These tend to work fine down to -25° C or so ambient temperature (you lose some efficiency below -5° C or so), so should always be outside. Obviously you need an alternate source of water heating if you live somewhere where it routinely gets below that, but even in a lot of places like that you could set it up to use the heat pump 90-95% of the year and a cheap but far less efficient resistive heater for the very cold days, and still come out far ahead.
Technically your refrigerator heats up your kitchen in the same fashion adding extra work for your AC to compensate.
Unless you live in the artic where it's freezing year round, these things make sense. During the summer they reduce your cooling load and during the winter they are effectively heated by whatever your home heater is. Meaning if it's gas, then they are gas powered. If you have a heat pump outside then it's still pretty efficient. Even in the worst case of a resistive heater you are basically just running a slow resistive heater.
Most homes in Japan for decades have been designed for Tankless Gas Water Heaters stuck on the side of the building so there is no room indoors for a water tank.
The condenser unit for this literally just looks like the same one as for a regular mini split air conditioner, just a little bit larger.
One of the main reasons I went heat pump electric in my house (I could have paid less and stayed with tankless LP gas hot water) is I'm just not that comfortable with gas, especially living in an earthquake-prone country. Even if there aren't leaks it's terrible for indoors air quality, and a worry when you have young kids.
I was worried going from living with tankless to a tank that we would run out of water like we did in my parents house as a kid but so far it's just never been a problem. I think it helps that while the physical water capacity of our unit is 370 liters, the internal temperature is 80 C and it uses a thermostatic valve to blend the output, so the "hot water capacity" is more like 500 liters.
heat pumps just run something similar to a reverse Carnot cycle on their refrigerants and use a condenser coil to release the extra heat to the water. So for all practical purposes it heats the water inside the tank in a pretty similar fashion to how a normal electric water heater works, it just delivers it from a slightly different source and it isn't electric resistive.
So no, not possible. Theoretically you might be able to do it with a stupid enough system of coils and a very ridiculous amount of power, but it wouldn't be efficient or practical.
I'm still not sure why not possible. A tankless waterheater is just a regular water header with a tiny tank (pipes count as a tank...). I know electric tankless water heaters exists - they draw massive amounts of power (I considered one for my house, but it needs 4x 40 amp, 240 volt circuits - like most houses in the US I'm limited to 200 amps total and I suspect at times I'm using more than the remaining amount (not for long, but long enough to blow the main breaker)
Technology Connections has recently published an in-depth piece of the advantages and disadvantages of in-room heat-pump water heaters [1].
The tl;dw is that it is significantly slower than a resistive or gas-powered water heater, and lowers the temperature of the room by a few degrees, but nothing major. You have to over-provision them compared to your needs. And they are way bigger.
> significantly slower than a resistive or gas-powered water heater
This was TC being a weirdo. He bought a 120V hot water heater. Had he done a regular 240V water heater the recovery time would be comparable to pure resistive water heaters.
But the takeaway about cooling is important. These things barely chill the room they are in.
which is why the bit thats sourcing the heat/cold is outside your house. it either has a massive radioator and fan, or pipes undergorund to source/sink the heat
Which means in winter that is extra work for your heating system to compensate for
But in climates where heating only really runs in winter it's great