Guide to heat pump hot water systems

apricus all-in-one heat pump hot water system installed outside an Australian home

Danny Baggs

Posted September 13, 2022

The best energy-saving hot water system is a hot water heat pump, which can ‘store’ your excess solar energy as hot water. Here’s everything you need to know about heat pump hot water systems.

A heat pump hot water system can reduce your household’s hot water energy consumption by up to 80 per cent. It can also use free solar energy to power what little energy is required, potentially reducing your running costs to zero. Considering that hot water is the average Australian household’s biggest energy user after central heating, this is a significant cost reduction. Heat pump systems also generally emit the lowest amount of greenhouse gases compared to other hot water systems, making them a sustainable and eco-friendly choice for households.

Everything you need to know about hot water heat pumps

What is a heat pump hot water system?

A heat pump hot water system is similar to an ordinary hot water system, but it uses up to 80 per cent less energy to warm your water.

“A heat pump system works much like a refrigerator in reverse - by transferring the heat outside the unit to the water inside the heater,” explains RACV Solar Business Development Manager Thomas McKenzie. “These systems are more efficient than conventional water heaters despite operating using electricity. They can save money and energy while reducing greenhouse gas emissions.”

If your home has rooftop solar panels, your smart heat pump hot water system can even use excess solar power to heat the water.


RACV technician installing solar panels

Solar panels can power heat pump hot water systems. Image: Matt Harvey

How does a heat pump hot water system work?

"Heat pump hot water systems use a heat exchange system that absorbs the heat from the surrounding air and uses it to heat your water,” says McKenzie.

Essentially, the system’s heat pump pulls air outside the pump into its evaporator with a fan. The evaporator’s piping contains a special refrigerant, which the warm outside air turns into gas. The refrigerant gas is then pumped through a valve by a compressor. This compression process generates heat, which a heat exchanger then moves from the gas pipes to the water storage tank. These processes can be powered by the energy generated from solar panels, although regular electricity will work too.

“Learning how hot water heat pumps work shows you why these systems are also referred to as a ‘air-source heat pump’, ‘air to water heat pump’, or ‘hybrid electric water heater’,” says McKenzie.


Watch Solar Victoria's video on how heat pump hot water systems work

Are heat pump hot water systems energy efficient?

Heat pump hot water systems are highly energy efficient. “A heat pump only uses electricity to drive the compressor and the fan, while a traditional electric resistance water heater uses electricity to directly heat the water,” explains McKenzie. “This can reduce hot water energy use by up to 80 per cent compared to a conventional electric hot water system. That’s up to five times more efficient.”

Since hot water systems account for around 23 per cent of an Australian household’s total energy use (according to YourHome), energy efficiency is incredibly important when it comes to water heating.

How much do heat pump hot water systems cost?

Heat pump hot water system prices range depending on their make, model and supplier. When deciding on your hot water system, remember to consider its lower running costs as compared to a gas or electric hot water system.

Solar Victoria currently provides a 50 per cent rebate of up to $1,000 on heat pump hot water systems to eligible Victorian households. You can alternatively access a rebate of around $840-$1,260 through the Victorian Energy Upgrades program.

In addition, during September 2022 RACV Solar is offering a $250 discount on Apricus All-In-One heat pumps and Reclaim heat pump hot water system purchases, or $500 off if purchased in combination with solar PV panels.


person washing up dishes at kitchen sink

Hot water is used for washing dishes as well as baths, showers and laundry. Image: Matt Harvey

How are heat pump hot water systems installed?

Heat pump hot water systems must be installed by an accredited technician, like RACV Solar. Before the install, your supplier will provide you with a tailored quote recommending the perfect hot water system for your household’s size and requirements.

“Most installs can happen within one day,” McKenzie adds. “Typically, water will only be turned off for no more than one to two hours.”

What is the best heat pump hot water system?

RACV Solar uses Reclaim Energy and Apricus heat pump hot water systems, both of which can run on solar energy and are locally designed to handle Australian conditions.

Are heat pump hot water systems popular?

“Traditional gas and electric hot water systems are still fairly common in Australian homes, because most households don’t need to replace their hot water systems often,” says McKenzie. “However, more and more people turn to heat pumps when choosing a new system, and the number installed in homes should continue to climb as more old systems need to be replaced.”


reclaim heat pump hot water system

RACV Solar uses Reclaim and Apricus heat pump hot water systems.

Should I get a heat pump hot water system?

Thanks to their efficiency, heat pump hot water systems are an ideal choice for any household that wants to switch away from gas or reduce their energy consumption for heating water.

“While there will be an upfront cost to install a new hot water system, heat pumps cost significantly less to run over the long term,” McKenzie says. “So for many households, it makes most sense to install a heat pump when it’s time to replace an old hot water system.”


Make your solar power go further with a hot water system that uses less energy.
Discover RACV Solar →