Yes, heat pump water heaters can work in cold climates. In fact, they can be a great option for homes in colder climates as they are more efficient than traditional electric water heaters. Heat pump water heaters use the same technology as your refrigerator to transfer heat from the air around it into the water inside it. This means that they are not as affected by the ambient temperature as traditional electric water heaters, making them a more efficient option for homes in colder climates.