diff --git a/homeassistant/components/melcloud/__init__.py b/homeassistant/components/melcloud/__init__.py
index d78807106c1..89e9155712f 100644
--- a/homeassistant/components/melcloud/__init__.py
+++ b/homeassistant/components/melcloud/__init__.py
@@ -4,45 +4,64 @@ from __future__ import annotations
 
 import asyncio
 from datetime import timedelta
-import logging
-from typing import Any
 
 from aiohttp import ClientConnectionError, ClientResponseError
-from pymelcloud import Device, get_devices
-from pymelcloud.atw_device import Zone
+from pymelcloud import get_devices
 
 from homeassistant.config_entries import ConfigEntry
 from homeassistant.const import CONF_TOKEN, Platform
 from homeassistant.core import HomeAssistant
-from homeassistant.exceptions import ConfigEntryAuthFailed, ConfigEntryNotReady
+from homeassistant.exceptions import ConfigEntryAuthFailed
+from homeassistant.helpers import device_registry as dr
 from homeassistant.helpers.aiohttp_client import async_get_clientsession
-from homeassistant.helpers.device_registry import CONNECTION_NETWORK_MAC, DeviceInfo
-from homeassistant.util import Throttle
+from homeassistant.helpers.update_coordinator import UpdateFailed
 
-from .const import DOMAIN
-
-_LOGGER = logging.getLogger(__name__)
-
-MIN_TIME_BETWEEN_UPDATES = timedelta(minutes=15)
+from .coordinator import MelCloudConfigEntry, MelCloudDeviceUpdateCoordinator
 
 PLATFORMS = [Platform.CLIMATE, Platform.SENSOR, Platform.WATER_HEATER]
 
-type MelCloudConfigEntry = ConfigEntry[dict[str, list[MelCloudDevice]]]
-
 
 async def async_setup_entry(hass: HomeAssistant, entry: MelCloudConfigEntry) -> bool:
     """Establish connection with MELCloud."""
-    conf = entry.data
-    try:
-        mel_devices = await mel_devices_setup(hass, conf[CONF_TOKEN])
-    except ClientResponseError as ex:
-        if isinstance(ex, ClientResponseError) and ex.code == 401:
-            raise ConfigEntryAuthFailed from ex
-        raise ConfigEntryNotReady from ex
-    except (TimeoutError, ClientConnectionError) as ex:
-        raise ConfigEntryNotReady from ex
+    token = entry.data[CONF_TOKEN]
+    session = async_get_clientsession(hass)
 
-    entry.runtime_data = mel_devices
+    try:
+        async with asyncio.timeout(10):
+            all_devices = await get_devices(
+                token,
+                session,
+                conf_update_interval=timedelta(minutes=30),
+                device_set_debounce=timedelta(seconds=2),
+            )
+    except ClientResponseError as ex:
+        if ex.status in (401, 403):
+            raise ConfigEntryAuthFailed from ex
+        if ex.status == 429:
+            raise UpdateFailed(
+                "MELCloud rate limit exceeded. Your account may be temporarily blocked"
+            ) from ex
+        raise UpdateFailed(f"Error communicating with MELCloud: {ex}") from ex
+    except (TimeoutError, ClientConnectionError) as ex:
+        raise UpdateFailed(f"Error communicating with MELCloud: {ex}") from ex
+
+    # Create per-device coordinators
+    coordinators: dict[str, list[MelCloudDeviceUpdateCoordinator]] = {}
+    device_registry = dr.async_get(hass)
+    for device_type, devices in all_devices.items():
+        coordinators[device_type] = []
+        for device in devices:
+            coordinator = MelCloudDeviceUpdateCoordinator(hass, device, entry)
+            # Perform initial refresh for this device
+            await coordinator.async_config_entry_first_refresh()
+            coordinators[device_type].append(coordinator)
+            # Register parent device now so zone entities can reference it via via_device
+            device_registry.async_get_or_create(
+                config_entry_id=entry.entry_id,
+                **coordinator.device_info,
+            )
+
+    entry.runtime_data = coordinators
     await hass.config_entries.async_forward_entry_setups(entry, PLATFORMS)
     return True
 
