Air Sourced Heat pump Hot Water Heaters (ASHPWH) are integrated in buildings as a multitask system to act as both a water heater and air cooler with a lower carbon footprint. The cost effectiveness of the ASHPWH systems relative to the conventional water-heaters is a challenging issue which is researched in this project. A refined heat pump was integrated into a water heater tank and tested using the Australian testing standard AS/NZS 5125. Experiments included measurement of flow rate, temperature and pressure of water, air and refrigerant (R410a) to determine Coefficient of Performance (COP) and cost-effectiveness of the ASHPWH relative to the current 310L-ASHPWH and a standard electric water heater of similar size. The leaving water location of the condenser was also studied to reduce scalding / to destroy Legionella bacteria, to improve mixing and the delivery of hot water to the storage-tank, to enhance heat transfer stratification, buoyancy, or pumping. The relative position of the water from the storage-tank was varied and coefficient of performance (COP) of the Heat-pump and effectiveness of the water heater were determined. Experiments included measuring water, air and refrigerants flow-rates and temperatures and power consumed in compressor. This research in progress will recommend on the conditions this method is reasonable. The operational cost of 310L was 38% cheaper than the standard electric. The design (claimed) heat pump would operate 52% cheaper than the electric water heater. Carbon tax was not included but it is estimated that carbon footprint of the tested heat pump and the Standard 310L - ASHPWH were lower due to lower consumption of 40% and 33% electricity respectively relative to the electric water heater.

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