GE GeoSpring Hybrid Electric Water Heater: Good Investment?

I’m normally not excited by water heaters, but I do love the idea of investing small money upfront to lower my expenses and save big money in the future. We currently have a 10-year old electric water heater which I’d like to replace soon due to age and inadequate size. We live in a warmer climate and thus considered a solar hot water heater, but the combination of cost and having to cut and install water pipes through our roof didn’t sound especially fun. I just saw that until October 5th, Lowe’s is selling the GE GeoSpring 50-Gallon Hybrid Electric Water Heater for $999. Currently, both and Sears also have it at $999. If you can get free delivery in your area, one may be cheaper than the other. Both Lowe’s and Sears offer another 5% off if you have their store credit card.

Tax credits. There is a Federal tax credit of $300 available on electric heat pump water heaters. In addition, check for state energy rebates here, and you may get even more back (look carefully, as many states have already exhausted their rebate funding). Without anything local available for me, this makes the net cost $700. A conventional 50 gallon electric heater with a shorter warranty can be found for about $300, with a 9+ year warranty runs about $400. This makes the cost difference with no state credits to be no more than $400. Both could be installed yourself if you’re handy, otherwise installation is extra.

Potential $2,400 in savings. With average electric cost assumptions, this heater is supposed to save about $25 a month, or $320 a year in electricity costs. If you have your electric bill handy, you can do the math yourself as a 50-gallon standard electric tank water heater uses about 4881 kWh per year vs. the GE Hybrid water heater at 1856 kWh per year. Using their standard numbers, this hybrid system would pay for itself less than two years. Assuming a 10-year usage, you would then have 8 years x $300 a year = $2,400 of potential total savings.

What’s a hybrid water heater? It’s called a hybrid because it can heat up your water using a heat pump as well as the conventional electric resistance coil. I was having flashbacks to my thermodynamics college courses while learning about it, but essentially a heat pump takes the heat from ambient air and transfers it into the water. This is kind of like an air conditioner in reverse, which takes the heat in the air and moves it outside with the aid of a refrigerant like Freon. The heat pump is more energy efficient than the electric coil, but slower, so the coil is still there as a backup during times of high demand. A heat pump works better in warmer climates, as there is more heat in the air. You’ll also end up with condensation which will need a drain unless you want to empty out a water pan every few days.

The added complexity of the heat pump does make for more things to go wrong, which is why I suppose it comes with a rather long warranty. It is worth the upfront investment? I think so for us, but I’ll haven’t fully run the numbers on a similar whole-house tankless system. Thoughts?


  1. If you are buying at lowes with an amex card, you can save an extra $40:

    ($40 off a $200 purchase with amex platinum)

  2. Solar was the way to go for us; Solar H20 and a whole house PV System. It’s all been installed and just waiting on final inspections. The Solar H2O is fantastic. I’ll never look back. Between local energy company and Federal Tax Credits, it will be less than $1000 and has already lowered my bill substantially. And the hot water is hotter than any I have ever had. Definitely tops out at over 155°. The install was cake and I have no worries about that at all. And I’ll also have hot water when the power fails.

  3. Going from electric to a hybrid should save you money in the long run. Going from gas to a hybrid in my house would actually cost me more. If you have gas service available do the math on that. The group that was pitching the hybrid almost had me sold until I looked at the average electric cost they were using to run it. It was almost half of what our per-KWH cost was and made no sense to move from gas after some quick math.

  4. Do you even spend $25/month on your current water heater electric costs outside winter? I have had a meter hooked to my 14yr old 40g conventional electric water heater since March and our monthly electric costs for the water heater between April and August this year were less than $25/mo.

  5. I should note I added a timer to my water heater electric so that its only powered on ~12hrs day – I suspect that has made a big difference and we haven’t noticed any difference with our hot water.

  6. I think a lot of it can be determined from factoring in where you live, effeciency and age of current heater, size of home and number of users, availability of gas or other energy sources…. etc. In many areas 25% of each energy dollar goes to heat water.

  7. Have you considered a gas water heater? At least Where I live (Chicago suburbs) natural gas costs roughly 3 times less than electricity!

    Unit conversions. 1 kwh = 3412 btu. 1 therm = 100,000 btu. Ergo 1 therm = 29.4 kwh.
    Average electric rate $.125/kwh = $3.675/therm. Current natural gas rates are around $.99/therm. So electric is quite a bit higher.

  8. Ha! Shortly after I posted, I found a link where somebody came to a similar conclusion:

  9. @Victor

    A lot of areas don’t have natural gas. I got the same e-mail Jonathan (presumably) got, and was excited for a few seconds until I realized it was an electric heater. Even an efficient heater like this would almost certainly increase my hot water costs, as NG is dirt-cheap compared to electricity, as you’ve pointed out.

  10. @Victor

    I think you also need to consider the efficiency of gas vs electric water heaters. Here’s a quote from

    There is another label on new water heaters listing that unit’s “Energy Factor.” It’s a number with a decimal point, usually listed on a separate tag beside the EnergyGuide.