@@ -50,90 +69,3 @@ async def async_setup_entry(hass: HomeAssistant, entry: MelCloudConfigEntry) ->
 async def async_unload_entry(hass: HomeAssistant, config_entry: ConfigEntry) -> bool:
     """Unload a config entry."""
     return await hass.config_entries.async_unload_platforms(config_entry, PLATFORMS)
-
-
-class MelCloudDevice:
-    """MELCloud Device instance."""
-
-    def __init__(self, device: Device) -> None:
-        """Construct a device wrapper."""
-        self.device = device
-        self.name = device.name
-        self._available = True
-
-    @Throttle(MIN_TIME_BETWEEN_UPDATES)
-    async def async_update(self, **kwargs):
-        """Pull the latest data from MELCloud."""
-        try:
-            await self.device.update()
-            self._available = True
-        except ClientConnectionError:
-            _LOGGER.warning("Connection failed for %s", self.name)
-            self._available = False
-
-    async def async_set(self, properties: dict[str, Any]):
-        """Write state changes to the MELCloud API."""
-        try:
-            await self.device.set(properties)
-            self._available = True
-        except ClientConnectionError:
-            _LOGGER.warning("Connection failed for %s", self.name)
-            self._available = False
-
-    @property
-    def available(self) -> bool:
-        """Return True if entity is available."""
-        return self._available
-
-    @property
-    def device_id(self):
-        """Return device ID."""
-        return self.device.device_id
-
-    @property
-    def building_id(self):
-        """Return building ID of the device."""
-        return self.device.building_id
-
-    @property
-    def device_info(self) -> DeviceInfo:
-        """Return a device description for device registry."""
-        model = None
-        if (unit_infos := self.device.units) is not None:
-            model = ", ".join([x["model"] for x in unit_infos if x["model"]])
-        return DeviceInfo(
-            connections={(CONNECTION_NETWORK_MAC, self.device.mac)},
-            identifiers={(DOMAIN, f"{self.device.mac}-{self.device.serial}")},
-            manufacturer="Mitsubishi Electric",
-            model=model,
-            name=self.name,
-        )
-
-    def zone_device_info(self, zone: Zone) -> DeviceInfo:
-        """Return a zone device description for device registry."""
-        dev = self.device
-        return DeviceInfo(
-            identifiers={(DOMAIN, f"{dev.mac}-{dev.serial}-{zone.zone_index}")},
-            manufacturer="Mitsubishi Electric",
-            model="ATW zone device",
-            name=f"{self.name} {zone.name}",
-            via_device=(DOMAIN, f"{dev.mac}-{dev.serial}"),
-        )
-
-
-async def mel_devices_setup(
-    hass: HomeAssistant, token: str
-) -> dict[str, list[MelCloudDevice]]:
-    """Query connected devices from MELCloud."""
-    session = async_get_clientsession(hass)
-    async with asyncio.timeout(10):
-        all_devices = await get_devices(
-            token,
-            session,
-            conf_update_interval=timedelta(minutes=30),
-            device_set_debounce=timedelta(seconds=2),
-        )
-    wrapped_devices: dict[str, list[MelCloudDevice]] = {}
-    for device_type, devices in all_devices.items():
-        wrapped_devices[device_type] = [MelCloudDevice(device) for device in devices]
-    return wrapped_devices
diff --git a/homeassistant/components/melcloud/climate.py b/homeassistant/components/melcloud/climate.py
index 47a96d03f06..488268a3295 100644
--- a/homeassistant/components/melcloud/climate.py
+++ b/homeassistant/components/melcloud/climate.py
@@ -2,7 +2,6 @@
 
 from __future__ import annotations
 
-from datetime import timedelta
 from typing import Any, cast
 
 from pymelcloud import DEVICE_TYPE_ATA, DEVICE_TYPE_ATW, AtaDevice, AtwDevice
@@ -29,7 +28,6 @@ from homeassistant.core import HomeAssistant
 from homeassistant.helpers import config_validation as cv, entity_platform
 from homeassistant.helpers.entity_platform import AddConfigEntryEntitiesCallback
 
-from . import MelCloudConfigEntry, MelCloudDevice
 from .const import (
     ATTR_STATUS,
     ATTR_VANE_HORIZONTAL,
@@ -40,9 +38,8 @@ from .const import (
     SERVICE_SET_VANE_HORIZONTAL,
     SERVICE_SET_VANE_VERTICAL,
 )
-
-SCAN_INTERVAL = timedelta(seconds=60)
-
+from .coordinator import MelCloudConfigEntry, MelCloudDeviceUpdateCoordinator
+from .entity import MelCloudEntity
 
 ATA_HVAC_MODE_LOOKUP = {
     ata.OPERATION_MODE_HEAT: HVACMode.HEAT,
@@ -74,27 +71,24 @@ ATW_ZONE_HVAC_ACTION_LOOKUP = {
 
 
 async def async_setup_entry(
-    hass: HomeAssistant,
+    _hass: HomeAssistant,
     entry: MelCloudConfigEntry,
     async_add_entities: AddConfigEntryEntitiesCallback,
 ) -> None:
     """Set up MelCloud device climate based on config_entry."""
-    mel_devices = entry.runtime_data
+    coordinators = entry.runtime_data
     entities: list[AtaDeviceClimate | AtwDeviceZoneClimate] = [
-        AtaDeviceClimate(mel_device, mel_device.device)
-        for mel_device in mel_devices[DEVICE_TYPE_ATA]
+        AtaDeviceClimate(coordinator, coordinator.device)
+        for coordinator in coordinators.get(DEVICE_TYPE_ATA, [])
     ]
     entities.extend(
         [
-            AtwDeviceZoneClimate(mel_device, mel_device.device, zone)
-            for mel_device in mel_devices[DEVICE_TYPE_ATW]
-            for zone in mel_device.device.zones
+            AtwDeviceZoneClimate(coordinator, coordinator.device, zone)
+            for coordinator in coordinators.get(DEVICE_TYPE_ATW, [])
+            for zone in coordinator.device.zones
         ]
     )
-    async_add_entities(
-        entities,
-        True,
-    )
+    async_add_entities(entities)
 
     platform = entity_platform.async_get_current_platform()
     platform.async_register_entity_service(
@@ -109,21 +103,19 @@ async def async_setup_entry(
     )
 
 
-class MelCloudClimate(ClimateEntity):
+class MelCloudClimate(MelCloudEntity, ClimateEntity):
     """Base climate device."""
 
