Heat Pump Hot Water Systems are also known as Heat Pump Water Heaters.

While they might look similar to a traditional electric hot water tank and still contain an electric heating element, they utilise heat-transference technology, similar to that of a split system air conditioner, which requires a lot less electricity to run.

There are 2 types of designs available – Split Systems which have the compressor and fan located in a separate unit, and Integrated Systems which we recommend. Integrated Systems are fully contained in the 1 unit, which saves on space.

Firstly, the water is warmed to 30-40 degrees using heat-transference technology. A fan in the Heat Pump Hot Water systems pulls in heat from surrounding air. The heat is absorbed into the refrigerant which is compressed into a vapour. This process causes the vapour to increase in temperature and pressure. The heated vapour flows through coils in the tank which heats the water. At this point the vapour turns back into a liquid again and the process starts over.

Then, in order to bring the water up to at least 60 degrees, which is required to prevent bacterial growth in the storage tank, the electric heating element kicks in.

So while they still require an electric heating element, its much less electricity than what a traditional electric storage tank system uses. In fact, they are so energy efficient, they are now part of 3 different government rebate schemes encouraging people to upgrade to a Heat Pump Hot Water.

Those who generate their own electricity using rooftop Solar Photovolatic (PV) systems will benefit from even greater reduced running costs.

Despite utilising warm air from the atmosphere, there are many models of Heat Pump Hot Waters which are suitable for houses in Geelong & Melbourne. However, they do operate more efficiently, therefore using less electricity, when the air is warmer.

Heat Pump Hot Water system are a great option for those want an electric hot water system with low running costs. Benefits include: 

• Low running costs – Heat Pump Hot Water Systems use 60-75% less electricity than a traditional electric tank hot water systems.
• Runs off electricity – those who generate their own electricity using Solar Photovolatic (PV) systems will benefit from even lower running costs.
• Low environmental footprint
• Rebates – currently the Victorian Government are offering rebates for replacing less energy efficient hot water systems with Heat Pump Hot Water systems

Heat Pump Hot Water systems are the only energy efficient option if you are wanting a hot water system which runs on electricity. As they positively contribute to a house’s star rating, they are now commonly being used in new home builds.

As home rooftop Solar Photovolatic (PV) systems are becoming more popular, the demand for electric appliances, including hot water, are increasing. While traditional electric storage tank hot water systems use too much electricity for them to be used with Solar PV systems, Heat Pump Hot Water systems use a lot less electricity, so the electricity generated with your home solar panels can be used to assist the operation of your Heat Pump Hot Water.

In order to encourage the installation of energy efficient electrical appliances, there are currently Government Rebates available for upgrading less efficient hot water heating systems to Heat Pump Hot Water systems (see installation & running costs section).

Scroll down for our Hot Water Comparison Chart and compare installation & running cost of Heat Pump Hot Water to other types of hot water systems.

Heat Pump Hot Water installation costs:

If you are looking for an environmentally friendly Hot Water system, with low running costs, your options are Hot Water Heat Pumps and Solar Hot Water.

Both currently are eligible for Government rebates, but a benefit of Hot Water Heat Pumps are they are cheaper than Solar to install, plus you don’t need hot water solar panels to be installed on your roof.

Installation costs can depend on what type of hot water system you currently have and where its located. For example, if you already have a dedicated electrical circuit and the new system would be installed in the same place as the last, the installation costs would be less than if you needed the system moved to a new location and a circuit installed.

See our comparison chart below to compare installation costs with other types of hot water systems.

Heat Pump Hot Water running costs:

In terms of running costs, Heat Pump Hot Water uses 60-75% less electricity than traditional Electric Tank Hot Water systems. They are also cheaper to run than Gas Tank Storage Hot Water and Instantaneous Hot Water systems.

While not as cheap to run as Solar Hot Water, your running costs can be lowered if you generate your own electricity using a home rooftop Solar Photovolatic (PV) system.

If you don’t have Solar PV, we recommend using off-peak electricity tariffs (check your electricity provider offers off-peak tariffs), which means your Heat Pump Hot Water system will reheat itself of a night time which the tariffs are lower.

Please note, day-to-day running costs can vary depending on the ambient temperature outside. The warmer it is, the less energy your system needs to use to extract the heat out of the air to heat the water.

See below for our average annual running costs guide for Heat Pump Hot Water, based on a 4 person household.

Government Rebates

There are currently 3 different Government Rebate Schemes those installing Heat Pump Hot Water can benefit from:

• Small-Scale Technology Certificates (STCs) – this is a national scheme which provides rebates when installing an approved brand and model. The rebate is calculated on what is being installed, the suburb it is being installed in, the installation date and the amount of greenhouse gas the system is expected to save during its lifetime.
• Victorian Energy Upgrade Scheme (VEU) from which you can claim rebates in the form of VEECs (Victorian Energy Efficiency Certificates) – a similar scheme to STCs, offered by the Victorian Government. If eligible, you can claim both rebates.
• Solar Vic – A means-tested Victorian Government scheme which provides a rebate for Hot Water Heat Pumps & Solar Hot Water Systems.

All scheme eligibility are subject to certain criteria and limited to approved brands and models. Once of the main criteria for STCs and VEECs is you need to upgrade from a less energy efficient hot water system. However, the Solar Vic rebate is not dependent on what you are upgraded from, rather it’s means-tested.

All of our quotes include any rebates you are eligible for. For the STCs & VEU programs, we are able to apply for the rebates on your behalf, but the Solar Vic scheme needs to be claimed by the customer.

Looking for other options? Check out Instantaneous Hot Water Systems (also known as Continuous Flow Hot Water) or Solar Hot Water System.