A heat pump water heater is a type of water heating system that uses electricity to move heat from one place to another instead of generating heat directly. This technology can be two to three times more energy efficient than conventional electric resistance water heaters. Heat pump water heaters work by pulling heat from the surrounding air and transferring it, at a higher temperature, to heat water in a storage tank. They can be used as a stand-alone water heating system or as a combination water heating and space conditioning system. These water heaters are also known as hybrid electric water heaters and can switch to standard electric resistance heat during periods of high hot water demand. While they are highly energy efficient, one of the drawbacks is the upfront cost, which can be higher compared to standard water heaters.