Participants established their eligibility to compete by demonstrating technical capability, manufacturing capacity, and market reach.
Outcome: Approved manufacturers advanced to Phase B to develop full project plans.
Accelerating the Future of Water Heating
The Hot Water Innovation Prize is a national competition led by the Northwest Energy Efficiency Alliance (NEEA) designed to speed the development of affordable and easy-to-install split system heat pump water heaters for space-constrained installations.
The Prize focuses on real-world feasibility and market readiness, rewarding manufacturers for the development of turnkey systems with an indoor tank and an outdoor compressor. This makes high-efficiency water heating possible where today’s heat pump water heaters don’t fit. By recognizing innovation, affordability, and real-world feasibility, the Prize is helping move the industry toward a cleaner and more efficient future.
Our Co-Sponsors
Why it Matters
Water heating is one of the largest energy uses in U.S. homes, but affordable and energy-efficient options are unavailable for compact spaces today. Small-capacity split system heat pump water heaters would solve this problem and extend efficiency benefits to people living in homes and apartments where more modest electric resistance water heaters are commonly found.
Focused on Efficiency
The Prize focuses on smaller (e.g., 35-gallon) split systems because they extend efficiency benefits to smaller or space-constrained homes, including apartments in multifamily buildings. NEEA estimates these systems can reduce water-heating electricity use by up to 60%, saving individual households hundreds of dollars annually while significantly lowering emissions. Split system heat pump water heaters represent a major market opportunity, with 1 to 2.4 million units in potential annual sales.
Utilities and Program Co-sponsors
Preparing for the Next Generation of Water Heating
Utilities and energy-efficiency organizations have a unique opportunity to help move this technology from lab to field.
We invite utilities and other program-focused organizations to join the national effort to promote winning designs from the Hot Water Innovation Prize. We invite you to join our Co-sponsors, Bonneville Power Administration, New Buildings Institute, Vermont Energy Investment Corporation, and Efficiency Vermont, in leading demonstrations of winning products. Co-sponsors are also invited to launch early utility incentive pilots beginning in 2027. These efforts will provide valuable data on performance, installation, and customer satisfaction, laying the groundwork for broader adoption.
Interested utilities and program sponsors can contact us to explore collaboration opportunities.
Demonstration Project Co-sponsors
Media Co-sponsors
Help Amplify the Future of Water Heating
We’re inviting industry associations, trade groups, nonprofits, and media outlets to join as Media Co-sponsors. These communications partners play an important role by sharing updates, stories, and results through their communication channels, like newsletters, events, or social media.
Why participate:
- Become aligned with an innovative and nationally recognized energy efficiency initiative.
- Gain recognition in Prize materials and media stories as a supporting partner.
- Receive turnkey materials, including social posts, visuals, and copy, for easy sharing.
- Stay connected to technologies and policies shaping the next generation of efficient water heating.
If you’re interested in becoming a Media Co-sponsor and communications partner, get in touch!
Media Co-sponsors
The Hot Water Innovation Prize
How the Contest Works
The Hot Water Innovation Prize is structured around three stages that guide promising ideas from concept to market-ready products.
Contest Details
Participating manufacturers are now in the design and testing phase; soon the winner(s) of the Prize will be announced.
Then the Prize will evolve to support demonstration projects, pilot incentive programs, and industry education to encourage the sale and installation of the Prize-winning products. These efforts will help utilities, contractors, and consumers access more efficient options and accelerate market transformation to efficient electric water heating nationwide.
Three Contest Phases
Phase A
2024
Participant Qualification
Phase B
2025
Project Plan Submission
Qualified manufacturers submitted 10-page project plans outlining their product designs, production strategies, and launch roadmaps.
Outcome: Up to five manufacturers each received $30,000 in co-funding and advanced to prototype development.
Phase C
2026
Prototype Submission
Selected manufacturers are building and testing working prototypes of split system heat pump water heaters to demonstrate performance and affordability.
Outcome: Up to two Winners will be selected in 2026 to receive $175,000 in co-funding, national media promotion, and participation in demonstration projects.
Resources
- Hot Water Innovation Prize Flyer
- Guidebook and Rules
- FAQs
- Phase A Launch Webinar Recording (10/2/24)
- Supplemental Guidance on Cost-Effectiveness Guidebook & Rules
- Seasonal Coefficient of Performance (SCOP) Calculator
- Manufacturers Webinar
- Manufacturers Webinar Presentation Slides
- U.S. Department of Energy Final Rule
About NEEA & Hot Water Solutions
The Northwest Energy Efficiency Alliance (NEEA) is an alliance of utilities and partners that pools resources and shares risks to transform the market for energy efficiency to the benefit of all consumers in the Northwest.
Hot Water Solutions is a NEEA initiative working to accelerate the adoption of heat pump water heaters in the Northwest by providing resources, tools and support to increase sales and installations of heat pump water heaters.