Reliable hot water is critical for restaurants for preparing food and washing dishes and equipment, as well as hand washing. However, water heating is one of the biggest energy users in restaurants. Heating water for restaurant use accounts for 16 percent of all commercial gas usage in California[1]. Food service buildings are among the highest intensive energy users on a per-square-foot basis, largely because of their hot water usage. Foodservice operations may soon feel the pressure to electrify. In September 2022, the California Air Resources Board[2] voted to ban the sale of new natural gas furnaces and water heaters by 2030.

Doing so will be difficult, particularly for existing restaurants. Many food service operations, especially small and independent businesses, do not have the space for the size of a storage tank that would be required for a heat pump water heater. Restaurants in California, as with most states, are legally required to have sufficient hot water to meet all these demands under peak conditions.

In response to these challenges, an emerging technology, the heat pump-assisted water heater, is gaining traction. It is designed to meet this existing gap between what the market needs and the cost and challenges of installing available heat pump water heaters. It is geared to meet the needs of existing food service businesses that want to be able to transition to a heat pump while still retaining the benefits of their current water heating system.

With funding from CalNEXT – California’s statewide emerging technology initiative – the TRC Advanced Energy team recently published a report, “Market Potential for Heat Pump Assisted Hot Water Systems in Foodservice Facilities.” This report, which TRC Advanced Energy developed with research support from Frontier Energy and Energy Solutions, assesses the benefits and challenges of adopting heat pump-assisted water heater technology for a range of food service establishments.

“Heat pump-assisted water heaters are a solution that we have available today,” said Amin Delagah, Associate Director of Research and Consulting for TRC Advanced Energy, an environmental services provider. “Heat pump water heater adoption rates in restaurants are still very low due to a lack of familiarity, space and electrical capacity requirements and primarily, the health department water heater sizing regulatory barrier, but the heat pump assist concept is a solution that we can move forward today to overcome these barriers.”

The heat pump-assisted water heater, as its name suggests, is designed to operate in series with an existing water heater, which makes it attractive for restaurants that do not want to overhaul their current system completely. During down times for the business, the existing heater would maintain the recirculation temperature of already heated water in its system. During off hours, the heat pump-assisted water heater would produce sufficient hot water to restock the system. Because the existing heater is already large enough to meet food service needs during business hours, the heat pump-assisted water heater system can be built to fit the available space, even if it is undersized.

The benefits of using a heat pump-assisted water heater are similar to those of a heat pump: improved energy efficiency and possibly lower long-term energy costs, although cost issues largely depend on the type of system being replaced. Natural gas fuel, which is used by 90 percent of food service operations for water heating, is currently cheaper than electricity in most of California.

Heat pump systems also provide cooling as a byproduct, which could be useful to counteract kitchen heat.

Heat pump-assisted water heaters are designed to address the big disadvantage of heat pump water heaters for restaurants – the longer time needed to heat the water from cold. One workaround is a much larger tank, but floor space is typically at a premium in restaurants, making this workaround unappealing for many food service operations. For a heat pump water heater to meet health department requirements, it would need a much bigger tank than its gas-fired counterpart (because the gas-fired water heater can heat water faster).

Heat pump-assisted water heaters may also be cheaper to install than a conventional, retrofitted heat pump water heater system, and the heat pump-assisted water heater does not need to meet these sizing regulations because the legacy water heater still functions as a backup system. At this point, the technology is still emerging and has not been installed commercially, but the authors estimate that initial costs for the heat pump water heater that acts as the assist, including installation, could range between $6,000 to $20,000. This amount, while significant, is still much cheaper than what it could cost a full-service restaurant to install a heat pump water heater capable of meeting water demands, which could well exceed $100,000.  

“The costs for heat pump assisted heat pumps are largely driven by the electrical work and the space required, and there may be incentives available to offset these,” Delagah said.

Another benefit is that because the heat pump-assisted water heater is a backup system, it does not require health department approval, making the process simpler.  Both heat pump water heaters and heat pump-assisted water heaters also have the additional operational benefit of being able to benefit from time-of-use rates and the additional cooling they could provide for kitchens.

“This year in October, it was 95 degrees in the Bay Area,” Delagah said. “There are new California OSHA[1] rules on the books for indoor temperatures – if your facilities are over an 82°F temperature indoors, you have to provide cooling centers for employees. That’s becoming an emerging concern for restaurants to meet a new heat illness standard.”

On the downside, the higher upfront costs will likely still be a significant barrier to the adoption of heat pump-assisted water heaters, even if they are relatively less expensive than heat pump water heaters.

One big hurdle is that health departments, by and large, are not familiar with the technology – and may be more resistant to its approval. The relatively high price of electricity in California, compared with gas, may be another barrier.  Yet regulations and the need to decarbonize are moving closer, with California’s 2030 deadlines for reducing its overall greenhouse gas emissions by 40 percent, in comparison with 1990 levels. Restaurants are well positioned to be the public face of doing their part.

“This is great equipment for restaurants that are thinking about positioning themselves for where things are going in terms of air quality regulations,” Delagah said. “If you’re a chain restaurant, you should probably be trying this out, kicking the tires a bit, and preparing for what your solution is going to be when there is a mandate.”

1. This statistic comes from earlier research conducted by the same author, “Energy Efficiency Potential of Gas-Fired Commercial Water Heating Equipment in Foodservice Facilities” (Delagah and Fisher 2009),

2. https://ww2.arb.ca.gov/our-work/programs/building-decarbonization/zero-emission-space-and-water-heater-standards/faq

3.  https://www.dir.ca.gov/dosh/heatillnessinfo.html

To learn more about this project, read the report on the CalNEXT website.