Heat pump water heater in an unheated garage — does it still pay back when it's cold in there? Hot Water

The efficiency gap is big enough that it survives a cool garage, just not intact. Rough ratios: a standard electric resistance tank sits around 0.9 on the efficiency metric while a heat pump model is in the 3.5-4.0 range, so in good conditions you're looking at something like a third of the running cost. In a 5-10°C garage you lose some of that and the unit falls back to its resistance elements more often in deep cold. Check the model's stated minimum ambient temperature before you buy anything.

The second garage issue is that it dumps cold air back out. Fine in a garage in summer, actively annoying if that garage shares a wall with a room you heat. Mine made the adjacent utility room noticeably colder and I ended up insulating the shared wall, which was not in the budget.

Worth knowing the federal 25C energy efficiency credit expired at the end of 2025, so if you were counting on that specific credit for a 2026 install, it isn't there any more. State and utility rebates are still where to look and some of them are substantial. Check the official programme page rather than a contractor's flyer, because the flyers lag by a year.

Numbers from my install: the running cost difference has been roughly $30-40 a month for a family of four against the old resistance tank, and it's less than that in the coldest months. My payback landed somewhere in the four-to-six year range. Yours will move mostly with your electricity rate — do the sum with your own rate off your own bill, not a national average.

Noise is a compressor hum plus a fan, roughly like a dehumidifier running. Through a stud wall it's noticeable at night if a bedroom is right there. Through a garage wall it's nothing.

In a genuinely cold garage I'd want a good hybrid control mode, or I'd put the tank inside and give up the closet. The efficiency figures people quote are measured in comfortable rooms, not in 5°C.