Hybrid, or heat-pump water heaters use a heat pump to pull heat from the surrounding air and put it into the water heater, which also has resistance elements to heat water when conditions won't permit the heat pump to work properly, or when more hot water is needed than the heat pump can produce. Those conditions include very hot temperatures and fairly cold ones.

They are far more efficient than typical electric water heaters, but cost more and have issues that complicate their use. Because they have a fan, care must be used when installing them not to block the intake or outflow. They also have a filter that must be cleaned regularly or the unit won't work properly, if at all.

Attics may be too hot at times, and garages and basements too cold for the heat pump to work. If they are installed in living space, they can be a boon in the summer because they dehumidify and cool the air, but that can be a problem in the winter.

Finally, they produce condensate, and a pipe must be provided so that the condensate will flow to a drain or outside.

Chris Gray of Southern Power gave a presentation at the ACEEE Hot Water Forum in May 2011 on issues the utility encountered when testing heat-pump water heaters in the field.

(Pictured is an electric Voltex heat-pump heater, photo courtesy of A.O. Smith.)