Tank to Tap

Original report by Urban Green Council • November 12, 2025

New Yorkers rely overwhelmingly on fossil fuels to heat the water we use for showers, dishes and laundry. These systems may be hidden in basements, but their impact is clear: they pollute our air and produce 20 percent of the state’s residential greenhouse gas emissions. Transitioning to clean, efficient water heating will help New York progress toward its climate goals while creating healthier, safer homes.

Heat pump water heaters are the most effective way to decarbonize water heating in New York’s single-family homes. And 650,000 homes are strong candidates to make the leap to clean, highly efficient electric water heating today.

The market has evolved. Newer generations of this decades-old technology are more efficient, quieter, lower cost and easier to install. The equipment is readily available at local home improvement centers. And policy levers—from all-electric new construction requirements to federal appliance standards—are transforming the industry.

For residents, it’s the service that matters—hot water on demand. With the right design, heat pump water heaters meet that demand, often at a lower cost. Behind the faucet, these systems use far less energy than conventional ones, produce no on-site pollution, make homes safer by eliminating flammable fossil fuels, and decrease exposure to dangerous levels of air pollutants like carbon monoxide (CO) and nitrogen oxides (NOX), which are linked to high rates of asthma and cardiovascular illness.

At the same time, heat pump water heaters aren’t yet a practical option for every New York home. The biggest barrier is affordability. While the technology uses less energy, it costs more up front and likely won’t mean lower utility bills for residents switching from gas water heaters. Homes without basements or with very high water demands may face installation challenges with current models.

In this report, we examine the state of New York’s residential heat pump water heater market and outline the path to scaling clean, efficient, and affordable hot water for single-family homes across the state.