Heat Pump Hot Water Government Rebate: What’s Available in 2026
Replacing an old hot water system with a heat pump can involve a significant upfront cost, but eligible Australian households may receive an STC discount, with additional rebates or incentives available in some states. This guide explains the heat pump hot water government rebate options available in 2026, including where support applies, who may qualify, and how the incentives work across different states.
Why Upgrade to a Heat Pump Hot Water System
A heat pump hot water system can improve household energy efficiency and lower long-term running costs compared with a conventional electric storage unit.
Uses Less Energy
Unlike traditional electric storage systems that use direct resistance heating, a heat pump transfers heat from the surrounding air to warm water. This heat pump water heater working principle is why many models can use significantly less electricity, although actual performance depends on climate, system size and household demand.
Cuts Running Costs and Household Emissions
Using less electricity for hot water can help lower ongoing energy costs and reduce household emissions. This can be particularly useful during colder months, when higher household energy use and heating costs may increase pressure on household budgets. The actual savings will depend on electricity prices, hot water consumption and the efficiency of the selected system.
Makes the Upgrade More Affordable
Heat pump systems generally have a higher purchase and installation price than conventional electric units. STC discounts and selected state incentives can lower the upfront cost, with eligibility and available support varying by location.
Federal and State Heat Pump Hot Water Incentives in 2026
Australian households may be eligible for an Australia-wide STC discount, with additional heat pump hot water rebates and incentives available in selected states. The support offered varies by location and program, so the overview below compares the main options and indicative values for 2026.
2026 Heat Pump Hot Water Rebate Overview
Location | Rebate or Incentive | Indicative Value |
Federal | Small-scale Technology Certificates (STCs) | Varies by eligible model, installation location and STC market value |
New South Wales | Hot Water Upgrade Incentive | Up to around $640 when replacing an electric system, or around $330 when replacing gas |
Australian Capital Territory | Home Energy Support Program | 50% of eligible costs, up to $2,500 across the eligible home electrification upgrade category |
Victoria | Solar Homes Hot Water Rebate | Up to $1,000, or $1,400 for eligible locally made systems |
Victoria | Victorian Energy Upgrades Discount | Up to $630 when replacing an inefficient electric system, or up to $560 when replacing gas |
South Australia | Retailer Energy Productivity Scheme (REPS) | Provider-based discount; value and availability vary |
Queensland | No dedicated statewide heat pump hot water rebate identified | Eligible systems may still receive STCs |
Tasmania | No dedicated statewide heat pump hot water rebate identified | Eligible systems may still receive STCs |
Federal Incentive: Small-scale Technology Certificates (STCs)
Under the Small-scale Renewable Energy Scheme, approved air-source heat pump models can generate Small-scale Technology Certificates. Rather than receiving a cash payment, households usually transfer the certificates to a registered agent and receive a reduction in the quoted purchase and installation price.
STC entitlements decrease each year as the Small-scale Renewable Energy Scheme approaches its scheduled end in 2030. The Clean Energy Regulator’s register shows the number of STCs available to each eligible heat pump model based on a 10-year period. For systems installed in 2026, this figure is multiplied by 0.5 and rounded down to the nearest whole certificate.
The number of STCs available depends on the registered model, installation postcode zone and installation year. The final upfront discount may also vary with the STC market price and the offer provided by the registered agent or installer. The exact model must be listed as eligible on the Clean Energy Regulator’s register on the installation date.
New South Wales: Hot Water Upgrade Incentive
NSW households and small businesses can access an indicative upfront saving of up to $640 when replacing an electric water heater, or around $330 when replacing gas. The final figure varies with the selected unit, site conditions, additional work and the participating installer’s offer.
To access the incentive:
Arrange the upgrade through an installer connected to an Accredited Certificate Provider.
Select a qualifying heat pump covered by at least a five-year manufacturer’s warranty.
Sign the nomination form before work begins.
The incentive generally cannot be claimed after the system has been installed, so it should be confirmed and included in the quote before the upgrade proceeds.
Victoria: Solar Homes Hot Water Rebate
The Solar Homes Program offers Victorian owner-occupiers up to $1,000, rising to $1,400 for products that meet the locally made requirements. It covers 50% of the qualifying product price, up to the relevant cap, after STC and Victorian Energy Upgrades savings have been deducted.
From 1 July 2026, the main criteria are:
Combined taxable income of $150,000 or less
Property value below $3 million
No previous hot water or solar battery rebate at the address
An existing unit at least three years old
An existing owner-occupied property
The product and retailer must both appear on Solar Victoria’s approved lists. After the retailer submits the quote, the householder completes the eligibility check and receives a QR code before the work starts. Approval is generally valid for 120 days, with a separate pathway for emergency replacements.
Victoria: Victorian Energy Upgrades Discount
Victorian Energy Upgrades provides a separate certificate-based saving for replacing an inefficient hot water unit with an approved heat pump. Current indicative figures are around $630 for an electric replacement and $560 for a gas replacement.
