An air source heat pump (ASHP) water heater is a renewable and energy efficient hot water heating technology. ASHP water heaters are fast gaining maturity in the South African market and in Africa at large due to their low energy consumption (about 67 percent lower than conventional geysers), relatively low installation and operation cost, their environmental friendly nature and possibly the ease to retrofit with the old inefficient technologies. Furthermore, ASHP water heaters make use of some of the most recent advancement in refrigeration technologies enhancing their performance through a wide range of weather conditions. However, residential ASHP water heaters which come at the tail of a series of highly sophisticated models still harbour primitive control designs. One of such control system is the intermittent (on/off) control whereby the ASHP unit responds to a temperature differential threshold rather than instantaneous temperature fluctuations. Unfortunately, this control method contributes to a rapid deterioration of the compressor and other actuators due to high starting current during transient states and partial loading. Capacity control is a better alterative as it offers a more reliable system’s performance as well as a better protection for the system components. However, the drawbacks of implementing such a technology on residential ASHP water heaters is the initial purchasing cost. We use a systematic approach in this research to circumvent the purchasing cost and complete redesign hysteresis. The first step was centered around a hypothetical analysis of the performance of the heat exchangers in a bid to uncover the weakness during the operation of a residential ASHP water heater. It was observed that at ambient temperatures above 22°C notably during summer and winter afternoons, water only harnesses about 75 percent of the total heat rejected. Furthermore, the actuators keep doing work for about 15-20 minutes even after the heat transfer process has ceased completely. Following these observations, a sequential flow algorithm was developed aimed at matching the consumption point to weather variables like ambient temperature and secondly to most efficiently synchronize actuator components for a better energy management. This novel control method can save up to 58 percent of energy compared to the conventional on/off method during summer afternoons and averagely 20 percent during the rest of the day. It also has the merit to be cost effective as it barely requires no component retrofitting.