My 20 year old propane water heater gave out last summer and I went shopping for water heaters. The propane models were predicting 513$/ year energy costs while conventional electrics were I think 508$/yr. Then i spied the heat pump type. estimated energy cost 295$/yr. The purchase price was around 400$ more but that's a 2 yr payback. When we got it home my wife looked and found that our electric company was giving a 350$ rebate!
It works fine and seems to keep up with my 4 person household. Since it takes heat out of the room air and it is located in the same room as the furnace/air conditioner I cut a hole in the return ducting so the a/c when running would suck cool air out of the utility room and distribute it throughout the house. I only run it on heat pump mode during the summer cooling months, in the winter I run on conventional electric resistance mode. My theory is that the heat i take out of the air to heat my water needs to be replaced by heat from my propane furnace.