Heat-pump water heaters

A heat-pump water heater uses heat from the surrounding air to heat water in a storage tank.

They work on the same principle as reverse-cycle air conditioners, by extracting heat from the air using a refrigerant gas that is then pressurised in a compressor. The pressurised refrigerant transfers the heat to the water in the storage tank (like a heat exchanger).

Suitable conditions for heat-pumps

The amount of heat transferred to the water in the storage tank depends on the surrounding air temperature.

Heat-pump water heaters are therefore generally better suited to warmer climates and are not well suited to cool climates – especially where frosts occur regularly.

In cooler climates, the compressor will run for longer periods, which can result in greater energy consumption and a shorter life expectancy for the pump.

A heat-pump water heater might be worth considering if a solar hot water system is not suitable for your household. For example when:

  • there is a lack of roof space for solar panels
  • your house is oriented poorly for solar panels
  • electricity is your main fuel choice.

Energy efficiency and running costs

A heat-pump water heater uses much less electricity than an electric storage water heater. This is because it only requires electricity to drive the compressor and the fan, instead of using electricity to heat the water directly, with an electric element.

Compare running costs of hot water systems

Government incentives

There are incentives available to Victorians replacing an existing hot water system with a heat-pump water heater:

  1. Small-scale Technology Certificates (STCs)
  2. Victorian Energy Efficiency Certificates (VEECs), also known as the Energy Saver Incentive.
  3. Solar hot water rebate

Each incentive has varying eligibility requirements, so talk to your hot water system supplier about what is available to you.


A man and a woman shopping for electrical goods

Smarter choice

Energy efficient appliances will save you money. The Smarter Choice retail program will help you make better choices when buying new appliances, hardware and lighting.

Read more