State guide

Heat Pump Water Heaters in Arizona

Heat pumps make financial sense in Arizona. Estimated savings: $564/yr vs a standard electric tank.

$564/yr savings/4.3 yr payback/3 rebate programs/15.4¢/kWh (15% below avg)

Rebate programs are active in Arizona. Apply before funds run out.

Running cost Rebates Best fits

Score breakdown: 71/100

Savings

35/55

Rebates

18/20

Climate

12/15

Install

6/10

RatingPlate Score. Based on EIA energy prices, ENERGY STAR data, state rebate programs, and permit research. Not a government rating or purchasing recommendation. FAQ

Arizona electricity is 15% below the national average. Here's what that means for heat pump operating costs.

Running cost in Arizona

At Arizona's 15.4¢/kWh electricity rate, the most efficient heat pump water heater saves an estimated $564 per year compared to a standard electric tank.

Arizona electricity

15.4¢

per kWh (EIA, 12-month avg. through Aug 2026)

US average

18.0¢

per kWh

Best HP annual cost

$128

A. O. Smith HPTS-50-2

Electric resistance

$693

~4,500 kWh/yr baseline

Inlet water temperature (62°F annual average) is close to the DOE test standard (58°F). Rated UEF values are a reasonable approximation of real-world performance.

Heat pump vs gas tank in Arizona

At Arizona prices (15.4¢/kWh electricity, $1.95/therm gas), a heat pump costs about $205 less per year to run than a standard gas tank, on the same DOE rated hot water load. See replacing a gas water heater in 2026 and all 50 states compared.

Heat pump

$132/yr

855 kWh/yr (median 50-gal)

Gas tank

$337/yr

173 therms/yr (UEF 0.64)

Difference

$205/yr

heat pump cheaper

Both use the DOE medium draw test load (55 gallons a day). Gas price: EIA, 12-month avg. through Aug 2026. Replacing gas with a heat pump also means adding a 240V circuit (or choosing a 120V model) and a condensate drain, and the federal HEAR rebate no longer covers gas replacements.

Why Arizona changes the call

01Energy cost

Arizona electricity is 15% below the national average. That directly affects how much a heat pump saves compared to a standard electric tank.

02Climate impact

Incoming water averages 62°F annually and drops to about 52°F in winter. Colder water means the heat pump works harder and real efficiency is slightly lower than rated.

03Available incentives

State and utility rebates can significantly change the payback period. Check what's currently available before finalizing your decision.

Rebates in Arizona

Arizona has 2 rebate programs plus an active IRA HEAR point-of-sale rebate as of November 2026.

The federal $2,000 tax credit (IRA Section 25C) expired December 31, 2025. State and utility rebates listed below may still be available. Verify current status at the links provided.

SRP Heat Pump Water Heater Rebate

$500

Who: Salt River Project
Eligibility: ENERGY STAR certified HPWH with UEF 2.8 or better. Permanent SRP residential electric customer in a home with SRP service for more than one year. No new construction. Installed by an Arizona-licensed plumbing contractor before April 30, 2027. Apply within 6 months of installation. Once every 10 years.
https://www.srpnet.com/energy-savings-rebates/home/rebates/heat-pump-water-heater

TEP Efficient Home Water Heating Rebate

$400 bill credit

Who: Tucson Electric Power (TEP)
Eligibility: TEP residential customer. New ENERGY STAR HPWH with a wireless programmable timer/controller, purchased and installed during the 2024-2026 program period. One rebate per account per program period.
https://www.tep.com/efficient-home-water-heating/

IRA HEAR Rebate (Point-of-Sale)

Up to $1,750

Status: Launched in Arizona. Income-qualified: under 80% AMI for full rebate, 80-150% AMI for 50% rebate.
Electric-to-electric only: Under federal guidance effective May 29, 2026, this rebate covers replacing an existing electric water heater (or new construction). Replacing a gas, propane, or oil water heater no longer qualifies.
Arizona's federal HEAR program, Efficiency Arizona, is open to households at or below 150% of area median income and lists heat pump water heater rebates of up to $1,750 (as of October 2026). Under revised federal rules effective September 1, 2026, rebates cover replacing existing electric appliances; switching from gas to electric no longer qualifies.

