A study of a dual source, air and domestic water, heat pump for residential use has been conducted for the Western Pacific Northwest region of the contiguous United States. The dual source heat pump incorporates a single evaporator that has passageways for air, refrigerant and water. The evaporator operates as either an air-to-refrigerant heat exchanger or a water-to-refrigerant heat exchanger depending on the prevailing ambient air temperature. Results show that such a heat pump unit has the potential to (i) reduce the required heat pump unit size required for a residence, (ii) save energy relative to the pure air source unit, and (iii) reduce peaking loads imposed on the electrical utility. Furthermore, it is projected that these results can be achieved with a unit that is quite comparable in first cost with similarly sized air source units, and that the dual source unit will result in a more reliable unit.