A steady-state numerical model of a PV/microchannel integrated direct-expansion CO2 heat pump (PV-DXHP) water heater is developed, validated, and analyzed in the present study. To accomplish the objectives, a numerical model of a microchannel evaporator integrated into a CO2 PV DXHP is developed and validated. The effects of evaporator operating parameters on the heat absorption and pressure drop are analyzed. Utilizing the evaporator model, the PV-DXHP model is developed, and the baseline values of the heat pump operating parameters are determined from the evaporator parametric study. The PV-DXHP demonstrates high water heating capability, while maintaining a reasonably high COP. The COP has the highest dependency on the CO2 mass flow rate, while the water outlet temperature has the highest dependency on the water mass flow rate. The results are highly promising and indicate the system has potential to help meet the energy requirements for residential and industrial water heating demands.