Heat pump water heater (HPWH)
A heat pump water heater uses a refrigeration circuit to move heat from surrounding air into the tank, delivering 3–4 units of heat per unit of electricity — the most efficient water heater type sold, with UEF ratings of 3.0–4.5.
Most residential HPWHs are "hybrid" units: a heat pump does the everyday work, with electric resistance elements as backup for heavy demand. They cool and dehumidify the space they sit in as a side effect, which is a bonus in a warm garage and a consideration in conditioned space.
Installation needs: enough surrounding air volume (typically ~450–700 cubic feet unless ducted), a condensate drain, and tolerance for compressor noise similar to a refrigerator. 120 V plug-in models remove the wiring barrier for gas-replacement retrofits.