Unlike traditional electric or gas water heaters that generate heat directly, a heat pump water heaters system uses a heat pump to extract thermal energy from the surrounding air or environment and transfer it into the water inside the tank, making it significantly more energy-efficient than conventional water heaters.The tank itself is typically well-insulated and may include heat exchanger coils or integrated connections that allow the heat pump to deliver heat into the stored water. It serves as both the thermal storage unit and the delivery source for hot water to faucets, showers, heating loops, or other systems.