Domestic hot water heat pumps (DHW HPs) have spread fast in recent years in Europe and they now represent an interesting opportunity for implementing renewable energy sources in buildings with a centralized/district heating system, where DWH is generally produced by a gas boiler or an electric water heater. Replacing these appliances has several environmental benefits, including the removal of air pollution sources and the reduction of Green House Gasses (GHG) emissions. In this work, we present the techno-economic and environmental evaluation of implementing DHW HPs in Turin, where 66% of the DHW demand is covered by dedicated gas boilers. The impact of such boilers was assessed through numerical air dispersion modeling conducted with the software SPRAY (Aria Technologies, Paris, French). Results show that removing these sources would reduce yearly average concentrations of NOx up to 1.4 µg/m3, i.e., about 1% of monitored concentrations of NOx, with a benefit of 1.05 ÷ 15.15 M€/y of avoided health externalities. Replacing boilers with DHW HPs is always financially feasible with current incentives while, in their absence, it would be convenient for residential units with 3 cohabitants or more (51.22% of the total population), thanks to scale economies.