At Solar Choice, we give you a simple and honest look at heat pump hot water systems in Melbourne, Victoria. Solar Choice doesn’t sell or install heat pumps, and its our goal to provide you with independent and unbiased advice.
This article covers some of the key buying considerations for homeowners looking at upgrading to a hot water heat pump.
Are hot water heat pumps worth it in Melbourne Victoria?
Heat pump water heaters in Melbourne can be worth it if you chose the right model. They use up to 70% less electricity than traditional water heaters and could reduce your energy bills by 18% to 30%. Melbourne’s climate is good for year-round efficiency and offers substantial rebates like the Federal STC and Solar Victoria incentives that can lower initial costs, often by $1000-$2000. Typically, homeowners see a return on investment within 3 to 5 years, making heat pumps a practical and eco-friendly choice for homes. Read below to find out if they’re right for you.
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How much does it cost to install a heat pump in Melbourne Victoria?
The price of a heat pump hot water installation in Melbourne depends heavily on the quality of system you want to install. As most of the rebates can only be claimed once, we strongly recommend spending a bit more money to at least get a mid-range quality system.
Here’s a rough breakdown of what to expect if your eligible for all the rebates:
Quality
Indicative Wholesale Costs
Potential Max Rebate in Victoria
Typical Installation Costs
Final Cost to Customer
Questionable (recommend to avoid)
Under $2,000
-$2,600
$700 to $1,500
$0 to $1,000
Mid-Range
$2,500 to $3,000
-$2,600
$700 to $1,500
$1,000 to $1,500
Well Known
$3,000 to $4,000
-$2,600
$700 to $1,500
$1,500 to $2,500
Top Of the Line
$5,000 to $6,000
-$2,600
$700 to $1,500
$3,000 to $5,500
Additional factors that might increase installation costs
New water lines
Long distance between switchboard and water heater location
Difficult access requiring specialised equipment
Upgrades from gas systems can be a little more expensive as the rebates are slightly lower and usually requires more electrical work as part of the installation.
The 3 rebates in Victoria make for a perfect storm for ‘rebate chaser’ organisations. These companies seek to capitalise on the rebates by pairing them with cheap, low quality equipment and dodgy installation practices to get to a ‘no-brainer’ offer.
You only have one chance to apply for the Victorian rebates described above. So it is important to get a good quality system that will provide a good lifetime.
We highly recommend doing proper due diligence on any heat pump hot water system you are considering and the company proposing to install it. We have published independent reviews of all hot water heat pumps available in Australia with an easy quick reference score out of 5.
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What are the downsides to a heat pump?
Heat pumps are less efficient in colder climates so it’s important to ensure the heat pump has enough heating power to maintain hot water through winter. Water quality can cause scaling and corrosion, though Melbourne’s soft water reduces this risk. Heat pumps are typically noisier than gas or electric heating systems with ratings typically between 37 and 50 decibels. Warranties for heat pumps can often be a bit more complex as they are generally split between the tank, heat pump compressor, electronics and the labour involved.
Choosing the right model can mitigate these downsides and we’ll show you how.
Do heat pumps work in Melbourne in winter?
In Victoria, winter temperatures can drop well below 5°C, so it’s crucial to consider the COP rating of hot water heat pumps at lower temperatures. Heat pumps extract heat from the air, but cheaper models often struggle below 5°C and rely on an electric booster, resulting in higher electricity usage.
Despite Melbourne’s variable but moderate climate, ensuring reliable hot water throughout Victoria requires selecting models with high COP ratings at lower temperatures. This ensures consistent year-round performance and lower energy prices.
If it gets down to 0°C where you are located, then we recommend checking that the heat pump has the right anti-freezing protection technology and has a reasonable sized compressor.
Water quality & hot water heat pump systems
Certain areas in Australia, such as South Australia and some of the more remote parts of Victoria, have what is known as “hard water”. In contrast, Melbourne has some of the best quality drinking water in the world known as “Soft Water”. This soft water reduces scaling and corrosion risks, making it ideal for hot water heat pumps.
For enhanced durability and efficiency, choose models with corrosion-resistant materials like stainless steel tanks, copper or titanium components, and consider using sacrificial anodes to further prevent corrosion.
Heat pump water heaters, space, noise levels & Installation
If you’re installing a heat pump in a densely populated part of Melbourne, space & noise constraints can be an issue. Urban homes often have limited room, making traditional heating systems challenging to install. Compact, integrated heat pump systems and flexible split systems can be ideal solutions but it depends on your space.
“All-in-one” or integrated systems house all components in one unit, minimising space requirements. In contrast, split systems separate the outdoor compressor from the indoor unit, reducing noise and allows for flexible installation.
Heat pump & solar PV compatibility
Integrating heat pump systems with solar PV systems is particularly advantageous in Melbourne, which enjoys many long sunny days throughout the year. For instance, systems from companies like Reclaim Energy or Stiebel Eltron offer app functionality that allows you to optimise energy savings by solely using surplus solar power to run the heat pump, thereby reducing reliance on the grid and lowering energy bills. Alternatively most heat pumps hot water systems have inbuilt timer functionality where the heating cycle can be set to the middle of the day or off-peak electricity hours.
Conclusion
At Solar Choice, our goal is to provide honest and independent advice on heat pump hot water systems in Melbourne, Victoria. Heat pumps are a worthwhile investment, offering significant energy savings, lower greenhouse gas emissions, and substantial rebates that reduce initial costs. While installation costs can vary, selecting the right model and installer can ensure long-term efficiency and satisfaction.
Here are some more free resources to help you learn about hot water heat pumps
With half a decade experience in the solar energy industry, specialising in business strategy and marketing for solar companies. He has worked with top solar distributors in Canada and now collaborates with solar manufacturers and installers across Australia via Solar Choice, Australia's leading solar comparison platform. With degrees in business technology, science, and marketing, James combines in-depth market insights with technical knowledge, positioning him as a trusted authority in renewable energy.
