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Heat Pump Hot Water Costs

A heat pump hot water system costs $3,800 to $5,200 installed for a 270 to 315 litre tank, less $380 to $646 in federal STCs and any state certificates (as at October 2026).

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2026 prices, installed. Actual costs vary by location.

Heat pump costs by size

Bigger tanks cost more. Most families of three or four land in the 270 to 315L range.

  • 150L

    Suits
    1 to 2 people
    Full price
    $2,800 to $3,800
    Federal STCs
    Depends on model
    After STCs
    On the quote
    Popular brands
    Reclaim, Sanden Eco

  • 215 to 250L

    Suits
    2 to 3 people
    Full price
    $3,200 to $4,500
    Federal STCs
    Depends on model
    After STCs
    On the quote
    Popular brands
    Reclaim, iStore, Stiebel

  • 270 to 315LMost popular

    Suits
    3 to 4 people
    Full price
    $3,800 to $5,200
    Federal STCs
    $380 to $646
    After STCs
    $3,154 to $4,820
    Popular brands
    Reclaim, iStore, Sanden

  • 400L+

    Suits
    5+ people
    Full price
    $4,500 to $6,500
    Federal STCs
    Depends on model
    After STCs
    On the quote
    Popular brands
    Sanden Eco Plus, Reclaim

STCs: 10 to 17 certificates on 250 to 315 litre heat pumps on the Clean Energy Regulator register, Zones 1 to 4, installed this year. Your model and zone set the exact count. Rebate figures as at October 2026, at $38 a certificate. Sources checked October 2026.

Popular brand prices

  • Reclaim Energy

    Size
    270L
    Full price
    $3,800 to $4,500
    After STCs
    $3,154 to $4,120
    Warranty (parts / tank)
    6yr / 15yr
    Origin
    Australia

  • Sanden Eco

    Size
    315L
    Full price
    $4,200 to $5,000
    After STCs
    $3,554 to $4,620
    Warranty (parts / tank)
    6yr / 15yr
    Origin
    Japan

  • Hydrotherm Dynamic X8

    Size
    280L
    Full price
    $3,800 to $4,500
    After STCs
    $3,154 to $4,120
    Warranty (parts / tank)
    6yr / 6yr
    Origin
    Australia

  • EvoHeat DHWS

    Size
    270L
    Full price
    $3,200 to $3,900
    After STCs
    $2,554 to $3,520
    Warranty (parts / tank)
    5yr / 5yr
    Origin
    Australia

  • iStore

    Size
    270L
    Full price
    $3,500 to $4,200
    After STCs
    $2,854 to $3,820
    Warranty (parts / tank)
    5yr / 5yr
    Origin
    Australia

  • Stiebel Eltron

    Size
    302L
    Full price
    $4,000 to $4,800
    After STCs
    $3,354 to $4,420
    Warranty (parts / tank)
    5yr / 10yr
    Origin
    Germany

  • Rheem Ambiheat

    Size
    270L
    Full price
    $3,200 to $3,900
    After STCs
    $2,554 to $3,520
    Warranty (parts / tank)
    5yr / 5yr
    Origin
    Australia

Prices include standard installation. After STCs uses the $380 to $646 federal range above, before any state scheme. Warranty is shown as parts / tank. Actual costs vary by location.

Heat pump running costs per year

What each type of hot water system costs to run in a year on our estimates, with its emissions and efficiency.
Annual running cost range for each hot water system, on a scale of $0 to $1,200

  1. Electric storage (off-peak)

    High emissions, 90 to 95% efficient

    $450 to $650

  2. Electric storage (anytime)

    High emissions, 90 to 95% efficient

    $800 to $1,200

  3. Gas storage

    Medium emissions, 60 to 70% efficient

    $400 to $600

  4. Gas instantaneous

    Medium emissions, 80 to 85% efficient

    $350 to $550

  5. Heat pump

    Low emissions, 300 to 400% efficient

    $150 to $300

  6. Heat pump + solar

    Very low emissions, 300 to 400% efficient

    $50 to $150

10-year savings

$5,000 to $8,000

On these estimates, switching from electric storage to a heat pump saves about $5,000 to $8,000 over 10 years in running costs, and often pays for itself within 3 to 5 years. Your tariff and hot water use set the real figure.