     _attr_temperature_unit = UnitOfTemperature.CELSIUS
-    _attr_has_entity_name = True
     _attr_name = None
 
-    def __init__(self, device: MelCloudDevice) -> None:
+    def __init__(
+        self,
+        coordinator: MelCloudDeviceUpdateCoordinator,
+    ) -> None:
         """Initialize the climate."""
-        self.api = device
-        self._base_device = self.api.device
-
-    async def async_update(self) -> None:
-        """Update state from MELCloud."""
-        await self.api.async_update()
+        super().__init__(coordinator)
+        self._base_device = self.coordinator.device
 
     @property
     def target_temperature_step(self) -> float | None:
@@ -142,26 +134,29 @@ class AtaDeviceClimate(MelCloudClimate):
         | ClimateEntityFeature.TURN_ON
     )
 
-    def __init__(self, device: MelCloudDevice, ata_device: AtaDevice) -> None:
+    def __init__(
+        self,
+        coordinator: MelCloudDeviceUpdateCoordinator,
+        ata_device: AtaDevice,
+    ) -> None:
         """Initialize the climate."""
-        super().__init__(device)
+        super().__init__(coordinator)
         self._device = ata_device
 
-        self._attr_unique_id = f"{self.api.device.serial}-{self.api.device.mac}"
-        self._attr_device_info = self.api.device_info
+        self._attr_unique_id = (
+            f"{self.coordinator.device.serial}-{self.coordinator.device.mac}"
+        )
+        self._attr_device_info = self.coordinator.device_info
 
-    async def async_added_to_hass(self) -> None:
-        """When entity is added to hass."""
-        await super().async_added_to_hass()
-
-        # We can only check for vane_horizontal once we fetch the device data from the cloud
+        # Add horizontal swing if device supports it
         if self._device.vane_horizontal:
             self._attr_supported_features |= ClimateEntityFeature.SWING_HORIZONTAL_MODE
 
     @property
     def extra_state_attributes(self) -> dict[str, Any] | None:
         """Return the optional state attributes with device specific additions."""
-        attr = {}
+        attr: dict[str, Any] = {}
+        attr.update(self.coordinator.extra_attributes)
 
         if vane_horizontal := self._device.vane_horizontal:
             attr.update(
@@ -208,7 +203,7 @@ class AtaDeviceClimate(MelCloudClimate):
         """Set new target hvac mode."""
         set_dict: dict[str, Any] = {}
         self._apply_set_hvac_mode(hvac_mode, set_dict)
-        await self._device.set(set_dict)
+        await self.coordinator.async_set(set_dict)
 
     @property
     def hvac_modes(self) -> list[HVACMode]:
@@ -241,7 +236,7 @@ class AtaDeviceClimate(MelCloudClimate):
             set_dict["target_temperature"] = kwargs.get(ATTR_TEMPERATURE)
 
         if set_dict:
-            await self._device.set(set_dict)
+            await self.coordinator.async_set(set_dict)
 
     @property
     def fan_mode(self) -> str | None:
@@ -250,7 +245,7 @@ class AtaDeviceClimate(MelCloudClimate):
 
     async def async_set_fan_mode(self, fan_mode: str) -> None:
         """Set new target fan mode."""
-        await self._device.set({"fan_speed": fan_mode})
+        await self.coordinator.async_set({"fan_speed": fan_mode})
 
     @property
     def fan_modes(self) -> list[str] | None:
@@ -264,7 +259,7 @@ class AtaDeviceClimate(MelCloudClimate):
                 f"Invalid horizontal vane position {position}. Valid positions:"
                 f" [{self._device.vane_horizontal_positions}]."
             )
-        await self._device.set({ata.PROPERTY_VANE_HORIZONTAL: position})
+        await self.coordinator.async_set({ata.PROPERTY_VANE_HORIZONTAL: position})
 
     async def async_set_vane_vertical(self, position: str) -> None:
         """Set vertical vane position."""
@@ -273,7 +268,7 @@ class AtaDeviceClimate(MelCloudClimate):
                 f"Invalid vertical vane position {position}. Valid positions:"
                 f" [{self._device.vane_vertical_positions}]."
             )
-        await self._device.set({ata.PROPERTY_VANE_VERTICAL: position})
+        await self.coordinator.async_set({ata.PROPERTY_VANE_VERTICAL: position})
 
     @property
     def swing_mode(self) -> str | None:
@@ -305,11 +300,11 @@ class AtaDeviceClimate(MelCloudClimate):
 
     async def async_turn_on(self) -> None:
         """Turn the entity on."""
-        await self._device.set({"power": True})
+        await self.coordinator.async_set({"power": True})
 
     async def async_turn_off(self) -> None:
         """Turn the entity off."""
-        await self._device.set({"power": False})
+        await self.coordinator.async_set({"power": False})
 
