Hot water buying guide
In NSW, water heating is typically a household’s biggest source of carbon emissions accounting for around a quarter of a home’s energy use.
Your hot water system may not be an exciting conversation starter but it is one of the easiest ways to reduce your emissions and energy costs at home and will play a key role in our electric future.
The humble hero
While hot water is a big energy user, it is also one of the most flexible household loads on the grid meaning it can play a big role in a more efficient and clean energy landscape. Unlike an appliance like your stove which you use at a certain time, with a good electric heat pump you can choose when your system heats your water and consumes energy.
This control can benefit both your energy bills and the grid, as your hot water tank effectively acts as a large cheap home battery. You can store energy as hot water when electricity rates are lower, or if you have solar panels you can heat your water when you’re producing solar power, making free hot water with zero emissions.
When we consider all our hot water systems together, they become an important piece of technology to combat our domestic emissions. By using more efficient electric hot water systems, and using them smarter, we can create a cheaper and cleaner electricity grid for everyone.
Types of hot water systems
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Heat pumps (recommended)
Heat pumps transfer heat from the surrounding air to heat the water which makes them highly efficient, typically using up to 65-75% less energy compared to electric resistance heaters. They work best in moderate to warm climates like NSW. Generally they have a higher upfront cost. However, this is partially offset with government rebates and they can save you money in the long run through reduced energy consumption.
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Electric resistance heaters
Electric resistance heaters use electricity to heat an element like a large kettle. They are relatively inexpensive to purchase, install and service, however, they use roughly 3-4 times more electricity than a heat pump. If you have a good-sized solar PV system then a decent solution can be installing a timer or smart device to ensure your water heats during the day, rather than the typical overnight “off peak” setting.
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Gas water heaters
Gas systems use natural gas or LPG as a fuel source. They are relatively cheap to run however their emissions contribute to air pollution and fuel climate change which is why we do not support the installation of gas appliances. Gas water heaters also require venting and maintenance for safety as they are burning a combustible fuel.
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Solar thermal heaters
Not to be confused with solar PV panels, which generate electricity - for a long time solar thermal hot water systems were considered the cheapest form of solar hot water heating in Australia. However, the hugely reduced cost of solar PV means this is no longer the case. The solar thermal system is expensive and inefficient.
Government incentives available
In addition to subsidies available under the Electrify 2515 Community Pilot, there are both State and Federal Government rebates or incentives for installing heat pump hot water systems, which you are entitled to use together. These are:
Federal: Small-scale Technology Certificates (STCs) can be generated for solar hot water (most installers can claim STCs on your behalf) to reduce the cost of a system. You will receive more STCs for a more efficient hot water system.
NSW: The Energy Savings Scheme offers a rebate to upgrade your gas or electric resistance water heater (only via licensed installers). Up to 100% of the new system may be covered, with a minimum payment of $33. Learn more.
How much will you receive?
Unfortunately it’s not a simple amount paid to you and the system is quite complicated and not one you undertake yourself (the licensed installer does it on your behalf as they work with certificate trading schemes). How much you receive off your new heat pump system depends on a range of factors such as what you’re switching from and the efficiency of the new system you choose.
The NSW government rebate is roughly $850 more for replacing electric resistance hot water tanks than for gas systems (which we believe is back to front! They’re calculating that on the energy consumed, rather than emissions saved*). If switching from an electric resistance, you should be able to get roughly $1000 for the federal STCs generated and about $900 for the NSW ESS’s certificates generated.
How to claim the rebates:
Research what type of hot water system you may want and potential products
Connect with one or more installers for a quote and to discuss the most suitable system for you. Confirm that they are licensed to claim the rebates for you. Our list below are able to claim the rebates.
The installer will organise the installation and rebate so you receive a reduced final bill.
* Want to write to our local state MP Maryanne Stuart to say the NSW ESS system is opaque and should incentivise replacing gas instead of electric hot water systems? Contact her here
Heat pump comparison
In this section we compare some options on the market, from most to least expensive. There is a huge range in price (anywhere between $1500-$5500 before rebates). Typically the more expensive heat pumps are quieter, use less electricity, have better warranties, and use more environmentally friendly refrigerants than their cheaper counterparts.
