Canada plays a leading role in the initiative to divert energy sources from greenhouse gas (GHG) emissive power sources to renewable and sustainable energy sources. Through the Clean Energy Act, Canada is subjected to introduce a reduction in electricity demand by 66%, and GHG emission reduction by 80%, from the levels achieved in 2007, by 2020. This thesis investigated the use of heat pump water heater technology to assist in the reduction of GHG emissions and energy in domestic water heating for the residential sector. Heat pump water heaters (HPWHs) have had great success in the warm, humid climates of the US, Europe and Asia. However, due to the longer heating season in Canada, a conventional HPWH installed in a residential basement can increase the space heating demand in the winter. Models have been used to study heat pumps and thermal storage as separate components. However, few modelling studies have been conducted on HPWHs with condensers as wrap-around coils on the outside wall of the water storage tank. This study involved the development of a new HPWH model in the TRNSYS simulation software, based on Types 938 (heat pump water heater) and 534 (water storage tank), to investigate the effect of a HPWH unit on the space heating and cooling requirements of a house. The model was verified by experiment using a commercially available HPWH unit in a laboratory setting. The experimental set-up consisted of an air-source heat pump connected to a controlled air supply that provided constant temperature, flow rate, relative humidity to the unit, as well as a draw system for hourly water draws. A performance map was experimentally obtained through monitoring the air temperature, relative humidity, and water temperature as the independent variables, while the total and sensible cooling capacity, compressor power and heat delivery were the dependent variables. The result of the study showed that humidity has a negative effect on the performance of the unit at low temperatures. I would like to thank my supervisor, Dr. Cynthia Cruickshank, for the support, guidance, and patience she has provided for the last 2 years. I would like to thank my colleagues within the Solar Energy Systems Laboratory who have provided friendship, guidance, and mentorship over the duration of my thesis. These people include, but are not limited to,