Heat Pump Water Heater Calculator in Tennessee
See whether a heat pump water heater is worth it in Tennessee. Compares operating costs against electric, gas ($1.05/therm), or propane using local rates ($0.122/kWh).
Data last updated July 2026. Sources & methodology
What Tennessee Residents Should Know
Electricity in Tennessee averages $0.122 per kWh — well below the national average. For a typical three-person household, heating water with a standard electric resistance tank costs roughly $373 per year, while a heat pump water heater doing the same job draws about a third of the electricity, costing around $98. That gap, roughly $275 every year, is what pays off the higher upfront price.
Against natural gas the math is closer but still favorable in Tennessee: at $1.05 per therm, a standard gas tank costs roughly $162 per year for the same household, versus about $98 for a heat pump water heater. Whether the difference justifies switching depends on installation cost and how long you plan to stay — run the calculator above with your actual numbers.
One practical note for Tennessee homeowners: heat pump water heaters need roughly 700–1,000 cubic feet of surrounding air and run best in a garage, basement, or utility room that stays above about 40°F, since they pull heat from the air around them. With a typical 10–15 year lifespan, the annual savings above usually repay the higher purchase price well within the unit's service life.
With the federal 25C credit having ended December 31, 2025, state and utility programs are now the main incentives — Tennessee residents can access up to $800 through state heat pump programs, and many utilities offer their own water heater rebates of $300–$1,500. Heat pump water heaters typically install for $2,500–$4,000, so these rebates meaningfully shorten the payback period.
Avg. Electricity Rate
$0.122/kWh
Avg. monthly bill: $140
Regular Gas Price
$2.90/gal
Natural gas: $1.05/therm
Incentives in Tennessee
Federal clean energy tax credits ended in late 2025 under legislation passed in July 2025; they are shown below for reference since recent purchasers may still claim them. State programs are governed separately and many remain active — always verify current details with the program before purchasing.
| Incentive | Type | Amount | Description |
|---|---|---|---|
| Energy Efficient Home Improvement Credit (Heat Pump - 25C)Ended | tax credit | 30% | Federal tax credit of 30% up to $2,000 for qualifying heat pumps. Ended December 31, 2025 — systems placed in service after that date do not qualify. State and utility heat pump rebates remain available in many states. |
| TVA EnergyRight Heat Pump Rebate | rebate | $800 | Up to $800 for a qualifying air-source or dual-fuel heat pump (17 SEER2+), delivered through local power companies via a Quality Contractor Network member. |
Heat Pump Water Heater in Tennessee: Frequently Asked Questions
- Is a heat pump water heater worth it in Tennessee?
- For a typical household in Tennessee, a heat pump water heater uses about a third of the electricity of a standard electric tank — roughly $98 a year versus $373 — saving about $275 annually, which is what pays back the higher purchase price.
- How much does a heat pump water heater cost to run in Tennessee?
- At Tennessee's $0.122/kWh rate, a heat pump water heater costs roughly $98 per year to run for a three-person household.
- Are there rebates for heat pump water heaters in Tennessee?
- Yes. Tennessee programs including TVA EnergyRight Heat Pump Rebate can help, and many utilities add water-heater rebates of $300–$1,500. The federal 25C credit ended December 31, 2025.
Run the Heat Pump Water Heater Calculator
Use our free calculator pre-filled with Tennessee data to see your personalized results.
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