Heat pump hot water, explained for Australians

A heat pump hot water system heats water by pulling warmth out of the outside air, using roughly a third of the electricity of a standard electric tank. This guide covers what they cost, the rebates in your state, how they cope with winter, and the rules changing in Victoria from 1 March 2027.

Independent. Written by Daniel Kilkelly, who researches the official sources and is not an installer. Facts last checked: November 2026.

How a heat pump water heater worksCool outside air flows into the fan of a heat pump sitting on top of a water tank. The heat passes into the water tank, so the water is warm at the top and cooler at the bottom.Outside airHeat passes intothe water tank
  • About a thirdof the electricity of a standard electric tank
  • 3 to 5Typical COP of a heat pump, according to Your Home
  • up to $1,960Combined VEU and Solar Homes saving for a heat pump replacing gas in Victoria, with a locally made product
  • 2030The federal STC scheme ends on 31 December 2030

Where should you start?

1March2027

Victoria's 2027 gas hot water rule

What changes from 1 March 2027 when a gas hot water system fails, and what it means for owners, renters and landlords.

The Australian guide to heat pump hot water

Rebates by state

Every government discount for heat pump hot water, state by state, with the official source for each figure.

Victoria's 2027 gas hot water rule

What changes from 1 March 2027 when a gas hot water system fails, and what it means for owners, renters and landlords.

How heat pumps work

COP, cold weather, noise, tank sizes and the difference between all-in-one and split systems.

Costs and comparisons

What a heat pump costs to buy, install and run, and how it compares with gas, electric storage and solar.

Buying guide

What to look for, rebate-eligible product lists, a factual brand overview and an installer checklist.

City guides

Climate, tariffs and rebates for heat pump hot water in each capital city.

Heat pump hot water city guides

Climate, tariffs and rebates for heat pump hot water in each capital city. Coldest month mean minimum, from the Bureau of Meteorology.

Why is everyone talking about heat pumps?

Three things are pushing Australians towards heat pump hot water. Federal certificates and state programs take a real chunk off the price. Victoria will require a failed gas hot water system to be replaced with an electric one from 1 March 2027. And homes with rooftop solar can heat a day's water with power they would otherwise export for very little.

Heating water is one of the biggest energy uses in an Australian home, so the system you choose shows up on every bill for the next decade or more. Heat Pump Hot Water Guide pulls the official figures together so you can check a quote against the facts, not a sales pitch.

How is this guide different?

Every rebate amount, eligibility rule and date comes from the official program page and is linked where it is used. Nothing here is sponsored, there are no affiliate links, and no product has been "tested" by me. When something could not be confirmed, it was left out. See the editorial policy and the full source list.

  • Nothing here is sponsored
  • No affiliate links
  • Facts last checked: November 2026