Rheem wins race to deliver integrated technology with an ENERGY STAR-certified, heat pump water heater, shipped today to PowerSouth Energy Cooperative. Eligible for federal tax credits, the HP-50 offers more than twice the energy efficiency of a standard electric model while providing homeowners with a fast payback.

PowerSouth Energy Cooperative today welcomed its first shipment of Rheem HP-50 heat pump water heaters at its Andalusia, Ala., headquarters facility. The arrival of this much-anticipated, inaugural shipment made Rheem the first manufacturer to announce the delivery of fully integrated, ENERGY STAR-compliant, high-efficiency heat pump water heaters to a utility. PowerSouth serves the wholesale energy needs of 16 electric cooperatives and four municipal electric systems in Alabama and northwest Florida.

Combining a heat pump and two backup electric elements into a single storage-tank package, the new HP-50 offers an Energy Factor (EF) of 2.0 — more than twice the efficiency of a standard electric storage model. As a result, the units qualify for ENERGY STAR certification as well as a federal tax credit amounting to 30% of the installed cost (up to $1,500 tax credit) if installed before December 31, 2010, under the American Recovery and Reinvestment Act (ARRA) of 2009. State and utility rebates and incentives also apply. See your tax advisor for details.

“We are very excited about the energy-saving potential of this new Rheem product, especially with its ENERGY STAR rating,” says Debbie Marcum, Member Services Manager at PowerSouth. “We look forward to evaluating this innovative technology to determine how it will enhance our ability to build our member relationships by providing reliable, competitively priced wholesale power.”

True breakthrough: Rising home energy costs and growing demand for high-efficiency and high-performance water heaters to blunt the impact of those rising costs are two of the primary factors driving the debut of the new Rheem heat pump water heater. “This product marks the first time that utilities and their customers have access to an electric storage water heater with operating costs comparable to those of a tankless gas water heater, but with a significantly lower installation expense on retrofit projects,” notes David Hanning, Director of Product Development for Rheem Water Heating.

Carrying a limited 10-year warranty on the tank and parts, the new product also offers two other critical benefits:

Fast payback: Instead of directly heating stored water with a conventional electric element — or with a burner, as in the case of a gas unit — a heat pump water heater transfers available heat from the surrounding air into the water, a far more energy-efficient process. “The average annual operating cost for this technology will be $248, compared with $550 for a standard electric water heater,” says Rheem product manager Tommy Olsen. “Payback on the Rheem heat pump water heater can come in less than two years, if federal tax credits and state/utility rebates and incentives are used.”

Replacement-friendly design: Intended for residential applications, both new construction and the replacement of an already installed water heater, the unit has a storage capacity of 50 gallons, but measures only 21 inches in diameter and is 75.5 inches tall. This slimmer, more portable profile makes installation in spaces with restricted access — including attics and basement mechanical rooms — much easier. “With its small footprint, this new unit is an easy retrofit product for existing electric installations,” Olsen comments. “Minor re-plumbing is probably the only installation adjustment a homeowner will need. If a 240-volt electric service is located nearby, the unit can replace a gas model as well.”

Heat pump water heating technology is not a new phenomenon, but the idea of melding the heat pump with the apparatus of an electric water heater in a single, integrated package is a true breakthrough. The new integrated product would supersede current split-system technology that usually involves one of two approaches: 1) mounting a compressor/coil package directly onto a standard electric water heater, which typically voids the tank warranty; or 2) placing the compressor/coil package in a remote location and plumbing it to the water heater. Additionally, current split system heat pump water heaters have much lower energy efficiency ratings, are not ENERGY STAR-compliant and do not qualify for federal tax credits.

Accelerated timeline: The new integrated Rheem HP-50 heat pump water heater was brought from initial conceptualization to production in fewer than 20 months, or roughly twice as fast as the normal cycle for a product of this complexity, according to Hanning. “We are very proud of the accelerated timeline, which was made possible by leveraging the considerable strengths of both of our major divisions — the heat pump expertise of Rheem Heating & Cooling and the water heater expertise of Rheem Water Heating.”

