCAUM)
Region: Northeast & Mid-Atlantic (including PA)
Type: Modeled analysis (not field-tested)
- Estimated savings in PA: $150-$450/year
- Savings are higher when switching from electric or propane
Takeaway: Even homes with gas systems can see solid savings, especially with high water usage or electric backup.
More Benefits of Hybrid Water Heaters
In addition to energy savings, hybrid water heaters also offer:
- Longer lifespan than standard electric models
- Built-in dehumidification in warm climates
- Reduced environmental impact
- Eligibility for rebates and incentives
Are There Any Drawbacks?
Like any system, hybrid models aren’t one-size-fits-all. Here’s what to consider:
- Upfront Cost: Typically higher than standard water heaters, though often offset by rebates and long-term savings.
- Space Requirements: Works best in areas with adequate airflow and ambient warmth (50°F+).
- Backup Mode Usage: During heavy use, the system may rely on electric resistance mode, which uses more energy.
For most households, these tradeoffs are easily outweighed by lower energy bills and long-term performance.
Hybrid vs. Tankless: Which is More Efficient?
Many homeowners compare hybrid and tankless systems when considering an upgrade.
Tankless water heaters:
- Heat water on demand
- Save space
- May struggle with high simultaneous demand
- Typically reach 0.85-0.97 UEF
Hybrid heat pump water heaters:
- Store water in a tank
- Deliver 3.1-4.0 UEF
- Offer higher efficiency and better all-electric performance
- May require more space
Ready to Maximize Your Energy Savings?
You now understand how a hybrid water heater is the most efficient model on the market today – often saving homeowners $150-$450 or more every year. And thanks to rebates and tax incentives, switching has never been smarter.
At Mattioni, we’ve helped countless families upgrade their water heaters with confidence over our 75+ years in business. Here’s what our team will do for you:
- Assess your current system
- Provide a personalized energy savings estimate
- Help you qualify for rebates and tax credits
- Recommend the best model for your space and needs
Are you curious whether a hybrid water heater is right for your home? Schedule a consultation today or call us at (610) 400-8510 – we’ll help you make the best choice for your home and budget.
