Short answer
Before rebates, a heat pump hot water system typically costs about $2,000 to $7,500 installed in Australia, depending on the model, size and job. The NSW Government gives $2,000 to $6,000 and the Victorian Government $2,500 to $7,500 (both checked November 2026). Federal STCs and state discounts can take a large share off that.
On this page
Heat pump prices vary more than most appliances, because the job varies: an integrated unit dropped into the spot of an old electric tank is a very different install from a split system replacing an indoor gas unit with new wiring. Here are the published ranges, what moves the price, and how to read a quote.
What does a heat pump cost to buy and install?
| Source | Range | What it covers |
|---|---|---|
| NSW Government | $2,000 to $6,000 | Installed cost, varying with size, model and installer |
| Victorian Government (VEU) | $2,500 to $7,500 | Installed cost of heat pump and electric-boosted solar water heaters, before incentives |
| ACT Government | About $5,500 | A high-quality heat pump installed (ACT guide, older price basis) |
| Federal regulation review (2026) | Generally $2,000 to $4,000 or more | What consumers reported paying, from 2024 market research |
| CHOICE comparison (May 2026) | $2,050 to $7,910 | Manufacturer advertised prices across 81 priced models; CHOICE doesn't say if installation is included |
In my count of the CHOICE listing, 65 of the 81 priced models were advertised between $3,000 and $6,500. Treat all of these as a sense check for a quote, not a price list.
How does that compare with gas or electric?
Heat pumps cost more upfront. The federal review says most consumers reported paying $1,000 to $2,000 for electric or gas water heaters, and that heat pump installed costs are "nearly 3 times that of" electric storage. Renew says heat pumps cost three to four times as much as resistive systems (Renew). The ACT guide compares about $5,500 for a quality heat pump with about $1,800 for a standard electric or gas system. The payoff is lower running costs: see running costs and is it worth it?
What makes a heat pump quote more expensive?
- Tank size and type. Bigger tanks and stainless steel tanks cost more. See the size guide.
- Split vs integrated. A split system has two units and connecting pipework.
- Electrical work. Replacing a gas unit may need a new circuit. In Victoria, a needed switchboard alteration is one of the listed exemptions to the 2027 gas rule, which tells you it can be a real cost.
- Moving the location for noise or airflow, which adds plumbing.
- Removing and disposing of the old system, and disconnecting gas.
- Cold-climate models designed to run without the element at low temperatures.
How much do rebates take off?
It depends heavily on your state:
- Everywhere: the federal STC discount, which depends on the model, your zone and the install year. See STCs explained.
- Victoria: VEU up to $560 (from gas) or $630 (from electric), plus a Solar Homes rebate up to $1,000 for eligible owner-occupiers. The government puts VEU plus Solar Homes at up to $1,560 for a gas replacement.
- NSW: Energy Savings Scheme discount up to $640 (from electric) or $330 (from gas), indicative.
- ACT: a 50% rebate up to $2,500 for eligible concession card holders, plus loans.
- SA: retailer discounts under REPS; amounts set by each retailer.
Full details on rebates by state.
How do I read a heat pump quote?
A good quote lists each of these on its own line:
- The exact model number (so you can check it on the Clean Energy Regulator register).
- Tank size and whether it is integrated or split.
- Supply price and installation price.
- Electrical work, gas disconnection and removal of the old unit.
- The number of STCs and the dollar value per STC.
- Each state discount by program name.
- The final price you pay.
- Warranty terms for the tank, the heat pump and the installation.
More on costs
- Running costsHeat pump hot water running costsWhat a heat pump hot water system costs to run each year compared with gas and electric storage, using published government figures and their assumptions.
- Solar and off-peak timingRunning a heat pump on solar, off-peak and free midday powerWhen to run a heat pump hot water system: with rooftop solar, on controlled load or off-peak tariffs, and in the free midday power windows of the Solar Sharer offer.
- Is it worth it?Is heat pump hot water worth it?When a heat pump hot water system pays for itself and when it doesn't, worked through with published cost and running cost figures.
- Heat pump vs gasHeat pump vs gas hot waterHeat pump hot water compared with gas storage and gas instantaneous (continuous flow) systems on running cost, upfront cost, emissions and practicality.
- Heat pump vs electricHeat pump vs electric storage hot waterHow a heat pump compares with a conventional electric storage or instantaneous electric hot water system on energy use, cost and tariffs.
- Heat pump vs solarHeat pump vs solar hot waterHeat pump compared with rooftop solar thermal hot water: roof space, climate, boosting, cost, rebates and how rooftop PV changes the answer.
Sources for this page
- Heat pump water heaters, NSW Government (energy.nsw.gov.au). Last checked: November 2026.
- Hot water buyers guide (Victorian Energy Upgrades), Victorian Government (energy.vic.gov.au). Last checked: November 2026.
- Singing in the shower: a guide to hot water heat pumps, ACT Government (Climate Choices). Last checked: November 2026.
- Decision Regulation Impact Statement: energy efficiency policy options for heat pump water heaters (April 2026), Energy Rating (Australian Government). Last checked: November 2026.
- Heat pump hot water systems: compare (manufacturer-stated data, updated 8 May 2026), CHOICE (non-profit). Last checked: November 2026.
- Heat pump hot water systems, Renew (non-profit). Last checked: November 2026.
Every source used on the site is listed on the sources page.