AirGenerate AirTap A7

The AirTap A7 electric heat pump plugs into an ordinary outlet and sits on top of any tank-style water heater (either gas or electric). Extremely efficient, it heats water to store in the tank mostly by drawing heat from the ambient air; it can even work in freezing temperatures. The tank-style water heater then only needs to boost the water heating rate during periods of exceptionally high load. This water heater is so efficient (with an energy factor rating of 2.2) that it's eligible for a $300 federal income tax credit through at least 2010.

We found the best review of the AirTap at Dulley.com, where it's compared with eight other heat-pump water heaters. The AirTap is also the only electric water heater included in the Gas Appliance Manufacturers Association's list of water heaters eligible for the federal income tax credit of 30 percent of the installed price. FineHomebuilding.com has a brief review with a video, and we found another article describing how a builder is getting five-star Energy Star certification for his homes by installing an AirTap on the tank-style electric water heaters.