     @property
     def min_temp(self) -> float:
@@ -338,15 +333,18 @@ class AtwDeviceZoneClimate(MelCloudClimate):
     _attr_supported_features = ClimateEntityFeature.TARGET_TEMPERATURE
 
     def __init__(
-        self, device: MelCloudDevice, atw_device: AtwDevice, atw_zone: Zone
+        self,
+        coordinator: MelCloudDeviceUpdateCoordinator,
+        atw_device: AtwDevice,
+        atw_zone: Zone,
     ) -> None:
         """Initialize the climate."""
-        super().__init__(device)
+        super().__init__(coordinator)
         self._device = atw_device
         self._zone = atw_zone
 
-        self._attr_unique_id = f"{self.api.device.serial}-{atw_zone.zone_index}"
-        self._attr_device_info = self.api.zone_device_info(atw_zone)
+        self._attr_unique_id = f"{self.coordinator.device.serial}-{atw_zone.zone_index}"
+        self._attr_device_info = self.coordinator.zone_device_info(atw_zone)
 
     @property
     def extra_state_attributes(self) -> dict[str, Any]:
@@ -360,15 +358,16 @@ class AtwDeviceZoneClimate(MelCloudClimate):
     @property
     def hvac_mode(self) -> HVACMode:
         """Return hvac operation ie. heat, cool mode."""
-        mode = self._zone.operation_mode
-        if not self._device.power or mode is None:
+        # Use zone status (heat/cool/idle) not operation_mode (heat-thermostat/etc.)
+        status = self._zone.status
+        if not self._device.power or status is None:
             return HVACMode.OFF
-        return ATW_ZONE_HVAC_MODE_LOOKUP.get(mode, HVACMode.OFF)
+        return ATW_ZONE_HVAC_MODE_LOOKUP.get(status, HVACMode.OFF)
 
     async def async_set_hvac_mode(self, hvac_mode: HVACMode) -> None:
         """Set new target hvac mode."""
         if hvac_mode == HVACMode.OFF:
-            await self._device.set({"power": False})
+            await self.coordinator.async_set({"power": False})
             return
 
         operation_mode = ATW_ZONE_HVAC_MODE_REVERSE_LOOKUP.get(hvac_mode)
@@ -381,7 +380,7 @@ class AtwDeviceZoneClimate(MelCloudClimate):
             props = {PROPERTY_ZONE_2_OPERATION_MODE: operation_mode}
         if self.hvac_mode == HVACMode.OFF:
             props["power"] = True
-        await self._device.set(props)
+        await self.coordinator.async_set(props)
 
     @property
     def hvac_modes(self) -> list[HVACMode]:
@@ -410,3 +409,4 @@ class AtwDeviceZoneClimate(MelCloudClimate):
         await self._zone.set_target_temperature(
             kwargs.get(ATTR_TEMPERATURE, self.target_temperature)
         )
+        await self.coordinator.async_request_refresh()
diff --git a/homeassistant/components/melcloud/config_flow.py b/homeassistant/components/melcloud/config_flow.py
index d2c9d67f29a..ff0b06d3775 100644
--- a/homeassistant/components/melcloud/config_flow.py
+++ b/homeassistant/components/melcloud/config_flow.py
@@ -60,6 +60,10 @@ class FlowHandler(ConfigFlow, domain=DOMAIN):
             return self.async_abort(reason="cannot_connect")
         except (TimeoutError, ClientError):
             return self.async_abort(reason="cannot_connect")
+        except AttributeError:
+            # python-melcloud library bug: login() raises AttributeError on invalid
+            # credentials when API response doesn't contain expected "LoginData" key
+            return self.async_abort(reason="invalid_auth")
 
         return await self._create_entry(username, acquired_token)
 
