Heat pump hot water in Queensland, and whether it is worth it

What a heat pump actually is

It is a fridge running backwards.

A conventional electric tank makes heat by pushing current through an element, the same way a kettle does. Every unit of electricity gives you one unit of heat, and that is the ceiling.

A heat pump does not make heat, it moves it. A fan pulls in outside air, a refrigeration circuit strips the warmth out of it and pumps that into the water. Because it is shifting heat that is already there rather than creating it, one unit of electricity delivers somewhere around three units of heat.

That is the entire argument, and everything else on this page follows from it.

The running cost

A heat pump uses roughly a third of the electricity of a resistive electric tank for the same hot water. On a typical household that is the difference between hot water being your biggest line item and it being a minor one.

As market figures, a heat pump on grid electricity generally runs somewhere around $200 to $350 a year. If you have solar and the system is set to heat in the middle of the day off your own generation, that can fall to $50 to $100 a year, because you are largely heating water with electricity you were about to export for a few cents.

These are market ranges, not a quote. Your actual figure depends on your tariff, your household size and your habits.

That solar interaction is the part worth dwelling on. A heat pump paired with solar and a timer is one of the most effective things you can do with surplus generation, and it is considerably cheaper than a battery for the same effect on your bill. It does one job only, where a battery does many, but for that one job it is very hard to beat on money spent.

The rebate, and the reason not to sit on it

Heat pumps earn small scale technology certificates, the same mechanism behind solar and battery rebates. Your installer claims them and the value comes off the price up front rather than arriving later as cash.

As a market range the discount generally lands somewhere around $800 to $1,200 for a typical household unit, though it varies with the model and the climate zone, and some models earn considerably more or less than others.

🔑 Here is the part that matters for timing. The number of certificates a system earns is based on a deeming period, which is the number of years left in the scheme. That period drops by one year every 1 January. So the same system installed in January is worth less than it was in December, every single year, automatically.

It is not a sales tactic, it is arithmetic built into the scheme. It does mean that if you are replacing a hot water system anyway and the decision is already made, the end of a calendar year is a genuinely better time to do it than the start of the next one.

Queensland suits these better than most of the country

A heat pump pulls warmth out of the air, so the warmer the air, the better it works. That makes our climate close to ideal.

In colder parts of the country heat pumps have to work considerably harder through winter, and some models switch to an electric element to cope, which throws away the whole efficiency advantage on exactly the days you need it. On the Sunshine Coast that is a much smaller concern. Even a cold morning here is mild by the standards these units are designed around.

Worth checking anyway: ask what the unit does at low ambient temperatures and whether it has a backup element that engages. If you are in the hinterland where it genuinely gets cold, that answer matters more than it does at the coast.

The noise, and where it can actually go

This is the complaint I hear most, and it is almost always a siting problem rather than a product problem.

A heat pump has a fan and a compressor. It is not loud in absolute terms, broadly comparable to an outdoor air conditioning unit, but it runs for hours at a time and it often runs when the house is quiet. An old electric tank makes no noise at all, so people are comparing against silence.

The mistake is putting it on the wall outside a bedroom window, or in a narrow side passage between two houses where the sound bounces off both walls and lands in the neighbour's bedroom.

It also needs airflow. Boxing one into a tight alcove or a cupboard starves it of the air it is trying to take heat from, which makes it work harder, run longer and last less well.

None of this is a reason not to fit one. It is a reason to decide where it goes before it is ordered rather than on installation day, which is the same conversation we have about batteries and for the same reasons.

Where the electrician ends and the plumber begins

Worth being straight about this, because it catches people out on quotes.

A hot water changeover is usually two trades. The plumber handles the tank, the water connections and the tempering valve. We handle the electrical side: the circuit, the isolator, the protection, the connection and the tariff arrangement.

So if you are collecting quotes, make sure you know which half you are being quoted for. A price that looks noticeably cheaper than the others sometimes turns out to be one trade only.

The tariff part is worth asking about specifically. Many older electric tanks in Queensland are wired to a controlled load tariff that only energises overnight. That made sense when the cheap electricity was at 2am. If you have solar, it often makes much more sense to heat in the middle of the day from your own generation instead, and that is a wiring and control change, not just a new appliance. It is the sort of thing that gets missed when the old tank fails on a Saturday and everyone is in a hurry.

The alternative almost nobody offers you

If you already have solar and your existing electric tank is in good health, there is a cheaper option that rarely gets mentioned, because it does not involve selling you an appliance.

Put your existing tank on a timer and heat it in the middle of the day. You keep the tank you have, you use your own surplus solar instead of exporting it for a few cents, and the cost is a fraction of a new system. It does not touch a heat pump for raw efficiency, because you are still turning one unit of electricity into one unit of heat, but you are doing it with electricity that was nearly free to you.

That is genuinely the right answer for some households, and we will say so. It is worth knowing about before you spend thousands, and more detail is on our hot water electrical page.

Where a heat pump wins decisively is when the old tank is at the end of its life anyway, or when you have no solar, or when your hot water use is high enough that a third of the running cost is real money every quarter.

Who it suits, and who it does not

It suits you if your electric tank is old and due for replacement anyway, if hot water is a visible share of your bill, if you have somewhere sensible to put the unit with real airflow and away from bedroom windows, and especially if you have solar and can heat during the day.

It suits you less if your tank is nearly new and healthy, because replacing a working system rarely pays back on running cost alone. Less again if the only realistic location is a narrow side passage against a neighbour's bedroom, and less if you are in a cold pocket of the hinterland and the model you are offered leans on an electric element through winter.

If you are on gas, the sums change considerably and are worth doing properly rather than assuming. Gas hot water typically costs more to run than a heat pump, but going from gas to electric can also mean losing a gas connection you are paying a daily supply charge for, which is money back on top.

Either way, get the model name, the rebate as its own line and the assumed install date in writing, and ask both trades what is in their half. That advice holds whoever you buy from, and at a paid visit if one is needed we will tell you honestly which of the three options above your house actually wants.

Common questions