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Heat Pump Hot Water Systems

What is a heat pump hot water system?

Heat pump hot water systems are much more efficient than standard electric water heaters. They work by ‘pumping’ heat from one medium to another. An example of a heat pump you may be familiar with are Air conditioners and refrigerators. 

A heat pump hot water system includes a heat pump unit and a storage tank. The heat pump extracts heat from the air and pumps it into the water storage tank. Depending on the type of heat pump hot water system installed, energy reductions of almost 80 per cent can be achieved compared to standard electric storage water heaters. 

Standard electric storage water heaters use a heating element inside the tank to heat the water and when powered using electricity from the grid, they are responsible for the most greenhouse gases of any water heater.  This is why they are being phased out for household use.


How can I upgrade my system, save money upfront and long term?

Hot Water Rebate – Solar Victoria Program

You can get a hot water rebate of up to $1,000 on the installation of a solar or heat pump hot water system, if you meet the eligibility criteria.

The hot water rebate applies to installations that replace an existing hot water system that was at least three years old (from the date of purchase) and it’s not available to new build homes.

The Solar Homes Program is supporting eligible Victorian households to save even more. Eligible households can receive both a solar panel (PV) rebate and a hot water rebate to make the most of their solar energy.

The Victorian Government’s Energy Saver website provides householders with more information about other incentive schemes.

Small-scale Technology Certificates (STCs)

Your new system is also eligible for Small-scale Technology Certificates (STCs). This is effectively a payment made to purchasers of small renewable energy systems for the value of the emissions reduction they create. The quoted price of the system from your installer will have the STC discount included in the final price.

Victorian Energy Efficiency Certificates (VEECs)

Victorian Energy Efficiency Certificates (VEECs) are electronic certificates created when certain energy efficient activities are undertaken. Each certificate represents one tonne of greenhouse gas emissions reduction (CO2-e). The number of certificates generated is based on the greenhouse gas savings that are associated with the product or service. The level of incentive or discount received by households and businesses varies depending on the market activity and certificate price. More information about VEECs can be found at

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