The offer is available to qualifying households and private rental properties where:
The building is at least two years old.
The replacement model appears on the VEU product list.
A minimum five-year warranty is included.
An accredited provider arranges the upgrade before work begins.
VEU support can sit alongside STCs and the Solar Homes rebate when the separate rules for each program are met. However, certificate values and provider offers vary, so the figures should not be added together as a guaranteed total.
Australian Capital Territory: Home Energy Support Program
The ACT Home Energy Support Program is a targeted rebate rather than a general incentive available to every household. It covers hot water heat pumps as part of a broader home electrification category that also includes reverse-cycle heating and cooling, electric cooking and ceiling insulation. These upgrades share the same rebate limit, so the full amount may not apply separately to each product.
The main eligibility conditions include:
The applicant must live in the ACT and own and occupy the property.
They must hold an eligible Pensioner Concession Card, DVA Gold Card or Health Care Card.
The property’s unimproved value must be no more than $750,000 for most freestanding homes and units, or $300,000 for unit-titled multi-storey apartments.
The applicant must attend the required Everyday Climate Choices workshop.
The rebate-only option does not require a credit check, although the household generally pays the supplier upfront and receives the rebate after the installation and claim have been approved. Eligible households may also use a separate zero-interest loan to help cover the remaining cost.
South Australia: Retailer Energy Productivity Scheme
South Australian households and businesses may be eligible to access energy-saving activities through the Retailer Energy Productivity Scheme. Participation is voluntary, and support is delivered through obliged energy retailers and participating activity providers rather than as a fixed government cash rebate.
Access depends on:
The type of upgrade being offered.
The property or premises.
The eligibility requirements for the approved activity.
The availability of offers from retailers or activity providers.
REPS may support approved upgrades such as insulation, efficient appliances and other energy-saving technologies. A heat pump hot water upgrade may qualify where it is covered by an approved activity and offered by a participating provider. The available discount, eligibility requirements and any customer contribution can vary.
How to Apply for Heat Pump Hot Water Rebates in Australia
The way households access support differs by program. STCs and certificate-based incentives are usually applied through a provider, while the Solar Victoria rebate requires the householder to complete an eligibility application before installation.
Identify the Support Available for Your Property
Start with the Australia-wide STC incentive, then check whether a state-based rebate or discount also applies. Your location, existing hot water unit, chosen replacement model and property type can all affect what is available.
Check the Product and Service Provider
Confirm that the exact heat pump model appears on the relevant approved product list. The required service provider may be an authorised retailer, an accredited provider or an installer working with an Accredited Certificate Provider, depending on the scheme.
Compare Itemised Quotes
Ask each provider to show the equipment, installation work, STC value and any state incentive separately. Focus on the final installed price, as a larger advertised rebate does not always result in a lower total cost.
Finalise the Paperwork Before Installation
Complete all required approvals before work begins. This may include signing a NSW nomination form, receiving a Solar Victoria rebate QR code or engaging an accredited VEU provider. Starting the installation too early can affect eligibility.
Review the Final Documents
Check that the invoice matches the accepted quote and retain the warranty, product details and incentive paperwork. These documents provide a record of the discount received and the system installed.
How Much Can a Heat Pump Hot Water System Save?
Rebates can lower the upfront cost of a heat pump hot water system, while reduced energy use provides longer-term savings. In the example scenarios below, NSW households save around $800–$2,200 per year, while Victorian households save approximately $800–$1,600.
Example Savings in New South Wales
Daily Hot Water Use | Existing System | Energy Rate | Annual Savings | Payback Period |
150L per day | Gas storage | $0.052 per MJ | $1,054 | 3.6 years |
150L per day | Electric storage | $0.35 per kWh | $813 | 4.4 years |
300L per day | Gas storage | $0.052 per MJ | $2,108 | 1.8 years |
300L per day | Electric storage | $0.35 per kWh | $1,627 | 2.2 years |
Example Savings in Victoria
Daily Hot Water Use | Existing System | Energy Rate | Annual Savings | Payback Period |
150L per day | Gas storage | $0.041 per MJ | $817 | 3.2 years |
150L per day | Electric storage | $0.35 per kWh | $813 | 2.8 years |
300L per day | Gas storage | $0.041 per MJ | $1,635 | 1.6 years |
300L per day | Electric storage | $0.35 per kWh | $1,627 | 1.4 years |
These scenarios assume:
Installed solar with a feed-in tariff of $0.03 per kWh.
An installed price of $3,600–$3,800 in NSW after applicable rebates.
An installed price of $2,280–$2,600 in Victoria after applicable rebates.
The existing hot water system could otherwise remain in service.
Actual savings depend on household hot water use, energy tariffs, solar generation, installation requirements and the selected heat pump. The emissions reduction will depend on the system being replaced, local grid emissions and the amount of solar electricity used.
