diff --git a/domain/sap10_calculator/rdsap/cert_to_inputs.py b/domain/sap10_calculator/rdsap/cert_to_inputs.py
index 1cdfd98e..13bf41ee 100644
--- a/domain/sap10_calculator/rdsap/cert_to_inputs.py
+++ b/domain/sap10_calculator/rdsap/cert_to_inputs.py
@@ -6234,6 +6234,10 @@ _SAP_DESIGN_HEAT_LOSS_DELTA_T_K: Final[float] = 24.2
 _HP_SPACE_HEATING_IN_USE_FACTOR_N3_6: Final[float] = 0.95
 _HP_IN_USE_FACTOR_CRITERIA_MET: Final[float] = 0.95
 _HP_IN_USE_FACTOR_CRITERIA_FAIL: Final[float] = 0.60
+# SAP 10.2 Appendix N3.7 (PDF p.109): the heat-pump water-heating efficiency
+# (in-use factor × η_water) is "subject to a minimum efficiency of 100%" —
+# below that the direct-electric backup governs.
+_HP_WATER_HEATING_MIN_EFFICIENCY: Final[float] = 1.0
 
 
 def _heat_pump_cylinder_meets_pcdb_criteria(
@@ -6325,7 +6329,12 @@ def _heat_pump_apm_efficiencies(
     main_heating_efficiency = (
         _HP_SPACE_HEATING_IN_USE_FACTOR_N3_6 * eta_space_1_pct / 100.0
     )
-    water_efficiency_pct = in_use_water * eta_water_3_pct / 100.0
+    # N3.7: in-use factor × η_water, subject to a minimum efficiency of 100%
+    # (the direct-electric backup floors the heat pump's water heating).
+    water_efficiency_pct = max(
+        in_use_water * eta_water_3_pct / 100.0,
+        _HP_WATER_HEATING_MIN_EFFICIENCY,
+    )
     return (main_heating_efficiency, water_efficiency_pct)