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Install a heat pump system for hot water


If you are replacing an electric hot water system with a heat pump system then you will improve the energy efficiency of your hot water system by 40 - 80 per cent.

A well designed heat pump hot water system will reduce water heating electricity use by an amount comparable to a solar-electric hot water system. In colder climates, particular care must be taken with heat pump selection.

Heat pumps are an efficient system designed to extract heat from the air, water or ground to heat water. In the context of apartment buildings they would usually extract heat from the air.

If you can integrate a heat pump into the heating and cooling system for the building then this system becomes a more viable option. To do so is complex and you would need expert assistance.

Heat pumps are a good option if:

  • Limited roof access, lack of sunlight, poor orientation or shading prevents you from considering solar hot water systems
  • Access to natural gas is not available or fluing gas system exhausts is expensive or difficult

Heat pumps use much less energy than conventional electric hot water systems because they only use electricity to compress and pump refrigerant around the system, not to directly heat the water. When used in conjunction with a timer, and during off-peak hours, the running costs are even lower.

Location matters

Heat pumps work best in warm, humid climates. They are not practical in alpine regions and ground-source heat pumps should be considered instead: these draw heat from underground, where the temperature is stable all year. Heat pumps may require an electric booster in colder regions.

The electric boost turns on once the water temperature drops below a certain point. Efficiency also declines in colder conditions. Heat pumps emit a low humming sound, and some have fans that can add to the noise, so you’ll need to be able to locate your heat pump somewhere that it will not disturb residents and neighbours.

Heat pumps should not be placed in a space that has to be heated to provide comfort because they extract the heat and cool the surrounding air, so they would increase heating energy requirements. If you have an area with waste heat, such as a lift motor room, a heat pump can use this heat to create hot water whilst also providing the cooling required.

Integrated systems

These are a single unit and require fresh air and ventilation; so that heat can be absorbed and so that the evaporator can extract heat. These should be placed outdoors or in an indoor space with good air-flow, like a well ventilated garage. They are connected the same way as standard electric hot water tanks and can be installed by a qualified plumber.

Split systems

The tank and the heat pump are separated in this system. This is useful because the tank can be placed in a poorly ventilated space while the small evaporator unit can be placed outdoors or in a ventilated space In some models the condenser is also separated. Additional plumbing allows water from the tank to be pumped across the condenser and back. This is handy because the tank can be placed in enclosed spots or underneath a floor.

Two kinds of heat pump

  • Air-source heat pumps are the most common type - they absorb heat from the air and transfer it to heat your water
  • Electric heat pumps - electricity is used to pump a refrigerant around the system, which picks up heat from the air and then transfers it to the water

Find out more about heat pump hot water systems.


Heat pump hot water systems are similar in cost to or cheaper than a solar hot water sysem to purchase and install, but more expensive than an electric hot water system. Like a solar unit they are more energy efficient and will reduce your energy bills. They achieve similar energy savings to a solar hot water system, but provide savings more consistently across the year, as they do not rely on variable solar radiation.


Some heat pump and solar hot water systems are entitled to a number of small-scale technology certificates (STCs) under Australia’s Small-scale Renewable Energy Scheme.

What this means is your STCs can be assigned to a registered Agent (a retailer or installer) in exchange for a financial benefit, like a discount off your invoice. Remember that this is an immediate discount on your product – not a rebate that you can claim back later.