    The higher the “Energy Factor” number, the more efficient the water heater. Gas water heaters have energy factors between 0.5 to around 0.7. Electric models range from 0.75 to 0.95.

    Those Energy Factor numbers show that electric models make better use of energy, primarily because gas water heaters lose some of their energy up the exhaust vent. However, new gas water heaters boast more efficient combustion than older ones, meaning that less heat escapes up the flue, and less gas is needed to heat the water. Gas efficiency has improved.

    But since electrical energy usually costs three times more than gas, in most of California it’s still cheaper to use natural gas, if you have a choice.

  11. When I was researching this heater for myself, I recall reading a lot of horror stories about working with their warranty service and how frequently they seem to break. I do like the idea of a more efficient water heater, but I resolved to wait a few generations until they work out a few more kinks.

  12. @MattyG – Do you mind if I ask what geographical area or state you live in? I like Solar PV as well. $1,000 installed is pretty darn cheap.

    @Tim – Interesting, I actually don’t have natural gas service in my neighborhood, so that’s not an option for me. The actual cost of electricity vs gas in any given area does seem to matter a lot in the calculations.

    @2million – Seems like a smart idea, I just have to stop taking those late night showers.

    @Bill – The energy factor on these heat pump hybrids are usually greater than 2. This GE one is like 2.35.

    @ArnabC – I read some of those in the Lowe’s reviews as well, but I couldn’t find anything on Consumer Reports about reliability ratings.

  13. Here’s a link I found to find local renewable energy tax credits (solar hot water):

    The rebates can be really good, but also very localized.

  14. @ Jonathan: I am in So Fla. The $1000 was for the Solar H2O. Not he PV. For me the PV will end up being about $10k out of pocket. Closer to $30k in total costs; but one third is paid by my local energy company (a pilot program for incentives) and another third is Federal Tax Credit. I got a total home system that has just been completed. 25 PV panels, lo-flo pool pump and Solar Hot Water. So far, I love it.

  15. Buy an Intermatic EH40 water heater timer. Really customizable. My water heater comes once in the morning for 20 mins and 1once in the pm for @ 2 hours. Weekends have different programs. It’s easy to wire, has battery back-up, and saved me some $, a lot more than its @$60 price tag. Why spend $1000 when you can buy a cheap timer & some insulation wrap?

  16. It’s really too bad you don’t have gas service. Gas water heaters are dramatically cheaper. When I first saw the geospring earlier this year I was also very intrigued until I compared costs and saw that a good quality gas heater (and even the cheaper gas heaters) was still dramatically cheaper. Anyone who has natural gas – don’t even bother looking at the geospring unless you happen to have a huge solar array on your property that can provide most of the power for it.

  17. If you are buying it from Lowe’s or Home Depot, go to the post office, and ask for a change of address kit. Use the 10% off Lowe’s coupon inside at either store (Home Depot takes Lowe’s coups and vice versa). You’ll save $100 up front. You can’t stack this with the 5% discount you get from the Lowe’s cc, to my knowledge.

  18. I purchased one of these last year, one month after having a 7.5kw grid-tied solar electric system (from Solar City) put onto the roof. It replaced a 20 year old gas water heater that came with the house I purchased in May 2008. My total average gas/electric utility bill has dropped from over $200 a month to under $50. Some months its as low as $24.

  19. I think there might be some false advertising going on or some small print we are missing. The Federal tax credit is for “10% of cost up to $500 or a specific amount from $50 – $300” The specific amount for the Electric heat pump is $300. If the cost is $1000 then you will only get $100 in tax credit. It changes the calculations slightly and I would agree with a previous post that it is highly unlikely that you are spending $25 on your water heater now, so the saving would be less.

  20. I bought the geospring. It’s awesome, other than it does make some noise.

  21. I bought it through Lowes because they have the 11 year extended warranty for $115. Much cheaper than Sears.

  22. Bummer that you do not have gas as a choice.

    This is not relevant to you, then, but we bought new construction green energy house in 2001. Instead of solar power, CFLs, etc., focus on house is really lower cost alternatives (plus focus on insulation and natural cooling/heating). Anyway, hot water heater is just traditional tank heater, fueled by gas. But, a very efficient model. No doubt the system was significantly cheaper than any other green option. Our gas bills are literally $240 per year – we also have a gas furnace and cook almost daily on our gas stove. I obviously don’t see the point to go solar or tankless or hybrid. (I have lived in a more mild California climate, and in smaller places with less people, and have never had heating/gas bills anywhere this low!)

  23. Regarding relative efficiency of Gas, Electric, and Heat-pump water heaters:

    I’ve been looking at the GE hybrid water heater as well. Combining the federal and state incentives, our net cost would be around $450, so it’s worth considering a switch from gas, especially since we need to use extra electricity to get the full feed-in-tariff payments from our solar PV system.

