Heat pump hot water guide: rebates, running costs and choosing one
A heat pump is the cheapest way to heat water in most Sydney homes. It works like a reverse air conditioner, pulling warmth from the air into the water, and uses far less electricity than a standard electric tank. This guide covers how they work, whether one suits your home, the NSW and federal rebates, and what to look for. It's written by the local plumbers who install heat pumps every week across Matraville, Maroubra, Malabar, Botany and the southern Eastern Suburbs.
How a heat pump works
A fan draws air over a coil filled with refrigerant. The refrigerant soaks up the warmth from the air, a compressor concentrates it, and that heat is passed into the water in the tank. Because it moves heat rather than making it, a heat pump uses a fraction of the electricity an element-heated tank needs for the same hot water.
Is a heat pump right for your home?
Good fit
You have an electric storage tank now, there's outdoor space with airflow, and you plan to stay in the home a few years. Even better with rooftop solar, because you can run it in the middle of the day.
Think it through
The only spot is right beside a bedroom window (there's a quiet fan noise), the unit would sit in a tight enclosed space, or you're on mains gas and happy with your gas running costs.
Rebates in NSW
Two schemes can bring the upfront cost down when you replace an existing electric or gas hot water system with an eligible heat pump:
- NSW Energy Savings Scheme (ESS): a discount for replacing an electric or gas system with an approved heat pump. It's claimed through an accredited certificate provider, and the model must be on the scheme's approved list.
- Federal small-scale technology certificates (STCs): available for eligible heat pumps across Australia, and they can be combined with the NSW discount.
The amount depends on the model, your location and current certificate values, and it changes over time. Check the model is eligible before you buy. We'll talk you through how the rebates work for your home when we quote.
What to look for in a heat pump
- Tank size: matched to how many people live in the home (see the sizing table in our hot water system guide).
- All-in-one or split: all-in-one units have the heat pump on top of the tank and are simplest to fit. Split systems put the fan unit separately, which helps in tight side passages.
- Noise: check the decibel rating if the unit will be near a bedroom or a neighbour's window.
- Refrigerant and cold-weather performance: newer natural refrigerants heat well even on cold mornings.
- Timer or solar mode: lets the unit run when your solar panels are producing or on a cheaper tariff.
- Warranty: compare the tank warranty and the heat pump (compressor) warranty separately.
Heat pumps in southern Eastern Suburbs homes
Most homes in Matraville, Maroubra, Malabar, Pagewood and Botany have the hot water system in a narrow side passage or a laundry. A heat pump needs airflow, so a laundry install usually means moving it outside. Near the beach, salt air is hard on outdoor units, so a good spot and a model with a sound outdoor warranty matter. We check the space, power supply and drainage before you decide, and every install comes with compliance paperwork.
Looking after a heat pump
- Keep plants, bins and clutter clear of the fan so it can breathe.
- Check the condensate drain isn't blocked; heat pumps drip water as they run.
- Lift the relief valve lever gently every six months, and have the valve replaced about every five years.
Why locals call us for heat pumps
- Based in Matraville, close to every southern Eastern Suburbs home
- 100+ five-star Google reviews
- We install all the major brands, so you get the right unit, not the one we have to sell
- A fixed price before any work starts
- Lifetime labour warranty on our workmanship
Common questions
How much cheaper is a heat pump to run?
A heat pump typically uses a fraction of the electricity of a standard electric storage tank for the same amount of hot water. The exact saving depends on your household and tariff.
Are heat pumps noisy?
They make a quiet fan hum, similar to an air conditioner's outdoor unit. Placing it away from bedroom windows avoids most problems.
Can I get a rebate on a heat pump in NSW?
Usually, yes, if you're replacing an existing electric or gas system with an approved model. The NSW Energy Savings Scheme and federal STCs can both reduce the upfront cost.
Do heat pumps work in winter?
Yes. Sydney winters are mild, and modern heat pumps keep heating water on cold mornings. Some models perform better in the cold than others, which we'll explain when we quote.
Thinking about a heat pump? See our heat pump hot water and hot water replacement services, or your local page: hot water Matraville, Maroubra, Malabar, Pagewood, Eastgardens, Botany and Little Bay. More plumbing guides.