Rheem’s manufacturing prowess has played a vital role as well. The electric water heater portion of the product is built in Rheem’s Nuevo Laredo plant in Mexico. It is then transported across the street to the Heating & Cooling production facility for final assembly with the heat pump. “We are a company that eats, sleeps and breathes the water heating and HVAC businesses,” says Hanning, “Looking to combine high efficiency and high performance in one package, we thought it crucial that this new product be a home-grown affair, made in our own facilities.”

Consequently, Rheem’s heightened sense of urgency in bringing its integrated heat pump water heater to market was not permitted to overshadow reliability considerations. “The rigorous reliability testing process we developed several years ago for our FVIR [flammable vapor ignition resistance] gas storage products has been fully applied to the development of the new heat pump water heater,” says Hanning, who also notes that the HP-50 complies with Underwriters Laboratories standard UL1995

Maximizing performance: A good example of this drive to maximize performance can be found in the way the Rheem integrated design avoids the traditional operating limits of split heat pump water heater systems with regard to hot and cold ambient temperatures. Air-source heat pump water heaters perform best in climates with average, year-round temperatures above 40°F. They also require at least 1,000 cubic feet of surrounding air space, the size of a 10x10x10-foot room. Ideal locations include attics and garages where excess heat is commonly found. Alabama Power recently estimated that 60% to 70% of water heater installations in the Southeast are in attics. The unit’s narrow 21-inch diameter will fit through attic access doors.

When the temperature of the surrounding air is less than optimum, the new Rheem heat pump water heater automatically switches from its primary Energy Saver setting, in which the heat pump provides 100% of the needed hot water at an EF of 2.0, to a temporary backup mode of “Electric Heat Only.” (See below.)

Touch Pad Operation Modes

Mode 1— Energy Saver: The most energy efficient setting, the Energy Saver mode works by extracting warmth from the surrounding air, concentrating the heat, and delivering it to the water. This mode provides an industry-leading 2.0 EF and a first-hour delivery comparable to a standard 50-gallon electric model.

Mode 2 — Normal: When hot water demands are high, use the Normal setting. In this mode both the heat pump and electric element will operate as needed. The Normal mode will provide a remarkable 1.5 EF and a first-hour delivery in excess of a standard 65-gallon electric model.

Mode 3 — Electric Only: A temporary Electric Heat Only setting is available to ensure hot water availability without operating the heat pump. The HP-50 will revert back to Energy Saver operation after two weeks, if not reset by the user.

Mode 4 — Temperature Setting: This mode allows the homeowner to adjust the water temperature range.

Mode 5 — Off: Shuts the unit down

Rheem is uniquely qualified: “Our experience with tankless water heaters over the past five years has proven that better-grade technology definitely has a market in this country, as Americans cope with rising energy expenses,” says Hanning. “Meanwhile, our research indicates there will be a strong demand for an integrated heat pump water heater. It must offer an attractive energy savings payback story, fast first-hour hot water delivery, and a replacement-friendly design. This unit meets all three criteria, with a cost-of-operation on a par with tankless gas water heaters, and superior cost savings over standard gas and electric water heaters. As energy costs inevitably go up, the rationale for this type of high-efficiency/high-performance water heater only becomes more compelling.”

NOTE: Publication-quality photograph of the image shown in this press release can be downloaded at the following location on the web:
http://www.LNCmail.com/pr09/rh0920/rheem-power-south.html

About Rheem Manufacturing Company
Rheem Manufacturing Company (www.rheem.com) is a privately held company with headquarters in Atlanta. In its 82nd year of operation, the company manufactures a full-line of high-quality residential and commercial heating and cooling systems; tank, tankless and solar water heaters; swimming pool heaters and commercial boilers throughout North America and world markets. The premium brands of Rheem Manufacturing Company include Raypak, Ruud and Rheem. Rheem Manufacturing Company is the official heating, cooling and water heating supplier to Richard Childress Racing and Kevin Harvick Inc. as well as the major associate sponsor of the No. 29 Sprint Cup^® car driven by Kevin Harvick, 2007 Daytona 500 Champion, 2007 Craftsman Truck Series Champion and 2006 Busch Series Champion. Rheem is also the primary sponsor of Kevin Harvick Inc.’s No. 33 and No. 77 cars in Nationwide^® Series and sponsor of KHI’s 2 and 33 entries in The Craftsman Truck Series.