This study presents a novel vapor compression heat pump cycle in which an ejector associated with a subcooler is applied to enhance the heating performance for air-source heat pump water heater application. The heating coefficient of performance (COPh) and heating capacity of the novel cycle using the non-azeotropic mixture refrigerant R417A are theoretically investigated, for the ranges of evaporating temperature (-15 to 10 degrees C) and condensing temperature (55-60 degrees C). The theoretical results show that the COPh and volumetric heating capacity of the novel cycle are better than that of the conventional heat pump cycle. It is found that for the operating conditions considered, the maximum COPh and volumetric heating capacity can be improved by up to 1.62-6.92% and 15.20-37.32% over the conventional heat pump cycle, respectively. The performance characteristics of the novel cycle show its promise in air-source heat pump water heater applications. (C) 2011 Elsevier B.V. All rights reserved.