Short answer

An integrated (all-in-one) heat pump has the compressor and fan sitting on top of the tank, so it is a simple swap for an old electric tank. A split system puts the compressor, fan and evaporator in a separate outdoor unit joined by pipes to the tank, usually up to 10 to 15 metres away. Splits give more freedom over noise, cold and space; integrated units are simpler to install.

On this page
  1. What is an integrated (all-in-one) heat pump?
  2. What is a split heat pump?
  3. Which is better for my home?
  4. Does a split system need a different installer?
  5. When does a split system make sense?
  6. When does an integrated unit make sense?
  7. Which brands make which type?
  8. Sources for this page

Most heat pumps sold in Australia are one of these two layouts. The choice affects where the unit can go, how noisy it is near the house, how it copes with cold, and who you need to install it.

Integrated and split heat pump layoutsLeft: an integrated unit with the heat pump sitting on top of the tank as one appliance. Right: a split system with a separate outdoor heat pump unit joined by pipes to a tank that can sit up to several metres away.All-in-one (integrated)heat pumptankSplit systemoutdoor unittankconnecting pipes
Integrated units are one appliance. Split systems separate the noisy, air-handling part from the tank, which gives more freedom over where each goes.

What is an integrated (all-in-one) heat pump?

Your Home describes it simply: "In an integrated system, the heat pump is fixed to the hot water storage tank." (Your Home) It is one appliance with one footprint, which is why it is the common choice when replacing an outdoor electric storage tank in the same spot.

What is a split heat pump?

In a split system, "the main heat pump components (compressor, evaporator and fan) are included in an outdoor unit", and "the distance between the two units is usually limited to 10 to 15 metres" (Your Home). Your Home adds that some heat pumps can be retrofitted to an existing tank, and the tank can go inside while the outdoor unit stays outside. Rheem, for example, says its split tank can be installed up to 5 metres away or indoors such as in a garage (see the brand overview).

Which is better for my home?

Integrated and split heat pumps compared
Integrated (all-in-one)Split system
InstallationOne unit; a simple swap for an outdoor electric tankTwo units plus connecting pipework; more work
SpaceNeeds open air around the whole unitTank can go indoors or in a tight spot; outdoor unit where there is airflow
NoiseNoisy part sits high on the tank, so sound can carry over fences (Your Home)Outdoor unit sits low, which helps reduce noise issues (Your Home)
Cold climatesTank sits outside in the coldTank inside reduces heat loss in colder climates (Renew); outdoor unit can go in a warmer spot (Your Home)
Licensing (Victoria)Water supply accreditation for a self-contained unitIf there is refrigerant pipework, also refrigeration accreditation

Does a split system need a different installer?

It can. Victoria's Building and Plumbing Commission says that if a heat pump installation "requires connection of refrigerant pipework", the plumber needs to be accredited in water supply and in refrigerated air conditioning (or the restricted class for split system heat pump water heaters). Unaccredited work carries a maximum penalty of 500 penalty units, about $94,000 (BPC). Some split systems circulate water rather than refrigerant between the units. Ask your installer which kind you are getting and what licence it needs.

When does a split system make sense?

  • The old tank is indoors, in a laundry or garage, and you want to keep the tank there.
  • The only outdoor spot is near a bedroom, and a low outdoor unit further away would be quieter.
  • You live somewhere cold and want the tank out of the weather.
  • Space beside the house is too tight for a full integrated unit with airflow around it.

When does an integrated unit make sense?

  • You are replacing an outdoor electric storage tank and the spot has good airflow.
  • You want the simplest install with the fewest parts.
  • The unit will sit away from bedrooms and neighbours' windows.

Which brands make which type?

From the manufacturers' own sites: Sanden sells a split system; Reclaim Energy, Rheem, Rinnai, Thermann and Emerald sell both split and integrated models; and Apricus, Chromagen, Dux, Evoheat, iStore, Quantum and Stiebel Eltron list integrated units. Details are in the brand overview. Sizes are covered in the size guide.

Sources for this page

  1. Hot water systems, Your Home (Australian Government, DCCEEW). Last checked: November 2026.
  2. Heat pump hot water systems, Renew (non-profit). Last checked: November 2026.
  3. Heat pump installations (industry update), Building and Plumbing Commission (Victoria). Last checked: November 2026.

Every source used on the site is listed on the sources page.