diff --git a/homeassistant/components/melcloud/coordinator.py b/homeassistant/components/melcloud/coordinator.py
new file mode 100644
index 00000000000..3b4c6f57f5b
--- /dev/null
+++ b/homeassistant/components/melcloud/coordinator.py
@@ -0,0 +1,193 @@
+"""DataUpdateCoordinator for the MELCloud integration."""
+
+from __future__ import annotations
+
+from datetime import timedelta
+import logging
+from typing import Any
+
+from aiohttp import ClientConnectionError, ClientResponseError
+from pymelcloud import Device
+from pymelcloud.atw_device import Zone
+
+from homeassistant.config_entries import ConfigEntry
+from homeassistant.core import HomeAssistant
+from homeassistant.exceptions import ConfigEntryAuthFailed
+from homeassistant.helpers.debounce import Debouncer
+from homeassistant.helpers.device_registry import CONNECTION_NETWORK_MAC, DeviceInfo
+from homeassistant.helpers.update_coordinator import DataUpdateCoordinator, UpdateFailed
+
+from .const import DOMAIN
+
+_LOGGER = logging.getLogger(__name__)
+
+# Delay before refreshing after a state change to allow device to process
+# and avoid race conditions with rapid sequential changes
+REQUEST_REFRESH_DELAY = 1.5
+
+# Default update interval in minutes (matches upstream Throttle value)
+DEFAULT_UPDATE_INTERVAL = 15
+
+# Retry interval in seconds for transient failures
+RETRY_INTERVAL_SECONDS = 30
+
+# Number of consecutive failures before marking device unavailable
+MAX_CONSECUTIVE_FAILURES = 3
+
+
+class MelCloudDeviceUpdateCoordinator(DataUpdateCoordinator[None]):
+    """Per-device coordinator for MELCloud data updates."""
+
+    def __init__(
+        self,
+        hass: HomeAssistant,
+        device: Device,
+        config_entry: ConfigEntry,
+    ) -> None:
+        """Initialize the per-device coordinator."""
+        self.device = device
+        self.device_available = True
+        self._consecutive_failures = 0
+
+        super().__init__(
+            hass,
+            _LOGGER,
+            config_entry=config_entry,
+            name=f"{DOMAIN}_{device.name}",
+            update_interval=timedelta(minutes=DEFAULT_UPDATE_INTERVAL),
+            always_update=True,
+            request_refresh_debouncer=Debouncer(
+                hass,
+                _LOGGER,
+                cooldown=REQUEST_REFRESH_DELAY,
+                immediate=False,
+            ),
+        )
+
+    @property
+    def extra_attributes(self) -> dict[str, Any]:
+        """Return extra device attributes."""
+        data: dict[str, Any] = {
+            "device_id": self.device.device_id,
+            "serial": self.device.serial,
+            "mac": self.device.mac,
+        }
+        if (unit_infos := self.device.units) is not None:
+            for i, unit in enumerate(unit_infos[:2]):
+                data[f"unit_{i}_model"] = unit.get("model")
+                data[f"unit_{i}_serial"] = unit.get("serial")
+        return data
+
+    @property
+    def device_id(self) -> str:
+        """Return device ID."""
+        return self.device.device_id
+
+    @property
+    def building_id(self) -> str:
+        """Return building ID of the device."""
+        return self.device.building_id
+
+    @property
+    def device_info(self) -> DeviceInfo:
+        """Return a device description for device registry."""
+        model = None
+        if (unit_infos := self.device.units) is not None:
+            model = ", ".join([x["model"] for x in unit_infos if x["model"]])
+        return DeviceInfo(
+            connections={(CONNECTION_NETWORK_MAC, self.device.mac)},
+            identifiers={(DOMAIN, f"{self.device.mac}-{self.device.serial}")},
+            manufacturer="Mitsubishi Electric",
+            model=model,
+            name=self.device.name,
+        )
+
+    def zone_device_info(self, zone: Zone) -> DeviceInfo:
+        """Return a zone device description for device registry."""
+        dev = self.device
+        return DeviceInfo(
+            identifiers={(DOMAIN, f"{dev.mac}-{dev.serial}-{zone.zone_index}")},
+            manufacturer="Mitsubishi Electric",
+            model="ATW zone device",
+            name=f"{self.device.name} {zone.name}",
+            via_device=(DOMAIN, f"{dev.mac}-{dev.serial}"),
+        )
+
+    async def _async_update_data(self) -> None:
+        """Fetch data for this specific device from MELCloud."""
+        try:
+            await self.device.update()
+            # Success - reset failure counter and restore normal interval
+            if self._consecutive_failures > 0:
+                _LOGGER.info(
+                    "Connection restored for %s after %d failed attempt(s)",
+                    self.device.name,
+                    self._consecutive_failures,
+                )
+                self._consecutive_failures = 0
+                self.update_interval = timedelta(minutes=DEFAULT_UPDATE_INTERVAL)
+            self.device_available = True
+        except ClientResponseError as ex:
+            if ex.status in (401, 403):
+                raise ConfigEntryAuthFailed from ex
+            if ex.status == 429:
+                _LOGGER.error(
+                    "MELCloud rate limit exceeded for %s. Your account may be "
+                    "temporarily blocked",
+                    self.device.name,
+                )
+                # Rate limit - mark unavailable immediately
+                self.device_available = False
+                raise UpdateFailed(
+                    f"Rate limit exceeded for {self.device.name}"
+                ) from ex
+            # Other HTTP errors - use retry logic
+            self._handle_failure(f"Error updating {self.device.name}: {ex}", ex)
+        except ClientConnectionError as ex:
+            self._handle_failure(f"Connection failed for {self.device.name}: {ex}", ex)
+
+    def _handle_failure(self, message: str, exception: Exception | None = None) -> None:
+        """Handle a connection failure with retry logic.
+
+        For transient failures, entities remain available with their last known
+        values for up to MAX_CONSECUTIVE_FAILURES attempts. During retries, the
+        update interval is shortened to RETRY_INTERVAL_SECONDS for faster recovery.
+        After the threshold is reached, entities are marked unavailable.
+        """
+        self._consecutive_failures += 1
+
+        if self._consecutive_failures < MAX_CONSECUTIVE_FAILURES:
+            # Keep entities available with cached data, use shorter retry interval
+            _LOGGER.warning(
+                "%s (attempt %d/%d, retrying in %ds)",
+                message,
+                self._consecutive_failures,
+                MAX_CONSECUTIVE_FAILURES,
+                RETRY_INTERVAL_SECONDS,
+            )
+            self.update_interval = timedelta(seconds=RETRY_INTERVAL_SECONDS)
+        else:
+            # Threshold reached - mark unavailable and restore normal interval
+            _LOGGER.warning(
+                "%s (attempt %d/%d, marking unavailable)",
+                message,
+                self._consecutive_failures,
+                MAX_CONSECUTIVE_FAILURES,
+            )
+            self.device_available = False
+            self.update_interval = timedelta(minutes=DEFAULT_UPDATE_INTERVAL)
+            raise UpdateFailed(message) from exception
+
+    async def async_set(self, properties: dict[str, Any]) -> None:
+        """Write state changes to the MELCloud API."""
+        try:
+            await self.device.set(properties)
+            self.device_available = True
+        except ClientConnectionError:
+            _LOGGER.warning("Connection failed for %s", self.device.name)
+            self.device_available = False
+
+        await self.async_request_refresh()
+
+
+type MelCloudConfigEntry = ConfigEntry[dict[str, list[MelCloudDeviceUpdateCoordinator]]]
diff --git a/homeassistant/components/melcloud/diagnostics.py b/homeassistant/components/melcloud/diagnostics.py
index 4606b7c25e5..c601f886470 100644
--- a/homeassistant/components/melcloud/diagnostics.py
+++ b/homeassistant/components/melcloud/diagnostics.py
@@ -9,7 +9,7 @@ from homeassistant.const import CONF_TOKEN, CONF_USERNAME
 from homeassistant.core import HomeAssistant
 from homeassistant.helpers import entity_registry as er
 
