The performance of a new type of Air Source Heat Pump Water Heater (ASHPWH) has been investigated. ASHPWH has a better performance than the conventional electric water heater if it is installed in a hotter climate. However, the conditions are different in Canada, where outside air temperature is well below the freezing point for several months, and that diminishes the water heating capacity of these systems significantly. On the other hand, if it is installed in the indoor space (which is the case of this research), the presence of the system in the house affects the house heating and cooling loads. Therefore, an understanding of energy performance of this types water heaters is critical to justify their use in the Canadian houses. The research methodology involved, installation of the ASHPWH unit in an Archetype Sustainable House (ASH), reconfiguration of some parts of house plumbing system, build sensors and data acquisition system to collect real-time experimental data, developed and validated TRNSYS models. Furthermore, the validated models were applied to evaluate the performance of the unit to meet the year-round hot water demand and established its significance with respect to the conventional electric water heater. It was concluded that the temperature and humidity of surrounding air produced a considerable impact on the heating capacity of the ASHPWH. The best coefficient of performance (COP) was obtained at 20 degrees C and 35% RH from the chosen sets of air conditions. The outlet water temperature fluctuates in the range of 49.5 degrees C to 55.9 degrees C (while the setpoint temperature was taken at 54 degrees C). The system will increase the combined space heating and cooling electricity consumptions annually by 3%, on the other hand, a reduction of 55% of water heater related annual electricity consumption was noted relative to the conventional electric water heater. (C) 2018 Elsevier B.V. All rights reserved.