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I contacted a water heater company saying gas conversionsto hybrid electric storage is "illegal" in California. He said he received 15 calls about this.

I did some research. https://www.energy.ca.gov/2015publi...ters/chapter_5-Water_Heating_Requirements.pdf

5.2.2.3 Storage Heat Pump Water Heater A storage heat pump water heater is an electric water heater that uses a compressor to transfer thermal energy from one temperature level to a higher temperature level for heating water. It includes all necessary auxiliary equipment such as fans, storage tanks, pumps, or controls. DOE classifies heat pump water heater under the category of electric storage water heater, and it must meet the federal minimum efficiency standards, depending on tank size. Heat pump water heaters are not allowed through the prescriptive approach to compliance but can be installed using the performance approach as long as the water heating energy budget is not exceeded. (See Section 5.5 for more information on the energy budget and performance path to compliance.)

The only way is to comply through the "performance approach":

5.5.1 Energy Budget Calculation The computer performance approach allows for the modeling of water heating system performance by taking into account building floor area, climate, system type, efficiency, and fuel type. The standard design water heating budget is defined by the corresponding prescriptive requirements. The performance method allows for modeling alternative water heater and distribution system combinations. Some of these options will offer compliance credits, and others will result in penalties. 5.5.2 Systems Serving Single Dwelling Unit In the case of single dwelling units, any type or number of water heaters can theoretically be installed. The calculated energy use of the proposed design is compared to the standard design energy budget based on a single natural gas instantaneous water heater with a standard distribution system. Adding multiple water heaters to a single-family design will generally result in an energy penalty in the water heating budget that must be offset elsewhere in the total energy budget.

Though a heat pump hybrid water heater could perform more efficiently than a traditional gas storage water heater. I don't think anything electric, heat pump or not, can outperform a natural gas instantaneous water heater.

Case closed for me.

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