The Kingdoms' electricity consumption has been steadily increasing during the past 10 years, with the residential sector consuming nearly 45% of it. Therefore, the residential sector offers a real opportunity for energy savings, as one of the reasons for this high-energy consumption is the utilization of low efficiency electric home appliances, e.g., electric water heaters (EWH). This behavior is encouraged due to the low initial investment for inefficient appliances, compared to the more efficient ones. Electric Heat Pump Water Heater (EHPWH) can substantially reduce water-heating-related energy use in the Saudi residential sector. This paper investigates the potential savings in primary energy, and its corresponding carbon dioxide (CO2) reduction, achieved by switching from conventional low efficiency electric resistance water heaters to EHPWH. The potential energy savings is nearly 0.19 Quadrillion Btu (0.20 Exajoules), and a corresponding 28,660 million pounds (13 million metric tons) of CO2 emissions reduction. This study paves the road for policy makers to take a deep dive investigation of this proposal.