Abstract: Heat pump apparatus for heating liquid, such as water, includes a refrigerant circuit and a water circuit, a refrigerant-to-water heat exchanger and an air-to-refrigerant heat exchanger operably disposed in heat exchange relationship with a air fluid stream of a systemically separate primary source of space conditioning. A compressor is provided for circulating the refrigerant between the two heat exchangers and a water pump is provided for circulating the water to be heated through the refrigerant-to-water heat exchanger. A tank is also provided for storing the heated water. The tank has an electrically resistive heating element operably associated therewith. A control circuit is provided for normally enabling operation of the heat pump and disabling the heating element in response to a demand for liquid heating.