How to Save More Beyond a Heat Pump Hot Water Rebate
A heat pump hot water government rebate can lower the purchase and installation cost of an eligible system. Once the upgrade is complete, the size and location of the unit, the time it runs and the household’s hot water habits will have a greater influence on ongoing costs.
1. Get the System Size and Setup Right
Getting the tank size right is important. A unit that is too small may struggle during busy periods, while an oversized tank generally costs more to buy and run. The installer should consider the size of the property, likely occupancy, shower patterns and how quickly the selected model reheats water rather than simply recommending the largest available option.
Local conditions also matter. Check that the model is suited to the climate where it will operate, particularly in cooler parts of Australia. The outdoor component needs adequate airflow and should be positioned away from bedroom windows and neighbouring living areas where possible, as the compressor and fan will produce some noise.
2. Run It When Electricity Costs Less
A timer or compatible control can allow the heat pump to run when the home’s solar panels are producing more electricity. Using more of this power onsite can reduce grid imports, although the best schedule will vary with the season, household demand and tank size.
For homes without solar, an off-peak or controlled-load tariff may offer another way to manage running costs. Availability depends on the meter, retailer plan and electrical connection, and moving a hot water service away from an existing controlled-load circuit should be assessed by an appropriately licensed electrician. Any programmed hygiene or defrost cycles should remain enabled.
After the hot water schedule has been considered, some households may also look at storing solar or lower-cost grid electricity for other household loads. This is separate from the heat pump hot water rebate and is not intended to suggest that a portable power station should directly supply the hot water system.
EcoFlow DELTA 3 Ultra Plus Portable Power Station is a flexible option for compatible plug-in appliances. It can be charged from compatible solar panels or mains power, then used for refrigeration, lighting, internet equipment and personal devices when power is needed elsewhere around the home.
For households looking to make greater use of stored solar energy, EcoFlow DELTA Pro Ultra Whole-home Backup Battery provides a larger-scale energy storage option. When paired with the EcoFlow Transfer Switch, it can be integrated into a whole-home energy setup, allowing stored power to be used across selected household circuits when needed. For more details on the setup process, check out the installation tutorial for guidance.
3. Reduce Hot Water Waste and Heat Loss
Using less hot water reduces how often the tank has to reheat. Fix dripping hot taps promptly and consider a higher-rated WELS showerhead or flow-controlled fittings, particularly in homes where showers account for a large share of daily hot water use. Using less heated water can lower both water and energy costs.
Heat can also be lost between the tank and the tap. Properly insulating exposed hot water pipes helps retain temperature and can provide added protection in frost-prone areas. Keep an eye out for leaks, error messages or changes in recovery time, and arrange servicing in line with the manufacturer’s instructions rather than waiting for the unit to stop working.
Conclusion
A heat pump hot water system can be a worthwhile upgrade for Australian households looking to reduce hot water energy use and manage long-term running costs. The heat pump hot water government rebate can help make the initial investment more affordable, with federal STCs and selected state incentives available depending on the location, property and eligible system.
The overall value of an upgrade depends on more than the rebate amount alone. The final cost, system suitability, installation requirements and everyday operating habits all influence the savings a household may achieve over time. Understanding the available incentives and how the system fits your energy needs can help you make a more informed upgrade decision.
FAQs
Is it worth getting a heat pump hot water system?
A heat pump hot water system is often worth considering for many Australian households due to its lower energy consumption and long-term cost benefits. Although the initial installation cost can be higher than traditional systems, government rebates and incentives can help reduce upfront expenses. Over time, lower electricity usage can lead to noticeable savings on household energy bills, making it a practical option for improving overall home efficiency.
How much does a heat pump hot water system cost in NSW?
A heat pump hot water system in NSW typically costs around $2,000 to $6,000 including installation, depending on the system size, model, installation requirements and whether additional work is needed. The final price can vary significantly between properties, so getting itemised quotes is important.
NSW households may be able to reduce the upfront cost through the Hot Water Upgrade Incentive, with indicative discounts of up to around $640 when replacing an electric water heater or around $330 when replacing a gas system. The final discount depends on the eligible system, property details and installer arrangement.
How do I claim my heat pump hot water rebate?
The process depends on the rebate or incentive available in your state. For many heat pump hot water upgrades, the discount is applied through the installer or retailer, who includes eligible STCs or certificate-based incentives directly in the quote rather than providing a separate cash payment.
Some state programs require households to complete eligibility checks or receive approval before installation begins. For example, state-based rebates may involve selecting an approved product, using an authorised provider and completing required paperwork before the upgrade proceeds.
To avoid missing available support, check the requirements for your location before installation, compare quotes that show rebates separately and confirm how the final discount will be applied.
*Disclaimer: Before reading this guidance, please note that rebate programs can vary based on individual circumstances, location, and eligibility criteria. EcoFlow does not provide any assurances or guarantees concerning potential rebates associated with our products. Any information in this guidance is solely for educational purposes and shall not be construed as legal or financial advice. We recommend you consult the official program guidelines or seek professional advice for accurate and personalised information.