Cost guides › Heat pump hot water
Australia
Heat pump hot water system cost
Swapping an old electric or gas storage heater for a 270 L heat pump hot water system typically costs $4,500 installed, with most jobs between $3,500 and $5,850, after the STC discount and including GST. An entry-level all-in-one unit comes in around $3,600, while a split CO2 system costs about $6,000.
Most homeowners pay
Estimate your project
Cost by region
| Location | Basic | Mid-range | Premium |
|---|---|---|---|
| Australian Capital Territory | $3,700 | $4,550 | $6,100 |
| Western Australia | $3,650 | $4,550 | $6,050 |
| New South Wales | $3,650 | $4,500 | $6,000 |
| Northern Territory | $3,650 | $4,500 | $6,050 |
| Queensland | $3,600 | $4,500 | $6,000 |
| Victoria | $3,600 | $4,500 | $6,000 |
| South Australia | $3,550 | $4,450 | $5,950 |
| Tasmania | $3,550 | $4,400 | $5,900 |
What's included
Mid-range
- Quieter all-in-one heat pump water heater with better cold-weather performance
- Tempering valve, isolation valves and fittings
- Removal and disposal of the old water heater
- Plumbing connection and commissioning by a licensed plumber
- Electrical connection by a licensed electrician
- Installation in the same spot as the old system
- STC discount applied to the price
What affects the cost
Tank size
Tanks run from about 160 L for one or two people to 300 L or more for a larger family. A bigger tank costs more but avoids running out of hot water; your plumber can size it from the number of people and showers in the house.
All-in-one or split system
All-in-one units have the compressor on top of the tank and are the cheapest to buy and install. Split systems, including CO2 models, put the compressor outside separately, run quieter near bedrooms and cope better in cold areas, but cost more.
Climate and noise
In cooler regions such as Tasmania, Victoria or the ACT, a unit rated for low temperatures keeps recovery times reasonable. The compressor hums like an air conditioner, so placement away from bedroom windows and neighbours matters.
Switching from gas
Replacing a gas storage heater means the gas line has to be capped by a licensed gasfitter, and there may be no power point where the old unit stood. Both add to the job.
Switchboard and electrical
An older switchboard may need work to take a new circuit or timer, and a switchboard upgrade is not included here. Moving the system to a new location also adds plumbing and electrical cost.
STC value
Prices are usually quoted after STCs, and the discount depends on the model and where you live. The discount steps down each year until the scheme ends in 2030, so the net price of the same unit tends to rise over time.
How to save
- Replace before the old tank fails, so you have time to compare quotes instead of taking whatever is in the van on the day.
- Set a timer to run the heat pump in the middle of the day, especially if you have rooftop solar.
- Pick the tank size your household actually needs rather than the biggest one on offer.
- Check with your state government for any hot water rebates and confirm eligibility before booking the install.
Grants, tax and rules
STC discount
Heat pump hot water prices are usually quoted after STCs (small-scale technology certificates), a federal discount that steps down each year until the scheme ends in 2030. Our figures are after STCs; some states also offer rebates on top.
Licensed trades
Electrical and plumbing work must be done by licensed tradespeople under state licensing. Make sure both the plumber and the electrician on the job are licensed.
GST
Quotes to households include 10% GST, and our figures include GST.
Frequently asked questions
How much does a heat pump hot water system cost installed?
For a 270 L system replacing an existing storage heater in the same spot, expect around $4,500 after STCs, including GST. A basic unit is about $3,600 and a split CO2 system about $6,000.
Are heat pump hot water systems worth it?
They use far less electricity than a standard electric storage heater to heat the same water, so running costs drop, and they suit homes getting off gas. How quickly the upfront cost pays back depends on your tariff, household size and whether you have solar.
Is the STC rebate already included in the price?
Usually yes. Installers typically take the STC value off the quote and claim the certificates themselves. Check the quote says it is after STCs so you can compare like for like.
Are heat pump hot water systems noisy?
They make a steady hum similar to an air conditioner's outdoor unit. Quieter models and split systems help, and placing the unit away from bedrooms and the neighbour's windows matters more than the model.
Do heat pumps work in cold weather?
Yes, but recovery slows as the air gets colder. In cooler climates choose a model rated for low temperatures, or a CO2 split system, which keeps working well in the cold.
Who can install a heat pump hot water system?
The plumbing must be done by a licensed plumber and the electrical connection by a licensed electrician. Many installers have both on the team or send them together on the day.
How this estimate is calculated
Work hours: 7 · Labour: $703 · Materials: $3,381
Sources: ABS Employee Earnings and Hours, Australia; Regione Toscana, Prezzario dei Lavori 2026 (CC BY 4.0); ECB exchange rates.