An air-to-air heat pump (COP = 3.11 at 47°F [8.3°C]) run alternately with an electric-resistance water heater and a desuperheater water heater was tested under field conditions at a site near Knoxville, TN. Results from these tests indicate that the desuperheater system has an annual performance factor (measured over a six-month period consisting of three winter and three summer months) 14 percent better than that of the system using electric resistance water heating. An analytical model predicts a 21 percent improvement over an entire year with average weather for the desuperheater system. The simple payback period ranges from seven years (for a 21 percent improvement) to about nine years (for a 14 percent improvement).