What is the Measure?
Commercial food-service kitchens often experience short periods of high hot water demand during food preparation, dishwashing, cleaning, and sanitation activities. Heat pump water heater (HPWH) systems with thermal storage are designed to meet these varying loads while reducing reliance on conventional gas-fired water heating. The addition of thermal storage allows the system to store hot water ahead of peak usage periods, reducing reliance on heat pump recovery alone.
This measure applies to restaurants, cafeterias, institutional kitchens, and similar commercial food-service with concentrated hot water use for ware washing, food preparation, cleaning, and sanitation facilities. Depending on project goals, HPWH systems with thermal storage can support either partial or full electrification of domestic hot water (DHW) systems. This approach can help advance building electrification goals while reducing on-site fossil fuel use and associated emissions.
Key Functional Components
Most commercial kitchen HPWH systems include the following key components:
- Central Heat Pump Water Heater: Uses refrigerant to transfer heat from a source, typically surrounding air, into water.
- Larger Shared Primary Thermal Storage: Stores heated DHW for later use and provides a reserve during periods of high demand.
- Distribution and Recirculation Systems: Deliver hot water to kitchen fixtures and equipment while maintaining hot water availability throughout the system.
- System Controls: Monitor and coordinate operation of the heat pump, storage tanks, pumps, and supplemental heating equipment.
- Supplemental Heating and Boosters: Provide additional capacity during peak demand or higher delivery temperatures for specific kitchen equipment, where needed.
How It Works
HPWH systems operate differently than conventional gas-fired water heaters. Instead of generating heat through combustion, the heat pump transfers heat from the surrounding air into water.
Heated water is stored in shared primary thermal storage, which serves as a reserve during periods of high demand. As stored hot water is used, the heat pump continues heating and replenishing the storage system to maintain reliable hot water service.
Hot water is distributed to kitchen fixtures and equipment through the building’s DHW system. Depending on the building layout and end-use requirements, recirculation, temperature maintenance, supplemental heating, or booster equipment may be needed to maintain delivery temperatures. Controls coordinate operation of the primary system components to support reliable performance and efficient operation.
When to Consider This Measure
HPWH systems with larger or multiple shared primary thermal storage tanks are particularly well suited for commercial food-service kitchen applications where DHW demand varies throughout the day and reliable hot water service during peak periods is essential.
This system is generally easiest to implement in new construction and major renovation projects because equipment rooms, storage, piping, electrical infrastructure, and controls can be coordinated early in design. Retrofit projects may also be feasible but often require additional review of available space, electrical capacity, equipment access, and construction phasing. Project teams should also review applicable plumbing, health, sanitation, and local code requirements, including any equipment that may require supplemental heating or booster systems.
System Design Considerations
When designing a commercial food-service kitchen HPWH system, project teams should begin by evaluating the facility’s DHW demand profile, including peak draw periods, operating schedules, and required delivery temperatures. Heat pump capacity and thermal storage should be sized together to provide reliable service during peak operation.
Project teams should evaluate available space, electrical capacity, heat-pump location and airflow requirements, equipment access, condensate drainage, refrigerant requirements, noise, and installation conditions early in design. Coordinating these considerations can help simplify installation, particularly for retrofit projects where existing infrastructure may limit equipment placement or storage capacity.
Coordinating the primary system components can improve system efficiency while maintaining consistent hot water availability. Projects with predictable operating schedules may also benefit from control strategies that support load shifting.
Designers should also consider long-term operational needs when developing the overall DHW strategy. Planning for future expansion or system modifications early in design can simplify future upgrades.
System Configurations
This measure supports two system configuration pathways for commercial food-service kitchens: a hybrid central heat pump water-heating system with instantaneous gas supplemental heating and a fully electric central heat pump water-heating system. Both approaches use a central HPWH system with shared primary thermal storage to serve the commercial kitchen DHW load.
Figure 1: Hybrid Central Heat Pump Water Heating System with Instantaneous Gas Supplemental Heating
A hybrid configuration combines a central HPWH system, shared primary thermal storage, and an instantaneous gas water heater. The HPWH and storage system serve as the primary water-heating strategy, while the instantaneous gas water heater provides supplemental capacity as needed.
For CEDA eligibility, any supplemental gas water heater must be an instantaneous, tankless system integrated with the overall central HPWH domestic hot water plant.
Figure 2: Fully Electric Central Heat Pump Water Heating System with Shared Primary Thermal Storage
A fully electric configuration uses a central HPWH system with shared primary thermal storage tank and no fossil-fuel-fired water
heating equipment. The HPWH and storage system are designed to meet the kitchen’s peak DHW demand while maintaining required delivery temperatures during normal operation.
Supplemental electric resistance heating may be used for peak demand or redundancy but must be limited to less than 20% of annual domestic hot water heating energy. Electric booster heaters may be used for equipment requiring water above 120°F, in accordance with health codes and equipment specifications. The HPWH and shared primary thermal storage must remain the primary source of water heating.
Note: The schematics provided in this guide are conceptual and for illustrative purposes only. Project teams should always consult with a licensed professional to evaluate and design systems appropriate to their specific applications.
Pairing Considerations and Design Synergies
Heat pump water heater systems with thermal storage can provide strong electrification and decarbonization benefits on their own. However, they may offer additional value when coordinated with other building systems or technologies. Project teams should evaluate complementary strategies early in design to improve system integration.
