A spec mistake I made on my first HPWH install — and how to avoid it

Installed a Rheem ProTerra 50-gallon HPWH in my garage last spring. Took about 4 hours of actual work spread over two weekends (one to run the circuit, one for the physical install). It's been running 10 months and I have enough data to write an honest account.

What worked
The performance numbers are real. My water heating went from $28/month on gas to about $9/month on electricity at my PG&E rate — roughly $228/year in savings. COP in my mild Bay Area garage averages around 3.6 per the unit's monitoring app. The hot water recovery time is slower than a gas water heater but perfectly acceptable for a two-person household. The unit is noticeably quieter than I expected — about the volume of a window AC unit.

What I got wrong

First mistake: I didn't account for the cooling effect on the garage. The HPWH pulls heat from the surrounding air to heat the water, which is great in summer (free AC in the garage, essentially) but in winter it actively cools the space it's in. My garage isn't insulated and in January I noticed the unit was running its resistance backup element significantly more often than I expected, killing the COP. If I were doing it again I'd insulate the garage walls around the unit or build a small partition to isolate the unit from the adjacent crawl space where cold air infiltrates.

Second mistake: condensate drain location. I roughed in a drain line that drops into a floor drain six feet away. In summer when the unit is running the heat pump mode heavily, it produces a surprising amount of condensate — more than I expected. The drain line has a slight uphill run over about 18 inches and it occasionally backs up. A condensate pump ($35) would have avoided this. Install one regardless of your drain geometry.

Third mistake: I didn't enable demand response enrollment in the app. PG&E has a program that pays you to allow them to briefly defer the heating cycle during grid peak events. You get a bill credit, the unit smooths out its demand naturally, and you never notice the difference. Sign up for it if your utility offers it.

The $300 federal tax credit (25C) is real and easy
The Rheem ProTerra qualifies for the $300 Section 25C energy efficiency credit. Keep your receipt and the ENERGY STAR certification number. Claim it on Form 5695 Part II. If you're also doing a heat pump for space heating this year, you can stack these credits up to the $1,200 annual cap. If your state has an additional rebate (California has the TECH Clean California rebate, up to $1,000 for qualifying households), coordinate the state rebate with your contractor — the state rebate often requires licensed installation even if the federal credit doesn't.