Why the Yellow Energy Guide Labels Matter

As an installer, recommending a heat pump water heater (HPWH) to homeowners unfamiliar with anything beyond standard electric models might seem challenging. However, your best ally in highlighting the superior long-term savings of a HPWH might be right on the tank itself: the bright yellow EnergyGuide sticker.

Take, for example, this real-world example from a growing household that chose to upgrade their standard 36-gallon electric water heater to a 67-gallon HPWH. The EnergyGuide label on each water heater in the photos above shows how much energy it uses and how it compares to other electric water heaters. In this case, the label on the standard water heater says it will cost about $419 annually to operate, whereas the HPWH has a sticker saying it will cost just an estimated $201 per year. For the homeowner, this represented a drastic cut in annual water heating costs—even though the HPWH replacing it had almost twice the capacity!

Here’s why this matters:

1. Quick payback: The initial price of a heat pump water heater is almost certainly going to be higher than the price of a standard electric water heater. However, the annual savings mean homeowners can recover the difference quicker than they might think—often in as little as just 3 years.
2. Incentives sweeten the deal: HPWHs are the only electric water heaters eligible for most utility rebates. They also qualify for a federal tax credit of up to $2,000—combined, this can mean huge savings upfront.
3. A lifetime of savings: Help your customers think of a HPWH as an upfront investment. After all, those savings will continue over the heater’s lifespan and more than make up for that initial cost. ENERGY STAR® estimates a family of four will save $5,610 in the long run with a HPWH compared to a standard electric water heater.

As an installer looking to provide your customers with the best value, the EnergyGuide label is a persuasive tool to validate some serious savings claims. This sticker should empower you to recommend a HPWH and give your customers confidence that they are making the smarter choice—even when upsizing to a larger tank. It's an investment that pays for itself and continues to yield returns, reducing household energy expenses year after year.

By presenting these facts, you help demystify the cost of upgrading to a HPWH and reinforce the practicality of making the choice that will more than pay for itself. And if it sounds too good to be true, just refer to that bright yellow sticker.