> I can also see them being useful in parts of the American South where big garages being common and the weather gets hot: Take some of the heat from the garage and convert it into hot water for showering and cleaning. Win-win.

Uhhh, better to put the unit inside the home where it provides a bit of a/c. Double win if you cool the compressor with incoming water.

Not in the south myself, but with trad water heaters, I find it dumb that I’m heating incoming 5-10C municipal water in summer time when I could have a tempering tank/loop letting the interior air warm it up (and getting a tad of “free” AC) to 20-25C first before paying to apply heat to it. Would improve “capacity” of the heater too.

Even in winter time, my home heating is more efficient than most water heaters (even if they’re both gas, water heaters are typically non-condensing, and actively pump out warmed interior air for combustion), so it makes sense all year round.

Sure. It's better to start with an excellent home design that most-effectively uses every iota of modern tech to optimize efficiency. And sure, even more efficiency can be eeked out if one is willing to layer on their own productive infrastructure hacks.

But not everybody has those opportunities. Not every home has an existing conditioned space within which to put a water heater. Not every person is equipped (mentally or physically) to engineer and use tempering loops and/or water-cooling compressor motors.

As a practical matter: In a warm-climate home that already has a water heater in the garage (which is very common in the American south, from my limited direct observation), replacing a traditional water heater with one that uses a heat pump can make a lot of sense.

This replacement is something that any person and a friend with minimal plumbing and electrical experience can accomplish on their own in one afternoon, without incurring the expense and inconvenience of relocating their water heater somewhere else. There will be no drywall dust, and no paint.

It's a natural fit.

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And don't take any of this the wrong way. You've got some great ideas there.

But not all environments are the same. During the warmer months in my own city, I've measured incoming water at 76F/24C -- warmer than the house, and also warmer than the basement where the plumbing lives. A tempering loop may make sense for you in your environment, but it would be the opposite of useful in my environment: "Oh neat! A thing that makes my home harder to cool in the summer!" (Unusual? Perhaps. But it's my reality anyway. I've never run out of hot water in this city during the summer. Not even close. But things do change in the winter -- maybe I'll measure the input temperature again when I get home tonight.)

It's fun to think about niche concepts that don't have broad-scale adoption. And sometimes, it makes sense to set forth and make them a reality.

But it's always important to remember that there's often very real reasons for them to remain niche concepts that aren't broadly utilized.