Can you offer state and federal rebates on heat pumps? Please get in touch to be added to our installer list. Likewise if you are an electrician and would like to be referred for other induction cooktop or airconditioning jobs locally.
Singing in the shower
A guide to using cheap and efficient hot water in your home.
Your hot water system may not be an exciting conversation starter but choosing the right system will make the biggest financial impact on reducing your energy costs.
The humble hero
While hot water is a big energy user, it is also one of the most flexible household loads on the grid meaning it can play a big role in a more efficient and clean energy landscape. Unlike an appliance like your stove which you use at a certain time, with a good electric heat pump you can choose when your system heats your water and consumes energy.
This control can benefit both your energy bills and the grid, as your hot water tank effectively acts as a large cheap home battery. You can store energy as hot water when electricity rates are lower, or if you have solar panels you can heat your water when you’re producing solar power, making free hot water with zero emissions. When we consider all our hot water systems together, they become an important piece of technology to combat our domestic emissions.
By using more efficient electric hot water systems, and using them smarter, we can create a cheaper and cleaner electricity grid for everyone.
Did you know that water heating is the biggest source of carbon emissions in NSW homes, responsible for a quarter of all energy use.
Types of Hot Water Systems
Heat Pumps
Recommended. Heat pumps transfer heat from the surrounding air to heat the water which makes them highly efficient, typically using up to 65-75% less energy compared to electric resistance heaters. They work best in moderate to warm climates like we have in NSW. Generally they have a higher upfront cost. However, this is partially offset with current government rebates and they can save you money in the long run through reduced energy consumption.
Electric Resistance Heaters
Electric resistance heaters use electricity to heat an element like a large kettle. They are relatively inexpensive to purchase, install and service, however, they use roughly 3 to 4 times more electricity than a heat pump. If you have a good-sized solar PV system then a decent solution can be installing a timer or smart device to ensure your water heats during the day, rather than the typical overnight “off peak” setting.
Gas Water Heaters
Gas systems use natural gas or LPG as a fuel source. They are relatively cheap to run however their emissions contribute to air pollution and fuel climate change which is why we do not support the installation of gas appliances. They also require venting and maintenance for safety as they are burning a combustible fuel.
Solar Thermal Heaters
Not to be confused with solar PV panels, which generate electricity, for a long time solar thermal hot water systems were considered the cheapest form of solar hot water heating in Australia. However, the hugely reduced cost of solar PV means this is no longer the case and the solar thermal system is expensive and inefficient.
Government Incentives Available
Currently there are both State and Federal Government rebates or incentives for installing heat pump hot water systems, which you are entitled to use together. These are:
Federal: Small-scale Technology Certificates (STCs) can be generated for solar hot water (most installers can claim STCs on your behalf) to reduce the cost of a system. You will receive more STCs for a more efficient hot water system.
NSW: The Energy Savings Scheme offers a rebate to upgrade your gas or electric resistance water heater (only via licensed installers). Up to 100% of the new system may be covered, with a minimum payment of $33. Learn More.
How much will you receive?
Unfortunately it’s not a simple amount paid to you and the system is quite complicated and not one you undertake yourself (the licensed installer does it on your behalf as they work with certificate trading schemes). How much you receive off your new heat pump system depends on a range of factors such as what you’re switching from and the efficiency of the new system you choose.
The NSW government rebate is roughly $850 more for replacing electric resistance hot water tanks than for gas systems (which we believe is back to front! They’re calculating that on the energy consumed, rather than emissions saved*). If switching from an electric resistance, you should be able to get roughly $1000 for the federal STCs generated and about $900 for the NSW ESS’s certificates generated.
How to claim the rebates
Research what type of hot water system you may want and potential products
Connect with one or more installers for a quote and to discuss the most suitable system for you. Confirm that they are licensed to claim the rebates for you. Our list below are able to claim the rebates.
The installer will organise the installation and rebate so you receive a reduced final bill.
Choosing Your Heat Pump
Below we have provided a guide of some reviewed options from the top to the lower end of the market. There is a huge range in price (anywhere between $1500 – $5500 before rebates). Typically the more expensive heat pumps are quieter, use less electricity, have better warranties and use more environmentally friendly refrigerants than their cheaper counterparts.
We encourage you to consider the following elements when making your choice:
If a model has a timer or wifi/wired control it will enable you to time when you heat your water so it can be run off your solar power. This is the optimal method to heat your water from an emissions and cost savings viewpoint.
For instance, the Reclaim Heat Pump has a hardwired option which you can connect to other smart devices to divert excess solar power to your hot water. Most options however use a simple timer so you can set it to run when you have cheap power or are likely to be exporting solar power.
Whether you choose a split or all-in-one tank may depend what room you have. The split system will have a separate larger compressor which heats water more quickly but takes up more space.