- Low-GWP Refrigerants
Select refrigerants with lower global warming potential where available to reduce refrigerant-related climate impacts. - All-Electric Commercial Kitchen Design
Coordinate water heating with electric kitchen equipment to support broader building electrification goals and reduce gas infrastructure. - Refrigeration Heat Reclaim
Consider reclaiming waste heat from refrigeration systems topreheat DHW. This strategy is most beneficial in facilities with significant refrigeration loads and a qualifying commercial kitchen hot water system. - Drain or Wastewater Heat Recovery
Evaluate wastewater heat recovery where project conditions support preheating incoming domestic water. - Building Energy Management and Controls
Integrate HPWH controls with the building automation system to optimize storage charging, temperature maintenance, and load shifting.
Not every complementary strategy will qualify for a separate inducement. Projects should avoid double-counting equipment, costs, or performance benefits across multiple measures.
Cost Considerations
HPWH systems with thermal storage may have higher upfront costs than conventional gas-fired water heating systems but can also reduce energy use. Project teams should evaluate both first cost and ongoing operating costs when comparing system options.
Higher upfront costs often result from thermal storage requirements and supporting electrical infrastructure. Projects with limited electrical capacity or space constraints may require additional infrastructure upgrades, increasing upfront costs.
Operating costs depend on system design, operating conditions, and local utility rates. Well-sized systems with effective controls are more likely to achieve strong performance and reduce unnecessary energy use. In some applications, thermal storage can support load shifting by allowing heat pumps to operate during lower-cost or periods of lower grid carbon intensity.
Cost-effectiveness depends on project-specific conditions and available incentives. Evaluating the water-heating system early in design can help improve performance while managing implementation costs.
What Are the Benefits?
- Improves water-heating efficiency by transferring heat rather than generating it through combustion.
- Maintains reliable hot water service during periods of high demand through thermal storage.
- Supports electrification of commercial kitchen water-heating systems, reducing or eliminating on-site fossil fuel use and associated combustion-related infrastructure.
- Can support lower-cost or lower-carbon operation through load shifting by allowing heat pumps to operate during non-peak periods.
What Are the Challenges/Constraints?
- Indoor installations may require adequate airflow or ducting, condensate drainage, and noise control.
- Additional space may be needed for larger or multiple shared primary thermal storage tanks and maintenance access.
- Controls integration and commissioning are critical to limit unnecessary supplemental heating and maintain reliable operation.
- Certain kitchen equipment may require point-of-use booster heating to meet higher delivery-temperature requirements.
What Are the Qualifications for CEDA Inducements?
To be eligible for inducements under the Heat Pump Water Heater with Storage for Commercial Food-Service Kitchens High-Performance Measure, a project must:
- Be located within the service territory of SCE, SoCal Gas, PG&E or SDG&E.
- Be enrolled in the CEDA program and meet all standard program participation requirements.
- Implement a qualifying central HPWH system with shared primary DHW storage that delivers at least 120°F and meets the commercial kitchen’s full DHW demand throughout all operating hours, including peak periods.
- Provide at least 200 gallons of shared primary DHW storage serving the kitchen load. Secondary storage components, such as swing tanks, recirculation tanks, temperature maintenance tanks, and buffer tanks, do not count toward this requirement.
- Select an eligible system configuration, either a hybrid central HPWH system with instantaneous gas supplemental heating or a fully electric central HPWH system with electric supplemental heating where needed.
- Provide design and equipment documentation consistent with the permitted project documents, including equipment schedules, system diagrams, product data, and sequences of operation.
- Participate in equipment data collection if selected to support CEDA and Code Readiness objectives.
Notes:
- Projects may be selected by PG&E or the CEDA team for future case study or market learning opportunities.
- Measure requirements are subject to change; this guide reflects information available as of August 2026—for the most current measure requirements, contact CEDA@willdan.com.
Resources:
- California Energy Commission (CEC). (n.d.). Building Energy Efficiency Standards. https://www.energy.ca.gov/programs-and-topics/programs/building-energy-efficiency-standards
- CalNEXT. (2023). Commercial Kitchen Hot Water System Design Guide (ET22WE0048). https://calnext.com/wp-content/uploads/2023/12/ET22WE0048_Commercial-Kitchen-Hot-Water-System-Design-Guide_Final-Report.pdf
- CalNEXT. (2024). Technical Design Guide. https://calnext.com/wp-content/uploads/2024/10/Technical-Design-Guide.pdf
- CED Engineering. (n.d.). Improving Commercial Kitchen Hot Water System Performance (M03-025). https://www.cedengineering.com/userfiles/M03-025%20-%20Improving%20Commercial%20Kitchen%20HWS%20Performance%20-%20US.pdf
- Ecotope. (n.d.). Ecosizer Commercial Heat Pump Water Heater Sizing Tool. https://ecosizer.ecotope.com/sizer/
- Northwest Energy Efficiency Alliance (NEEA). (2024). Advanced Water Heating Specification. https://neea.org/resource/advanced-water-heating-specification/
- U.S. Department of Energy, Better Buildings Solution Center. (n.d.). Commercial Building Hot Water Strategies: A Short Guide. https://betterbuildingssolutioncenter.energy.gov/sites/default/files/attachments/Hot%20Water%20Strategies%20Guide.pdf
- U.S. Department of Energy, Better Buildings Solution Center. (n.d.). Heat Pump Water Heater Guide for Small Businesses. https://betterbuildingssolutioncenter.energy.gov/sites/default/files/attachments/HPWH%20Guide.pdf