Integrated heat pump hot water unit on a concrete pad beside a weatherboard house
An integrated heat pump. Running it in the middle of the day on your own solar cuts the cost further.

State rebates

Federal STCs apply in every state. These are the state schemes for a heat pump; a household uses its own state's.

  • New South Wales

    Heat pump scheme
    Up to $640 for a heat pump replacing an electric water heater, up to $330 replacing gas (ESS)

  • Victoria

    Heat pump scheme
    Half the cost up to $1,000, or up to $1,400 for an Australian-made product, households with income under $150,000. VEU discount may also apply

  • South Australia

    Heat pump scheme
    Retailer discount under REPS WH1, no set amount

  • ACT

    Heat pump scheme
    A loan of up to $20,000 at 3% for new applicants from 1 July 2026 (up to $15,000 for earlier participants), through Brighte

  • Queensland

    Heat pump scheme
    Federal STCs. No state hot water scheme on our records

  • Western Australia

    Heat pump scheme
    Federal STCs. No state hot water scheme on our records

  • Tasmania

    Heat pump scheme
    Federal STCs. No state hot water scheme on our records

  • Northern Territory

    Heat pump scheme
    Federal STCs. No state hot water scheme on our records

Rebate figures as at October 2026, at $38 a certificate. Sources checked October 2026. Sources: Clean Energy Regulator, solar water heaters and air source heat pumps; Clean Energy Regulator, register of air source heat pump models (updated 10 August 2026); Solahart, STC incentives (published 7 May 2025); NSW Government, Hot water upgrade incentive (updated 6 February 2026); Solar Victoria, Solar Homes hot water rebate (open as at 12 October 2026); SA Department for Energy and Mining, REPS activity WH1 specification 2026.1; ACT Government, Sustainable Household Scheme.

Heat pump cost questions

How much does a heat pump hot water system cost in Australia?
A heat pump hot water system for an average household (270 to 315L) costs $3,800 to $5,200 installed. Federal STCs take about $380 to $646 off a 250 to 315 litre heat pump this year, so expect to pay about $3,154 to $4,820 before any state scheme (as at October 2026). Running costs are about $150 to $300 a year.
What rebates are available for heat pump hot water?
Every state gets federal STCs on a registered heat pump until 31 December 2030: 10 to 17 certificates, about $380 to $646, for a 250 to 315 litre model this year. On top of that, NSW (Energy Savings Scheme) and Victoria (Solar Homes rebate, plus Victorian Energy Upgrades) have their own schemes, South Australian retailers may offer a REPS discount, and the ACT offers a loan. A household uses its own state's scheme; see the state table on this page.
Are heat pumps cheaper to run than gas hot water?
Usually. On our estimates heat pumps cost $150 to $300 a year to run, compared with $400 to $600 for gas storage or $350 to $550 for gas instantaneous. Run in the middle of the day on your own solar, the cost can drop to about $50 to $150 a year.
How much does it cost to service a heat pump?
There is no set price: a service is a plumber or technician visit, charged at their call-out and hourly rate. Most makers ask for a check every few years: the relief valve, the anode on an enamel tank, and the air intake and evaporator kept clear. Ask the installer what a service costs and how often the warranty needs one before you sign.
Which heat pump is the best value for money in Australia?
It depends on what you weigh. On installed price alone, the cheapest 270 litre units in our brand table are EvoHeat and Rheem Ambiheat. Value also means the tank warranty (some run to 15 years), the efficiency (COP), the noise level in dB if the unit sits near a bedroom, and the refrigerant (CO2 and R290 hold up better in cold weather). Compare those on the quote, not just the price.
How much does it cost to replace a hot water system?
Replacing an electric or gas system with a 270 to 315 litre heat pump costs about $3,800 to $5,200 installed before the STC discount. A like-for-like electric storage replacement is cheaper upfront, about $1,500 to $2,500, but earns no STCs and costs more to run. Our hot water system replacement guide compares all five types. Read the replacement guide.

Related pages

  • Heat pump guide

    Brands, types and refrigerants compared, to find the right system for your home.

  • Installation guide

    What to expect when a heat pump goes in: requirements and timeframes.

  • All rebates

    Solar, battery and heat pump rebates, state by state.

Get your heat pump quote

Prices vary by brand and installer. A free quote from a licensed local installer shows your exact cost after rebates.

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