Hot Water Systems


Up to 30% of your electricity consumption is from your hot water system.

Water heating products are the second largest users of energy for all household appliances, accounting for up to 30% of the total energy usage. Using a Heat Pump can reduce this by up to two-thirds.

Heat pumps are more energy efficient than conventional electric water heaters which can save households 60-80% on running costs. Boasting a lifespan of between 10 and 15 years, they are not only efficient but also an economical choice.

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With the Victorian Government’s phase-out of new gas connections expected to begin in January 2024, there’s never been a better time to install a hot water heat pump solution. With new residential builds required to be all-electric as of January 2024, we’re likely to see a surge in demand, cost, and installation waiting times as home-builders switch from gas to electric.

At Direct NRG, we use well-known brands such as Reclaim and Apricus, however, our team can source and install almost any brand and will always choose the right system for your needs. With federal and state rebates available for our heat pumps, this means a significant reduction in the cost of purchasing and installing your system.

Government rebates on hot water systems of up to $1000 available for qualifying households*

  • STC* approved
  • VEEC* approved
  • Qualifies for the Victorian Solar Hot Water rebate of up to $1000*

Get in touch with Direct NRG today and talk to a hot water specialist about energy efficient hot water systems. Start saving today!

Common Questions

Most Popular Questions

Explore our most popular questions to get the information you need quickly and easily. If you have any additional queries, don’t hesitate to reach out to us directly!

Most people are familiar with solar hot water systems. But did you know a heat pump also uses renewable energy to heat water?

A solar hot water system relies on the power of the sun. However, heat pump hot water systems use the heat from the air. This is then used to heat water for your home.

While they do require electricity to operate a pump for a fan and compressor, heat pump systems offer far greater energy efficiency than an electric hot water heater.

When used and installed correctly, they reduce greenhouse gas emissions and can also save you a lot of money.

A traditional electric hot water system uses electricity to heat water using an element. It works in the same way an electric kettle does.

Alternatively, a heat pump water heater only relies on electricity to operate a pump, rather than using it to heat the water itself. The pump then moves a refrigerant through the system. This refrigerant transfers heat from the air through to the water to heat it. It pumps heat into water in a similar way to how a refrigerator pumps heat out to keep things cold.

There are 2 types of heat pump hot water heaters:

  • Integrated – designed to be installed as a single outdoor unit
  • Split – with components inside and outside the home, similar to an air conditioner for heating and cooling

Integrated systems consist of a heat pump and storage tank. The heat pump is usually mounted on top of the storage tank. The evaporator, which absorbs heat from the air, fan, condenser, and compressor, that concentrates the heat, are contained within the heat pump.

In a split system, the evaporator, fan and compressor are in a separate unit to the water storage tank, connected by piping.

  • Lowers running costs – You will save up to 70% on your water heating costs.
  • Lower consumption of power – A heat pump uses some electricity but up to ⅔ less than conventional hot water systems. This is because a heat pump only uses electricity to drive the compressor and the fan, instead of using electricity to heat the water directly with an electric element.
  • Reduces your home’s greenhouse gas emissions.
  • Performs particularly well in warmer climates, because they’re pulling in hot air from the environment.
  • Use a Heat Pump to store excess power from your Rooftop Solar – If, like me, you don’t have a storage battery for your solar yet, you can maximise the potential of a heat pump by syncing it with your solar power system. You will need to choose a heat pump with a built-in smart timer which will offset any excess power to the heat pump – further reducing your power costs.
  • If you’re replacing your electric hot water system with a heat-pump hot water system or installing a new one, you may be eligible for a discount under the following Government incentive programs:

    Each incentive program has different eligibility requirements. Talk to ones of our experts to find out more.

Heat pumps are easy to install and can be located outside, saving time, money and disruption to your home.

The installation of heat pumps does not require connecting gas lines, which is usually a major project. They have similar installation requirements to an electric system. They also offer a viable alternative for homes where flat-panel solar hot water systems can’t be installed due to roof pitch, council regulations, or shading.

Heat pumps are a cleaner alternative, with a better environmental impact than other types of hot water systems, as they produce less greenhouse gas emissions.