-from . import MelCloudConfigEntry
+from .coordinator import MelCloudConfigEntry
 
 TO_REDACT = {
     CONF_USERNAME,
diff --git a/homeassistant/components/melcloud/entity.py b/homeassistant/components/melcloud/entity.py
new file mode 100644
index 00000000000..b0d9b839481
--- /dev/null
+++ b/homeassistant/components/melcloud/entity.py
@@ -0,0 +1,18 @@
+"""Base entity for MELCloud integration."""
+
+from __future__ import annotations
+
+from homeassistant.helpers.update_coordinator import CoordinatorEntity
+
+from .coordinator import MelCloudDeviceUpdateCoordinator
+
+
+class MelCloudEntity(CoordinatorEntity[MelCloudDeviceUpdateCoordinator]):
+    """Base class for MELCloud entities."""
+
+    _attr_has_entity_name = True
+
+    @property
+    def available(self) -> bool:
+        """Return True if entity is available."""
+        return super().available and self.coordinator.device_available
diff --git a/homeassistant/components/melcloud/manifest.json b/homeassistant/components/melcloud/manifest.json
index c68b9cab3c3..b683ee6671a 100644
--- a/homeassistant/components/melcloud/manifest.json
+++ b/homeassistant/components/melcloud/manifest.json
@@ -6,6 +6,6 @@
   "documentation": "https://www.home-assistant.io/integrations/melcloud",
   "integration_type": "device",
   "iot_class": "cloud_polling",
-  "loggers": ["pymelcloud"],
+  "loggers": ["melcloud"],
   "requirements": ["python-melcloud==0.1.2"]
 }
diff --git a/homeassistant/components/melcloud/sensor.py b/homeassistant/components/melcloud/sensor.py
index 1d36c74f27c..f88150ac6cd 100644
--- a/homeassistant/components/melcloud/sensor.py
+++ b/homeassistant/components/melcloud/sensor.py
@@ -19,7 +19,8 @@ from homeassistant.const import UnitOfEnergy, UnitOfTemperature
 from homeassistant.core import HomeAssistant
 from homeassistant.helpers.entity_platform import AddConfigEntryEntitiesCallback
 
-from . import MelCloudConfigEntry, MelCloudDevice
+from .coordinator import MelCloudConfigEntry, MelCloudDeviceUpdateCoordinator
+from .entity import MelCloudEntity
 
 
 @dataclasses.dataclass(frozen=True, kw_only=True)
@@ -111,70 +112,67 @@ ATW_ZONE_SENSORS: tuple[MelcloudSensorEntityDescription, ...] = (
 
 
 async def async_setup_entry(
-    hass: HomeAssistant,
+    _hass: HomeAssistant,
     entry: MelCloudConfigEntry,
     async_add_entities: AddConfigEntryEntitiesCallback,
 ) -> None:
     """Set up MELCloud device sensors based on config_entry."""
-    mel_devices = entry.runtime_data
+    coordinators = entry.runtime_data
 
     entities: list[MelDeviceSensor] = [
-        MelDeviceSensor(mel_device, description)
+        MelDeviceSensor(coordinator, description)
         for description in ATA_SENSORS
-        for mel_device in mel_devices[DEVICE_TYPE_ATA]
-        if description.enabled(mel_device)
+        for coordinator in coordinators.get(DEVICE_TYPE_ATA, [])
+        if description.enabled(coordinator)
     ] + [
-        MelDeviceSensor(mel_device, description)
+        MelDeviceSensor(coordinator, description)
         for description in ATW_SENSORS
-        for mel_device in mel_devices[DEVICE_TYPE_ATW]
-        if description.enabled(mel_device)
+        for coordinator in coordinators.get(DEVICE_TYPE_ATW, [])
+        if description.enabled(coordinator)
     ]
     entities.extend(
         [
-            AtwZoneSensor(mel_device, zone, description)
-            for mel_device in mel_devices[DEVICE_TYPE_ATW]
-            for zone in mel_device.device.zones
+            AtwZoneSensor(coordinator, zone, description)
+            for coordinator in coordinators.get(DEVICE_TYPE_ATW, [])
+            for zone in coordinator.device.zones
             for description in ATW_ZONE_SENSORS
             if description.enabled(zone)
         ]
     )
-    async_add_entities(entities, True)
+    async_add_entities(entities)
 
