Can a small ADU use an electric point-of-use water heater instead of a heat pump?

Yes, if the ADU is 500 square feet or less. The 2025 Energy Code lets new dwelling units of 500 square feet or less, and additions of 500 square feet or less, use an electric water heater with point-of-use distribution instead of a heat pump water heater. The piping between the heater and the fixtures has to meet the limits in Reference Appendix RA4.4.5.

The prescriptive baseline

For a new detached ADU, Section 150.1(c)8 calls for a single 240V heat pump water heater (or a solar system with electric backup). In climate zones 1 and 16 it adds a compact hot water distribution system, and in climate zone 16 a drain water heat recovery system as well. For an ADU addition, Section 150.2(a)1D calls for a single heat pump water heater meeting set conditions. The 2025 code dropped gas and electric instantaneous (tankless) water heaters as prescriptive options for additions.

The small-unit exceptions

• 500 square feet or less, new construction: Exception 1 to Section 150.1(c)8 allows an electric water heater with point-of-use distribution per RA4.4.5.
• 500 square feet or less, addition: Section 150.2(a)1Diii allows the same option.
• One bedroom or fewer, new construction: Exception 2 allows a 120V heat pump water heater in place of a 240V unit. That can ease panel and circuit demands in a studio or one-bedroom ADU.

The 2025 wording dropped the word "instantaneous" from this option, so it is no longer limited to tankless units, as long as the distribution rules are met.

What "point-of-use distribution" means

RA4.4.5 limits the pipe size, length and routing between the water heater and the fixtures it serves. The CEC's 2025 ADU FAQ confirms that one heater can serve more than one fixture if those limits are met. Whether a given run, such as 10 feet, qualifies depends on pipe diameter. Mixing pipe sizes cuts the allowed length. In practice, the heater has to sit close to the kitchen and bathroom fixtures.

One heater or several?

• Prescriptive: the CEC says multiple electric water heaters are not allowed prescriptively. One point-of-use unit is allowed.
• Performance: multiple heaters can be modeled, and they are compared against the prescriptive standard design. Expect to make up the difference elsewhere.

Is it the right choice?

Point-of-use electric heating saves floor space and avoids the air volume and condensate drain a heat pump water heater needs. It uses more electricity per gallon, though, and it adds load on the panel. For a compact studio with tightly grouped fixtures it can work well. In a layout where the kitchen and bath are far apart, a heat pump water heater is usually simpler.

What this means for your MEP plans and Title 24 report

The plumbing plan must show the heater location and the pipe sizes and lengths to each fixture so plan check can confirm RA4.4.5. The electrical plan carries the circuit, and the CF1R lists the exception used. See how Title 24 affects water heaters, plumbing plans, and the ADU Title 24 guide.

Sources: energy.ca.gov, energy.ca.gov, energy.ca.gov.