This is not a complete list, and we are not affiliated with any company. There are other reputable companies that make good heat pumps which are well reviewed online. These include and are not limited to: Quantum, Rheem, Thermann, Enviroheat, iStore, Thermal Ark, Solahart, Dux, Stiebel Eltron, HydroTherm, Apricus, Rinnai, and Eco Alliance.
For more information and reviews we recommend visiting the My Efficient Electric Home forum on Facebook.
Note: Hot water systems by law need to be on their own circuit breaker which may require an electrician to install a new RCD and wiring.
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Reclaim
Price: $$$
Control: Timer, Wifi and Hardwire option
Design: Seperate tank and controller
Efficiency: 5:1
Capacity (litres): 160, 250, 315, 400
Resistive element: No
Refrigerant: CO2
Warranty: 4 Stars
Noise: 37 db
Notable features: Options to work with Solar PV. Australian and Japanese made.
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Sanden
Price: $$$$
Control: Timer, Wifi option
Design: Seperate tank
Efficiency: 5:1
Capacity (litres): 160, 250, 300, 315
Resistive element: No
Refrigerant: CO2
Warranty: 4 Stars
Noise: 37 db
Notable features: Australian made tank, Japanese Compressor
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Aquatech
Price: $$$
Control : Timer and Wifi
Design: All in one
Efficiency: 4.25:1
Capacity (litres): 210
Resistive element: Yes
Refrigerant: R290
Warranty: 3.5 Stars
Noise: 43 db
Notable features: Wifi with app connectivity
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Evo Heat
Price: $$$
Control : Timer, Wifi optional
Design: All in one
Efficiency: 4.27:1
Capacity (litres): 270
Resistive element: Yes
Refrigerant: R410a
Warranty: 3 Stars
Noise: 48 db
Notable features: Compact unit, LED timer.
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Midea
Price: $
Control : Timer only
Design: All in one
Efficiency: 3.5:1
Capacity (litres): 170, 280
Resistive element: Yes
Refrigerant: R134a
Warranty: 2 Stars
Noise: 48 db
Notable features: Low price
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Non-heat pump: Electric resistive
Price: $$ (no rebates)
Control : Not included
Design: All in one
Efficiency: 1:1
Capacity (litres): All sizes
Resistive element: Yes
Refrigerant: No compressor
Warranty: 2-5 Stars
Noise: 0 db
Notable features: Low price, simplicity.
Things to consider
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If a model has a timer or wifi/wired control it will enable you to time when you heat your water so it can be run off your solar power. This is the optimal method to heat your water from an emissions and cost savings viewpoint.
For instance, the Reclaim Heat Pump has a hardwired option which you can connect to other smart devices to divert excess solar power to your hot water. Most options however use a simple timer so you can set it to run when you have cheap power or are likely to be exporting solar power.
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Whether you choose a split or all-in-one tank may depend what room you have. The split system will have a separate larger compressor which heats water more quickly but takes up more space.
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Look for a high coefficient of performance (COP) rating, indicating greater energy efficiency. The more efficient, the less energy used and therefore lower running costs
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A resistive element, found in some heat pumps add the ability to reheat quickly (but use more power). It’s potentially useful for larger households looking for a smaller tank installation.
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Some refrigerants are greenhouse gasses. CO2 and R290 refrigerants are good choices for the environment while R410a and R134a are being banned in various regions.
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Warranties are complex with different periods that cover for labor, tank and parts. Also note that the distance from an approved service agent may add to repair costs.
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Some Heat Pumps can be noisy like a reverse air conditioner, so consider your neighbours and how close it maybe to any windows.
Local plumbers wanted!
Are you a licensed plumber that is able to offer state and federal rebates on heat pumps?
Our tradies are going to be the backbone of Australia’s energy transition! If you’re an Illawarra-based tradesperson, register with our partner Brighte to be part of the Pilot rollout.