A Split-System Heat Pump Water Heater Just Won a National Design Prize, and Apartments Are the Reason

Heat pump water heaters save a lot of energy. They also tend to be tall, and that single fact has kept them out of most apartment mechanical closets. A national design competition set out to fix that, and on August 4 the Northwest Energy Efficiency Alliance (NEEA), working with the American Council for an Energy-Efficient Economy, named Midea the first-place winner of its Hot Water Innovation Prize.

Midea’s winning concept is a split system. The compressor is separated from the storage tank, which lets the tank itself shrink to a height that fits closets where today’s integrated heat pump units simply will not go. That is the difference between a product that works in a single-family garage and one that works in a garden-style apartment, a condo, or a manufactured home.

The award comes with $175,000 in prize funding to carry the design toward commercialization. NEEA’s estimates for the category are striking: an approach like this could reach more than 2 million homes a year, save households roughly $240 annually, and at wide adoption add up to about $5.6 billion in yearly utility savings and 35 billion kWh of avoided electricity use. NEEA Executive Director Becca Yates said the innovation gives families more energy-saving options.

Why it matters to JFN

In-unit water heating is one of the most repeated details on any multifamily or student housing job, and closet fit is the practical barrier that decides whether an owner can electrify domestic hot water without redrawing unit plans. A compact split tank changes closet sizing, condensate routing, and the refrigerant line rough-in that has to be coordinated with framing. We track products like this early so that when a developer or general contractor asks about an electrification path, we can talk about what it means for the rough-in schedule and the budget rather than starting from zero.

Source: Contractor Magazine, August 4, 2026