Who doesn’t love a hot shower? But did you know that hot water heating accounts for around 21 per cent of the total energy bill for most Australian homes?

That’s a big chunk of your power bill.  Fortunately, there’s a way to reduce it – and even get $0 hot water for your home.

The answer is a hot water heat pump system.  Heat pumps are the most efficient way to heat hot water for Australian homes.  They are also the most cost-effective hot water heating method.

Lowest running costs

With typical running costs of less than $200 a year, hot water heat pumps are the cheapest way of heating hot water in Australia. Compared with conventional electrical style hot water systems, they are around 4.5 times cheaper to run. When compared to gas hot water, the running costs are at least half.

Because heat pumps are environmentally friendly and super-efficient, they qualify for generous government rebates making them affordable for most Australian homes.

Heat pumps also combine perfectly with solar panels. Pair a hot water heat pump system with your rooftop solar system and you can get $0 hot water for some, if not all, of the year!

What you’ll learn in this post

This article provides a brief explanation of how hot water heat pump systems work.  It also describes the benefits of hot water heat pumps versus conventional electric and gas hot water systems.

Get in touch if you’d like free expert advice on heat pumps and a quote.

How does a hot water heat pump work?

A heat pump hot water system comprises of a heat pump unit and a storage tank.  The heat pump extracts ambient heat from the surrounding air and sends that heat – by pumping it – into the water in the storage tank.

Heat pumps concentrate heat, rather than creating it. They are highly energy efficient, generating around 3 to 4 times more energy than they consume.

Heat pump hot water systems work in all temperature zones across Australia.  Even in the coldest climates, a quality heat pump will generate all the hot water that a typical family home will need.

Pick the right model, and you’ll find that the noise level from the pump is no louder than a modern electric fan, i.e., around 37-40 decibels.

Heat pumps can heat hot water quickly. Depending on the model some units can heat 50 litres within 15 minutes.

Talk to us to get a heat pump hot water system that’s correctly sized for your household, and you’ll have guaranteed hot water all year round.

Benefits of a hot water heat pump v. conventional electric hot water

Conventional electric hot water systems have traditionally been one of the cheapest hot water systems to buy. But these days, they are by far the most expensive hot water system to run.

Both federal and state governments in Australia are trying to phase out old-style electric hot water systems by offering attractive rebates for more energy efficient alternatives, such as heat pumps.

The main benefits of a hot water heat pump compared to an old-style electric hot water system are:

Cheaper to run

A resistive electric hot water system costs the average Australian home $820 a year to run.  In comparison, hot water heat pump costs around $185 a year to run.

The difference is a saving of $635 a year, making a hot water heat pump around 80 per cent cheaper to operate than an electric resistive system.

Source: Sustainability Victoria’s Hot Water Running Costs

Lifetime cost comparison

Heat pumps have a lifespan of around 15 years. With annual running costs of $185 a year, over 15 years your heat pump will cost around $2,775 to run.

An older style electric hot water system will cost you around $12,300 in running costs over a 15-year period (assuming it lasts that long).  That’s $9,525 more than a heat pump.

$0 running costs with solar

Power your heat pump with electricity from your solar panels and reduce your annual hot water bill even further. Set the timer on your hot water heat pump so it heats the water during solar-producing hours using your free solar electricity.  It’s the smart way to use your excess solar power; a lot better financially than exporting it to the grid!

300% more efficient

A hot water heat pump is at least 300% efficient at converting electricity to hot water.  In contrast electric-resistive hot water systems have an efficiency of less than 100%.

More environmentally friendly

Traditional electric hot water systems release 4.75 tonnes of greenhouse gases annually, making them the worst CO2 polluter out of all the hot water systems.  In contrast, heat pumps release only 1.6 tonnes of greenhouse gases annually.

Federal government rebates

Federal government rebates – in the form of Small-scale Technology Certificates (STCs) – are available for approved hot water heat pump systems.  They are worth between $800 and $1,040 depending on where you live in Australia.

Conventional electric hot water systems don’t qualify for STCs.

State government rebates

States such as Victoria have rebates and financial incentives for switching from an old electric hot water system to a hot water heat pump.

In Victoria, the value of this rebate – available under the Victorian Energy Upgrades scheme – is worth between $1,500 and $1,600 and is on top of the federal government rebate.

Add the state and federal rebates together and the total financial incentive for Victorians to switch off old electric to heat pump hot water system is between $2,580 and $2,720.

Get in touch to find out whether there are additional state-level incentives for heat pumps in your part of Australia.

Benefits of a hot water heat pump v. gas hot water

Gas water heaters make up approximately 48 per cent of water heaters in Australia. They use either natural gas or LPG to heat water.

The two main types of gas water heaters are:

• gas storage water heaters
• instantaneous or continuous flow gas water heaters

The main benefits of a hot water heat pump compared to an old-style electric hot water system are:

Lower running costs

Heat pump hot water systems are around 50 per cent cheaper to run than gas hot water systems. The lower running costs of a heat pump can save the average homeowner up to $225 per year and an average of $3,375 over the 15-year lifetime, when compared to a gas hot water system.

Source: Sustainability Victoria’s Hot Water Running Costs

$0 hot water with solar

Heat pump hot water systems can be set to run off free electricity from your solar panels.  Gas hot water systems, on the other hand, can only run off gas. With gas prices expected to rise in coming years, gas hot water heating will become increasingly expensive.

Source: Sustainability Victoria’s Hot Water Running Costs

Last longer

Gas-powered hot water tanks usually breakdown after 8-10 years whereas hot water heaters have a useful life of around 15 years.

Safer

With heat pumps, you don’t need to worry about house fires or filling your home with dangerous fumes, unlike some gas hot water heaters.

Cleaner and greener

The greenhouse gas emissions from gas hot water systems and hot water heat pumps are virtually the same at around 1.6 tonnes per year.  However, gas is inherently more environmentally damaging, given that in Australia it is mostly extracted through hydraulic fracturing, or “fracking” which can poison groundwater and threaten wildlife.

Heat pumps are a better environmental choice, particularly when teamed with solar panels.

Government rebates

Hot water heat pumps qualify for the Federal Government rebate known as Small-scale Technology Certificates (STCs) which are worth between $800 and $1,040 depending on where you live in Australia. Gas hot water systems do not qualify for the STC rebate.

Interested in a heat pump quote?

Get in touch if you’d like advice or a quote for switching over to a hot water heat pump system.  It’s a great way to save on your power bills and help the environment at the same time.