The heat reclaimer is a heat exchange device that removes superheat from the refrigerant gas in a heat pump or central air conditioning unit and uses that extracted energy to heat water for domestic uses. This analysis examines the energy-saving potential and economic benefit of the heat reclaimer.Energy savings were calculated using a modified bin analytical technique. Economic viability was determined using the simple payback criterion. The analysis was performed for 28 cities in the United States to gain an understanding of the relationship between energy savings, economic viability, and climate.The results of the assessment indicate that the heat reclaimer has payback periods greater than seven years when compared with oil-or gas-fired water heating systems. Because of the long payback periods, the heat reclaimer does not appear to be economically feasible for these applications. However, when compared to electric-resistance water heating units, the heat reclaimer is economically viable, especially in areas where the air conditioning load is substantial or where the price of electricity is high.