 
-class MelDeviceSensor(SensorEntity):
+class MelDeviceSensor(MelCloudEntity, SensorEntity):
     """Representation of a Sensor."""
 
     entity_description: MelcloudSensorEntityDescription
-    _attr_has_entity_name = True
 
     def __init__(
         self,
-        api: MelCloudDevice,
+        coordinator: MelCloudDeviceUpdateCoordinator,
         description: MelcloudSensorEntityDescription,
     ) -> None:
         """Initialize the sensor."""
-        self._api = api
+        super().__init__(coordinator)
         self.entity_description = description
 
-        self._attr_unique_id = f"{api.device.serial}-{api.device.mac}-{description.key}"
-        self._attr_device_info = api.device_info
+        self._attr_unique_id = (
+            f"{coordinator.device.serial}-{coordinator.device.mac}-{description.key}"
+        )
+        self._attr_device_info = coordinator.device_info
 
     @property
     def native_value(self) -> float | None:
         """Return the state of the sensor."""
-        return self.entity_description.value_fn(self._api)
-
-    async def async_update(self) -> None:
-        """Retrieve latest state."""
-        await self._api.async_update()
+        return self.entity_description.value_fn(self.coordinator)
 
 
 class AtwZoneSensor(MelDeviceSensor):
-    """Air-to-Air device sensor."""
+    """Air-to-Water zone sensor."""
 
     def __init__(
         self,
-        api: MelCloudDevice,
+        coordinator: MelCloudDeviceUpdateCoordinator,
         zone: Zone,
         description: MelcloudSensorEntityDescription,
     ) -> None:
@@ -184,9 +182,9 @@ class AtwZoneSensor(MelDeviceSensor):
                 description,
                 key=f"{description.key}-zone-{zone.zone_index}",
             )
-        super().__init__(api, description)
+        super().__init__(coordinator, description)
 
-        self._attr_device_info = api.zone_device_info(zone)
+        self._attr_device_info = coordinator.zone_device_info(zone)
         self._zone = zone
 
     @property
diff --git a/homeassistant/components/melcloud/strings.json b/homeassistant/components/melcloud/strings.json
index b670530283f..c8a1d14c214 100644
--- a/homeassistant/components/melcloud/strings.json
+++ b/homeassistant/components/melcloud/strings.json
@@ -43,6 +43,9 @@
   },
   "entity": {
     "sensor": {
+      "energy_consumed": {
+        "name": "Energy consumed"
+      },
       "flow_temperature": {
         "name": "Flow temperature"
       },
diff --git a/homeassistant/components/melcloud/water_heater.py b/homeassistant/components/melcloud/water_heater.py
index f006df2478e..6b91ef4a353 100644
--- a/homeassistant/components/melcloud/water_heater.py
+++ b/homeassistant/components/melcloud/water_heater.py
@@ -21,27 +21,27 @@ from homeassistant.const import UnitOfTemperature
 from homeassistant.core import HomeAssistant
 from homeassistant.helpers.entity_platform import AddConfigEntryEntitiesCallback
 
-from . import MelCloudConfigEntry, MelCloudDevice
 from .const import ATTR_STATUS
+from .coordinator import MelCloudConfigEntry, MelCloudDeviceUpdateCoordinator
+from .entity import MelCloudEntity
 
 
 async def async_setup_entry(
-    hass: HomeAssistant,
+    _hass: HomeAssistant,
     entry: MelCloudConfigEntry,
     async_add_entities: AddConfigEntryEntitiesCallback,
 ) -> None:
     """Set up MelCloud device climate based on config_entry."""
-    mel_devices = entry.runtime_data
+    coordinators = entry.runtime_data
     async_add_entities(
         [
-            AtwWaterHeater(mel_device, mel_device.device)
-            for mel_device in mel_devices[DEVICE_TYPE_ATW]
-        ],
-        True,
+            AtwWaterHeater(coordinator, coordinator.device)
+            for coordinator in coordinators.get(DEVICE_TYPE_ATW, [])
+        ]
     )
 
 
-class AtwWaterHeater(WaterHeaterEntity):
+class AtwWaterHeater(MelCloudEntity, WaterHeaterEntity):
     """Air-to-Water water heater."""
 
