Optimize heat pump water heater (HPWH) next generation project for both EE and DR. The major objectives of the project are: 1. Demonstrate and quantify the energy performance of the prototype GE Brillion GeoSpring Hybrid Water Heater with and without exhaust air ducting over heating and cooling conditions in the lab homes 2. Evaluate or quantify the potential for the GE smart grid-enabled HPWH to provide demand response (to both increase/absorb [INC] and decrease/shed/shift [DEC] load) under various price signals sent to the unit. In addition, the proposed project will provide GE information to determine and design the optimal ducting configurations for their unit should they decide to offer this feature as an option for this new-to-the-market unit.