Multifamily Central Heat Pump Water Heater Storage and Control Strategies for Energy Savings and Affordability

This study evaluates the energy savings, affordability impacts, and load-flexibility potential of central heat pump water heater (CHPWH) systems with enhanced controls in multifamily buildings. Decarbonization goals, increasing electrification efforts, and growing interest in grid-interactive technologies have highlighted CHPWH systems as a promising alternative to conventional central gas water-heating systems. While CHPWHs can substantially reduce greenhouse gas emissions and energy consumption, the value of advanced controls and load-shifting capabilities for multifamily applications remains insufficiently understood. The project combined literature review, product research, stakeholder engagement, energy modeling, and cost-effectiveness analysis to assess CHPWH configurations, control strategies, implementation costs, and performance outcomes. The team evaluated 59 commercially available products from 15 manufacturers and developed a custom EnergyPlus model of a multifamily CHPWH system with thermal storage and enhanced controls. Simulations were conducted using three representative domestic hot water draw profiles and multiple load-shifting schedules designed around utility time-of-use periods. Total system benefits (TSB), utility bill impacts, and implementation costs were evaluated using the CPUC Cost Effectiveness Tool and California utility tariffs. Results show that CHPWH systems eliminated 2,199-2,406 therms of annual natural gas consumption and achieved total annual energy savings of 38,440-49,374 kWh relative to a baseline central gas water-heating system. Enhanced controls reduced on-peak electricity consumption by more than 95% compared to CHPWH operation without load shifting, while annual TSB ranged from $22,419 to $35,032. However, higher electricity costs and additional implementation costs resulted in negative customer on-bill cost-effectiveness under current utility rates. The findings demonstrate that CHPWH systems with integrated plant-level controls can provide significant energy, emissions, and grid benefits. Expanding incentive mechanisms and cost-effectiveness frameworks to better recognize load flexibility value may be critical to accelerating broader market adoption.