    @Victor is correct about the energy content conversion between therms and kWh (1 therm = 29.4 kWh), but we have to consider the efficiency of both models. As @Bill notes, even resistive electric heaters are somewhat more efficient than gas models (best I can tell, the ‘practical’ conversion would be something like 1 therm = 20-23 kWh).

    More importantly, the heat-pump is much more efficient than resistive heating. At a moderate ambient temperature, it produces about 3X as much hot water per kWh. So if we’re comparing to gas, that makes 1 therm equivalent to approximately 7-9 kWh.

    Gas rates here in Oregon are about $1.10/therm, and electric rates are about $.11/kWh, so the heat-pump heater comes out slightly ahead. I’m still not sure it pays for the additional cost or warrants the added complexity, but it’s at least roughly competitive with gas.

    Has anyone else done similar calculations? Mine are pretty rough; I’d be happy to see more exact numbers.

    One caveat: it looks like the recovery rate is considerably slower. About 8 gallons per hour when running on the heat pump vs. around 20/hour for a resistive electric heater and even more for gas. So if your whole family likes their long hot showers, you might look elsewhere.

  24. Jonathan:

    Do you think you could do a future follow-up article to this? I would like to see a more in depth analysis of all potential appliance savings ideas in the home, especially since bank accounts are paying nearly 0%. It may make sense to “invest” in your own house at current interest rates.

    Tankless Water Heater vs. Solar vs. Gas vs. Electric vs. Hybrid?

    Benefit to replace now even though the old one still works?

    How to sell the old working one to recoup some cash?

    Solar Panels & Wind Turbines vs. buying electric from the electric company?

    Alternatives to forced air furnaces? Is wood cheaper? Costs for geothermal? etc

  25. @ Tommy: I can tell you that so much of the answers that you are looking for truly depends on where you live. I live in So Fla (the Sunshine State, right.. lol..) well when I first looked into going whole-house solar (1.5 years ago), it would have cost me (out of pocket) about $22k – that was with the federal tax incentives. Come this past June, our local utility announced some incentives as well… to the tune of $11.2k. Well now I was looking at 4 to 5 year return on investment rather than 8 to 10… huge difference. Also after that 8 years, it’s making me money and electricity. So I took the plunge. BUT, that varies hugely with timing and location. Believe it or not NJ is one of the best places to convert to solar. That is because the state is very pro solar with their incentives compounded by NJ’s very high energy rates. NJ consumers can also trade RECs and sell back at a higher rate for their over production. We here in FL only can sell back extra produced energy at wholesale rates. There is much research that a person has to do if they are considering this major conversion. For me it was right to do it when I did it, how I did it and where I did it. But a month or two either way could have killed it.

    I can tell you that my “old” water heater was less than two years old and rather than scarp it, I threw it up on craigslist and had it gone for $200 in a hour.

    As for my solar water heater, it’s great. I love it. Water has never been hotter and I’ll have hot water even during a power outage.

  26. @MattyG – Thanks for the info. I got a quote for my house and usage patterns in 2007 when I bought it, and PV was $40k before incentives. Four years later, it is only about $27k before incentives, and electricity costs have gone up. After incentives, solar is getting much more reasonable.

    @Ack – Thanks for timer model suggestion. Will look into it.

    @Dancin, Alexandria – Sounds like natural gas would be nice, I don’t even know how much it costs in my area. I know that some neighbors who are chefs actually installed a huge propane tank system so they could cook with gas on their fancy Viking stoves.

    @Susie – Good idea on moving packets. Also would add the possibility of buying gift cards on the secondary market like Cardpool, etc. to save another 7% or so.

    @James – 7.5 kW nice! I’m hoping to get by with less, but I live in mild climate.

    @Linus – I don’t quite understand what you’re saying. It says “or” a specific amount. This rebate is for a specific amount. The heat pump electric heater gets a flat $300 rebate as long as the energy factor is greater or equal to 2. This one is 2.35.

    @Murdy – $115 extended warranty, worth considering. Not sure of details about labor coverage on 10-year GE manu. warranty.

  27. We purchased one in December. Unfortunately, with the addition of a kid at the same time, it has been difficult to track changes/savings. I will say that it works quite well for us as a family of four on economy mode. HOWEVER, you definitely have to manage it for those busy crunch times. You’ve basically gone from “set it and forget it” to sometimes pressing buttons to turn it into high-demand mode. Once I forgot to set it back from high-demand. At that point it is less efficient than a standard electric heater. Fortunately, it was only for a few days.

    To note: We replaced a 34 year old 80 gallon water heater that was on a timer. It had so much mineral sediment in it that it took four guys to haul it out. The installer had to call in for help.

  28. Flush your water heater every 1 to 2 years otherwise the heat will dissolve unwanted minerals into your water. Best to turn off the power to the heater in the morning, take your shower then turn off the water and hook a hose up to the water heater and drain it. After that turn on the water supply and flush it until clear water runs out.

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