Look for a high coefficient of performance (COP) rating, indicating greater energy efficiency. The more efficient, the less energy used and therefore lower running costs
A resistive element, found in some heat pumps add the ability to reheat quickly (but use more power). It’s potentially useful for larger households looking for a smaller tank installation.
Some refrigerants are greenhouse gasses. CO2 and R290 refrigerants are good choices for the environment while R410a and R134a are being banned in various regions.
While the upfront cost of EVs can seem high at the moment, we encourage you to factor in the long-term savings when making your calculations. The average Australian household spends over $3000 every year just on fuel costs, compared with a few hundred dollars charging an EV (or free if you can charge it using your daytime solar).
The cost of EVs is also declining, especially if the federal government introduces more policies to support this market transition, such as fuel efficiency standards). This is a rapidly changing space, with new models coming online regularly.
Warranties are complex with different periods that cover for labor, tank and parts. Also note that the distance from an approved service agent may add to repair costs.
Some Heat Pumps can be noisy like a reverse air conditioner, so consider your neighbours and how close it maybe to any windows.
We encourage you to look for an Australian made product to support local manufacturing jobs and to ensure Australian Fair Trading can offer you protection in the consumer warranty.
Other things to note:
Hot water systems by law need to be on their own circuit breaker which may require an electrician to install a new RCD and wiring.
The listed brands in our comparison guide is not a complete list of brands to consider and we are not affiliated with any company.
There are other reputable companies that make good heat pumps which are well reviewed online. These include and not limited to Quantum, Rheem, Thermann, Enviroheat, iStore, Thermal Ark, Solahart, Dux, Stiebel Eltron, HydroTherm, Apricus, Rinnai, Eco Alliance. For more information and reviews we recommend searching the My Efficient Electric Home (MEEH) forum on facebook.
If you are losing the will to decide on a hot water system – ask us! – we can connect you with a local who has just decided on theirs and who can offer you guidance. Keep going – it will save you tonnes of money!
Heat Pump Comparison
Top range: Reclaim
Price: $$$
Control : Timer, Wifi and Hardwire option
Design: Seperate tank and controller
Efficiency: 5:1
Capacity (litres): 160, 250, 315, 400
Resistive Element: No
Refrigerant: CO2
Warranty: 4 Stars
Noise: 37 db
Notable Feature: Options to work with Solar PV, Australian and Japanese made
Top range: Sanden
Price: $$$$
Control : Timer, Wifi option
Design: Seperate tank
Efficiency: 5:1
Capacity (litres): 160, 250, 300, 315
Resistive Element: No
Refrigerant: CO2
Warranty: 4 Stars
Noise: 37 db
Notable Feature: Australian made tank, Japanese Compressor
Mid range: Aquatech
Price: $$$
Control : Timer and Wifi
Design: all in one
Efficiency: 4.25:1
Capacity (litres): 210
Resistive Element: Yes
Refrigerant: R290
Warranty: 3.5 Stars
Noise: 43 db
Notable Feature: Wifi with ap connectivity
Mid range: Evo Heat
Price: $$$
Control : Timer, Wifi optional
Design: All in one
Efficiency: 4.27:1
Capacity (litres): 270
Resistive Element: Yes
Refrigerant: R410a
Warranty: 3 Stars
Noise: 48 db
Notable Feature: Compact Unit, LED timer
Low range: Midea
Price: $
Control : Timer only
Design: All in one
Efficiency: 3.5:1
Capacity (litres): 170, 280
Resistive Element: Yes
Refrigerant: R134a
Warranty: 2 Stars
Noise: 48 db
Notable Feature: Low price
Non-heat pump: Electric resistive
Price: $$ (no rebates)
Control : Not included
Design: All in one
Efficiency: 1:1
Capacity (litres): All sizes
Resistive Element: Yes
Refrigerant: No compressor
Warranty: 2-5 Stars
Noise: 0 db
Notable Feature: Low price, simplicity
Comparison Table
Water heaters are a key weapon in our electrified future.
This new innovation of enabling your hot water pump to be app-enabled means you can REMOTELY time-shift when you will heat water.
No longer will you heat water (25% of your electricity bill and emissions) in the night. You can use an app to time shift your heating to when you have solar power in the day.
That way you’re paying nothing to heat your water – rather than paying25c per KWh and receiving back only 8c per KWh from the solar feed-in tariff. You are outsmarting your electricity company all for a product that costs only a couple of hundred dollars, is manufactured locally and is covered by an Australian Consumer Guarantee.
Are you a licensed plumber?
Local installers who can claim incentives
Same Day Hot Water
Products: Reclaim, Sanden, Evo Heat, Midea
Hot Water in a Hurry
Product: Sanden, Aquatech, Hydrotherm, EvoHeat and iStore
Hot Water Maintenance
Product: EVO270
Australian Licensed Hot Water
Product: Aquatech
SolarPro
Product: Rinnai Evacuated Tube, Rinnai Flat Plate, SolarEdge