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Tropical and subtropical hotels must manage simultaneous demand for space cooling and water heating for most operating hours each year. However, for most hotels in the regions, space cooling and water heating are from two independent sources, e.g., electrical chillers and fossil fuel-fired and/or electric boilers. Retrofitting existing hot water supply using heat pump technology can significantly increase energy efficiency because chilled water can be a free by-product of the process producing hot water, or vice versa.