     _attr_supported_features = (
@@ -49,27 +49,26 @@ class AtwWaterHeater(WaterHeaterEntity):
         | WaterHeaterEntityFeature.ON_OFF
         | WaterHeaterEntityFeature.OPERATION_MODE
     )
-    _attr_has_entity_name = True
     _attr_name = None
 
-    def __init__(self, api: MelCloudDevice, device: AtwDevice) -> None:
+    def __init__(
+        self,
+        coordinator: MelCloudDeviceUpdateCoordinator,
+        device: AtwDevice,
+    ) -> None:
         """Initialize water heater device."""
-        self._api = api
+        super().__init__(coordinator)
         self._device = device
-        self._attr_unique_id = api.device.serial
-        self._attr_device_info = api.device_info
+        self._attr_unique_id = coordinator.device.serial
+        self._attr_device_info = coordinator.device_info
 
-    async def async_update(self) -> None:
-        """Update state from MELCloud."""
-        await self._api.async_update()
-
-    async def async_turn_on(self, **kwargs: Any) -> None:
+    async def async_turn_on(self, **_kwargs: Any) -> None:
         """Turn the entity on."""
-        await self._device.set({PROPERTY_POWER: True})
+        await self.coordinator.async_set({PROPERTY_POWER: True})
 
-    async def async_turn_off(self, **kwargs: Any) -> None:
+    async def async_turn_off(self, **_kwargs: Any) -> None:
         """Turn the entity off."""
-        await self._device.set({PROPERTY_POWER: False})
+        await self.coordinator.async_set({PROPERTY_POWER: False})
 
     @property
     def extra_state_attributes(self) -> dict[str, Any] | None:
@@ -103,7 +102,7 @@ class AtwWaterHeater(WaterHeaterEntity):
 
     async def async_set_temperature(self, **kwargs: Any) -> None:
         """Set new target temperature."""
-        await self._device.set(
+        await self.coordinator.async_set(
             {
                 PROPERTY_TARGET_TANK_TEMPERATURE: kwargs.get(
                     "temperature", self.target_temperature
@@ -113,7 +112,7 @@ class AtwWaterHeater(WaterHeaterEntity):
 
     async def async_set_operation_mode(self, operation_mode: str) -> None:
         """Set new target operation mode."""
-        await self._device.set({PROPERTY_OPERATION_MODE: operation_mode})
+        await self.coordinator.async_set({PROPERTY_OPERATION_MODE: operation_mode})
 
     @property
     def min_temp(self) -> float:
diff --git a/tests/components/melcloud/test_atw_zone_sensor.py b/tests/components/melcloud/test_atw_zone_sensor.py
index 5ffb6dd7ff5..0f947eefdaf 100644
--- a/tests/components/melcloud/test_atw_zone_sensor.py
+++ b/tests/components/melcloud/test_atw_zone_sensor.py
@@ -1,6 +1,6 @@
 """Test the MELCloud ATW zone sensor."""
 
-from unittest.mock import patch
+from unittest.mock import MagicMock, patch
 
 import pytest
 
@@ -8,32 +8,45 @@ from homeassistant.components.melcloud.sensor import ATW_ZONE_SENSORS, AtwZoneSe
 
 
 @pytest.fixture
-def mock_device():
-    """Mock MELCloud device."""
-    with patch("homeassistant.components.melcloud.MelCloudDevice") as mock:
-        mock.name = "name"
-        mock.device.serial = 1234
-        mock.device.mac = "11:11:11:11:11:11"
+def mock_coordinator():
+    """Mock MELCloud coordinator."""
+    with patch(
+        "homeassistant.components.melcloud.coordinator.MelCloudDeviceUpdateCoordinator"
+    ) as mock:
         yield mock
 
 
+@pytest.fixture
+def mock_device(mock_coordinator):
+    """Mock MELCloud device."""
+    mock = MagicMock()
+    mock.name = "name"
+    mock.device.serial = 1234
+    mock.device.mac = "11:11:11:11:11:11"
+    mock.zone_device_info.return_value = {}
+    mock.coordinator = mock_coordinator
+    return mock
+
+
 @pytest.fixture
 def mock_zone_1():
     """Mock zone 1."""
-    with patch("pymelcloud.atw_device.Zone") as mock:
-        mock.zone_index = 1
-        yield mock
+    mock = MagicMock()
+    mock.zone_index = 1
+    return mock
 
 
 @pytest.fixture
 def mock_zone_2():
     """Mock zone 2."""
-    with patch("pymelcloud.atw_device.Zone") as mock:
-        mock.zone_index = 2
-        yield mock
+    mock = MagicMock()
+    mock.zone_index = 2
+    return mock
 
 
-def test_zone_unique_ids(mock_device, mock_zone_1, mock_zone_2) -> None:
+def test_zone_unique_ids(
+    mock_coordinator, mock_device, mock_zone_1, mock_zone_2
+) -> None:
     """Test unique id generation correctness."""
     sensor_1 = AtwZoneSensor(
         mock_device,
diff --git a/tests/components/melcloud/test_config_flow.py b/tests/components/melcloud/test_config_flow.py
index 3f6e42ac264..618d132fb23 100644
--- a/tests/components/melcloud/test_config_flow.py
+++ b/tests/components/melcloud/test_config_flow.py
@@ -75,7 +75,11 @@ async def test_form(hass: HomeAssistant, mock_login, mock_get_devices) -> None:
 
 @pytest.mark.parametrize(
     ("error", "reason"),
-    [(ClientError(), "cannot_connect"), (TimeoutError(), "cannot_connect")],
+    [
+        (ClientError(), "cannot_connect"),
+        (TimeoutError(), "cannot_connect"),
+        (AttributeError(), "invalid_auth"),
+    ],
 )
 async def test_form_errors(
     hass: HomeAssistant, mock_login, mock_get_devices, error, reason