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Matt and Eric break down the essentials of heat pump water heaters. They explain how these units work by transferring ambient heat into the water tank—making them about four times more efficient than traditional electric heaters. The conversation covers advancements over the past 15 years, installation considerations (like minimum space and ducting), pros and cons of various models, and the importance of regular maintenance such as flushing and replacing the anode rod. They also highlight sound levels, power requirements (110V vs 240V), and features like powered anode rods and smart alerts. Matt and Eric stress the importance of proper sizing and compatibility with solar systems for all-electric homes.