Install requirements in Arizona

Electrical

Dedicated 240V, 30A circuit (most models). Some newer 120V plug-in models exist but most residential units require 240V. Check the unit's nameplate for exact requirements.

Condensate drain

Heat pump water heaters produce condensate during operation. A condensate drain line to an approved location (floor drain, condensate pump, or exterior) is required.

Air space

Approximately 700 cubic feet of surrounding air (roughly a 10x10x7-foot room). The heat pump extracts heat from surrounding air. Insufficient air volume reduces efficiency and can cause the unit to underperform. Some manufacturers allow ducting to supplement air supply in smaller spaces.

Noise

Heat pump water heaters produce operational noise similar to a window AC unit (45-55 dB). Consider placement away from bedrooms.

Best fits for Arizona

A smaller set of representative fits using Arizona's 15.4¢/kWh rate. Curated to show different trade-offs instead of listing every published model on every state page. See the full heat pump lineup.

Lowest running cost

A. O. Smith

HPTS-50-2

Lowest annual bill at this state's electricity rate.

$128/yr 46 gal UEF 3.80 63" tall

Best efficiency

GE Profile

PH80S10BPY01

Highest UEF in the published lineup.

$173/yr 80 gal UEF 4.40 76.375" tall

50-gallon sweet spot

Bradford White

RE2HP50-1NCTT

Common replacement size for 1 to 3 people.

$129/yr 45 gal UEF 3.89 64.125" tall

Large-household pick

Noritz

NHP120

Higher first-hour rating for heavier simultaneous demand.

$226/yr 109 gal UEF 3.38 85" tall

Tight-space pick

Bradford White

RE2H50S

Shortest cabinet among the published options.

$145/yr 45 gal UEF 3.44 59.1875" tall

Prefer to buy online? The 45-gallon Rheem PROPH50 T2 RH400-30 is a heat pump available on Amazon.

Check price and availability: Rheem PROPH50 T2 RH400-30 on Amazon (paid link)

Common questions: Arizona

Is a heat pump water heater worth it in Arizona?

Yes. Arizona scores B on RatingPlate's analysis, with estimated savings of $564 per year compared to a standard electric tank. Payback on the higher upfront cost is roughly 4.3 years before rebates.

What rebates are available for heat pump water heaters in Arizona?

Arizona has 2 utility or state rebate programs plus an active IRA HEAR program. Since May 29, 2026, the HEAR rebate only covers replacing an existing electric water heater, not a gas one. Check program pages for current amounts and eligibility, as funding can change.

How much does a heat pump water heater cost to run in Arizona?

At Arizona's electricity rate of 15.4 cents per kWh, the most efficient heat pump water heater costs about $128/yr to run. A standard electric tank costs about $692 per year.

Do I need a permit for a heat pump water heater in Arizona?

Arizona does not have unusual state-level requirements beyond standard plumbing and mechanical permits. Check with your local building department for jurisdiction-specific rules.

What is the payback period for a heat pump water heater in Arizona?

Without rebates, the payback period in Arizona is approximately 4.3 years based on $564 in annual savings versus a standard electric tank. With available rebates, payback could be significantly shorter.

Your next click

All heat pump modelsCompare specs across brands Back to homepageCompare other types or find a specific model Lowest cost: A. O. Smith$128/yr in Arizona Sizing guideWhat size do you need? Replacement cost guideEquipment, labor, and hidden costs Heat pump vs gas tanklessCompare technologies across fuel types

Sources

Electricity and natural gas rates: U.S. Energy Information Administration, residential sector (EIA, 12-month avg. through Aug 2026).

Rebate data compiled from state energy offices, utility program pages, DSIRE, and ENERGY STAR. Rebate amounts and eligibility change frequently. Verify at listed program URLs.

Inlet water temperatures estimated from NOAA climate normals using the Burch-Christensen mains water temperature model (NREL).

Model specifications from ENERGY STAR certified product data and manufacturer spec sheets.

Page updated November 1, 2026. Data freshness varies by source.

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