Should I install a heat pump water heater?

A heat pump water heater uses electricity to move heat from the surrounding air into the water rather than generating heat directly, making it two to three times more efficient than conventional electric water heaters. It can save a typical household up to $300 per year on energy costs. They work best in basements or unconditioned spaces that stay above 40 degrees. The upfront cost is higher, but federal tax credits and utility rebates can offset the difference. They also dehumidify the surrounding area.