Regulations and Incentives Drive U.S. Market for CO2 Hot-Water Heat Pumps, Says ECO2 Systems

The company updated its units to prevent the buildup of defrost ice for the growing New England market.

Decarbonization regulations and green rebate incentives at the state and federal level are moving the U.S. domestic hot water market towards heat pumps, said John Miles, Co-Owner of U.S.-based ECO2 Systems, in an interview at the 2023 AHR Expo held February 6–8 in Atlanta, Georgia .

The company offers SANCO2-branded air-to-water commercial and residential CO2 (R744) heat pump water heaters (HPWHs) for domestic hot water.

On a regional basis, the west coast of the U.S. “is driving the market for commercial heat pumps,” Miles said. The rollout started in the Pacific Northwest and has moved down into California. Seattle Permits Tip #424 says that for most new multi-family, hotel or commercial building construction in the Washington city, heat pump water heating (HPWH) must be provided.

New England is also turning to HPWH, said Miles, with Mass Save offering rebates up to $1,500 (€1,363) for replacing an existing Massachusetts residential electric, natural gas, propane or oil water heater with a qualified heat pump installed by a licensed plumber.

ECO2 Systems also expects to benefit from the federal IRA (Inflation Reduction Act) incentives available for heat pump installations – up to $2,000 (€1,818) annually in tax credits, noted Miles.

Offering a heating capacity of 4.5kW (1.3TR), ECO2 Systems’s split system consists of an outdoor refrigeration circuit and indoor water tank that provides hot water at ambient temperatures below -25°F (-31.7°C). “I have guys installing this in the northeast telling me it’s -25°F [-31.7°C], and it’s still running,” said Miles, adding that the units do not need the electrical backup required by R134a units at low ambient temperatures.

The company recently updated its units for residential use in the New England marketplace to include an electric element in the bottom to prevent ice buildup from defrost cycles during harsh winter weather, helping to “ensure unit reliability,” said Miles.

Insulated water storage tanks range in size from 43 to 505gal (208 to 1,912l) with hot water draw recovery supplied by more than 20gal (76l) per hour of up to 150°F (65.6°C) water sent to the top of the tank by the heat pump, says ECO2 Systems on its website. The residential units draw less than 2,000W of power, making them compatible with solar photovoltaic panels.

The company recently updated its units for residential use in the New England marketplace to include an electric element in the bottom to prevent ice buildup from defrost cycles during harsh winter weather, helping to “ensure unit reliability,” said Miles.

Return on investment

The initial cost of CO2 heat pumps is double that of HFC systems, Miles remarked. However, the cost is made back in a few years by the unit’s performance efficiency, the faster recovery rate and reduced installation costs. Its COP ranges from 5.5 to 4.2 to 2.6 for ambient temperatures of 80, 47 and 17°F (26.7, 8.3 and -8.3°C), respectively.

The CO2 HPWH units use 20% of the energy used by electric resistance water heaters and roughly 60% of that used by hybrid HPWHs. In addition, the unit uses a 15amp breaker, which reduces installation costs by keeping it in the parameters of existing residential boxes, Miles said, unlike other HPWH options.

According to ECO2 Systems’ brochure, its unit has the highest UFHR (Uniform First Hour Rating) of any comparably sized electric or heat pump water heater. “The natural refrigerant (CO2) used by the SANCO2 allows it to make and store hotter water than any other heat pump water heater,” it says.

The brochure also notes that the SANCO2 system employs invertor rotary compressors and DC fan and water-pump motors to improve efficiency.

In 2020, Miles and Maho Ito started ECO2 Systems by acquiring the rights to sell Japanese OEM Sanden’s CO2 HPWH in the North American marketplace. Miles and Ito marketed the OEM’s heat pumps in North America prior to the acquisition.

“I have guys installing this in the Northeast telling me it’s -25°F [-31.7°C], and it’s still running.”

John Miles, Co-Owner of ECO2 Systems

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