Heat pump hot water
Water heating is the second-largest energy use in most Australian homes. A heat pump does the same job on roughly a third of the electricity.
It is the second-largest energy use in the house.
Water heating accounts for somewhere between 15% and 27% of household energy use in Australia, depending on where and how you live. Roughly 45% of Australian homes heat water with gas and another 45% with an electric element; only about one in ten uses solar or a heat pump. That matters because the technology gap here is unusually wide — a heat pump uses around 30% of the energy of a conventional electric storage tank to deliver the same hot water.
It is a fridge running backwards.
A heat pump does not make heat, it moves it. A refrigerant circuit pulls warmth out of the surrounding air and concentrates it into the tank, which is why it can deliver several units of heat for each unit of electricity while an element delivers exactly one. Cold-climate models are rated to keep working well below zero and carry a booster element for the coldest mornings, which is the question most Canberra households ask first.
What it costs to run.
For a typical four-person household, gas or conventional electric storage runs at roughly $800–$1,200 a year. A heat pump on a flat electricity tariff costs about $280–$400. Move it to off-peak and that falls to around $150–$250; time it to run in the middle of the day on rooftop solar and it can be $50–$100. Most homes save somewhere between $400 and $900 a year, and over ten years the gap against gas storage is commonly $5,000–$8,000 even after the higher purchase price.
Compare what it costs to run
Running cost, per year
What hot water costs you now, and what it could cost
Also carries a daily gas supply charge
An element: one unit in, one unit out
Moves heat rather than making it
Published comparison figures for a typical four-person household, scaled by household size. Your own cost depends on the tank, the tariff and how much hot water you use. ACT Home Energy Support
What the schemes contribute.
ACT Home Energy Support pays 50% of the total supply and installation cost, capped at $2,500, within a $5,000 cap across all measures per household. It is means-tested: a Pensioner Concession, DVA Gold or Health Care card, owning and occupying the home, an unimproved value at or below $750,000, and a free online workshop first. The model has to appear on the Victorian Energy Upgrades register, which the ACT uses as its approved-product list. Separately, federal small-scale technology certificates take roughly $300–$700 off the price depending on the system's efficiency, tank size and postcode zone — usually applied as a discount by the installer rather than claimed by you. The ACT Government's own indicative figures put the post-rebate cost at $1,251–$2,221 and annual savings at $284–$678.
How to go about it
- Check the product registerHome Energy Support only covers models listed on the Victorian Energy Upgrades register. Ask the supplier to confirm the exact model is on it before you commit.
- Do the workshopThe free online workshop is a condition of the rebate, not a formality. Complete it before you apply, on 1300 141 777 or homeenergysupport@act.gov.au.
- Size it for the householdTank size is driven by how many people live there and when they shower. Undersizing is the most common regret: a heat pump recovers more slowly than an element, so the tank has to carry the morning.
- Put it on a timerThe single biggest lever on running cost is when it heats. Set it for the middle of the day if you have solar, or overnight off-peak if you do not.
Frequently asked questions
Cold-climate models are designed to operate well below zero, with automatic defrost cycles and a booster element for the coldest mornings. Efficiency does fall as the air gets colder — that is physics, not a fault — which is why sizing and timing matter more here than in a warmer city.
There is a compressor, so there is some noise, comparable to an outdoor air conditioning unit. Where the unit goes matters: against a bedroom wall or a neighbour's boundary is worth avoiding. Ask the installer for the model's rated sound level and where they intend to put it.
On solar if you have it. Running the heat pump in the middle of the day uses generation you would otherwise export for a small feed-in tariff, which is why that scenario lands at $50–$100 a year rather than $280–$400. Without solar, off-peak overnight is the next best.
If hot water is the last gas appliance in the house, removing it lets you disconnect gas entirely and stop paying the daily supply charge — often a larger saving than the energy itself. If you still cook with gas or have gas heating, the connection and its supply charge stay.
The ACT rebate is not available, but federal certificates still reduce the price for everyone, and the Sustainable Household Scheme lends at 3% over up to ten years — up to $20,000 for new applicants from 1 July 2026.
Talk to someone about switching
Book a home assessment
An accredited assessor will look at what is in the ceiling now and confirm what the upgrade needs.
Related guides
- Energy efficiencyTwo programs
Ceiling insulation upgrade
Eligible ActewAGL customers can get up to $2,000 off the installation price plus a $600 bill credit paid at $50 a quarter. A separate ACT rebate covers half the cost up to $2,500. Both are means-tested, and they ask for different things.
- Rebates and bill savingsDeclining rebate
Solar and battery rebates
The Cheaper Home Batteries Program takes around 30% off a battery's upfront cost, at full value on the first 14kWh. The rate declines every six months from 1 May 2026, so when you install changes what it is worth.
- Energy efficiencyDo it yourself
Cutting a Canberra winter heating bill
Air leaks account for up to 25% of heat loss, and in an older brick-veneer home draught infiltration can be 20–30% of total heating energy. Most of the fixes cost very little.