  • The process of extracting coal or gas is extremely damaging to the environment,
  • The actual process of turning fossil fuels into energy is very inefficient, in fact fossil fuel energy wastes ⅔ of the energy in the process.
  • A hot water heat pump only needs ⅓ to ¼ of the energy of fossil fuelled hot water heaters.

Heat pumps can reduce your energy costs even more long-term – you can save 55% to 80% on your energy costs over many years compared to standard electric storage or gas hot water systems, and heat pumps have a long average service life of 12–15 years.

Typically heating hot water each day for our hot water tanks using electric hot water (resistive element) requires 8kWh per day. Alternatively, gas hot water systems use 36 MJ per day. Hot water heat pumps are efficient, and only use 2kWh per day.

The savings depends on a few things. Electricity for electric hot water can cost 14-18 c/kWh for off-peak controlled load, or 24-30 c/kWh for normal tariffs. At 8 kWh per day, this means annual electricity costs can be $410 to $910 or more annually.

Reducing consumption for hot water to 2kWh per day can reduce this to $100 to $220 per year, savings $310 to $680 per annum.

Gas has also become expensive in recent times, so similar savings are possible. Better yet, it can be part of switching away from gas altogether and eliminating that bill.

As well as the convenience, you save money by not having to run your water for a long time while it heats up.

Heat pumps work well for large households of more than five people, offering greater cost savings, and about three times the energy efficiency of a conventional electric hot water heater since they just use electricity to drive the compressor and the fan.

Gas water heaters are widespread in Australia, making up approximately 48% of all water heaters installed in Aussie homes. 

While hot water heat pump systems generally cost more to buy than an ordinary gas system, they are cheaper to run and low in greenhouse gas emissions. 

An average 5-star energy-rated storage hot water system using natural gas will cost around $395 per year to run for an average three-person household, according to Sustainability Victoria.

In contrast, a high-efficiency hot water heat pump can do the same job for the same house for approximately $120 a year when using off-peak electricity. 

So, while the initial cost of a heat pump is typically higher than that of a gas hot water system, its lower running costs can save the average three-person household $275 per year – that’s an average saving of $4,125 over a 15-year lifespan.

Opting for a hot water heat pump can reduce more than just your electricity bills.

Gas hot water systems use either natural gas or Liquefied Petroleum Gas (LPG) to heat water, while hot water heat pumps are powered by electricity.

Comparing the same systems as above, a storage gas hot water system emits an average of 8.5 tonnes of greenhouse gasses over 10 years, while a high-efficiency hot water heat pump system emits around 4.1 tonnes.

In addition to the emissions released when the system is running, gas water heaters depend on a non-renewable resource that has already caused significant environmental damage before it ever reaches a house. In contrast, heat pumps are powered by electricity, whether it’s from your own solar panels or the grid.

Combining rooftop solar panels with a hot water heat pump can help you further reduce your emissions and save even more on your energy bills. By timing your heat pump around your solar generation, it can act as a type of battery:

  • Time your heat pump to power up around midday, when the sun is highest.
  • Your heat pump will store free solar energy in the form of hot water.
  • Your family can use hot solar-powered water any time they want, even when the sun isn’t shining.
  • This combination of time-shift and self-consumed energy will cut your electricity bills even more than just a solar system or a heat pump would on its own.

While a hot water heat pump system can cost more to install, the energy-saving and environmental benefits can make it a great option.

  • Heat losses

All storage systems lose some heat through the walls of the cylinder, known as the “standing losses”, and this is also the case with heat pump water heaters. This means they use energy even if you don’t use any hot water. The bigger the cylinder is, the more heat is lost. For small households, heat losses can add up to a high proportion of overall hot water energy use.

If you’re going to be away from your house for an extended period, switch the heat- pump water heater off at the switchboard to save energy.

  • Off-peak electricity tariff

If you want to operate the heat pump water heater on the cheaper off-peak electricity tariff, when it will mainly heat the water overnight, it’s important that the system is sized so the amount of water you heat overnight meets your daily needs. If it’s too small, you could run out of hot water.

  • Reheat rate

If you live in a cold climate and you use a lot of hot water, the reheat or recovery rate (litres per hour) will be important. This is affected by the:

  • design of the system
  • temperature and humidity of the ambient air
  • temperature of your cold water supply.

The reheat rate will be slower when the ambient air temperature is lower. Some systems have an electric boost element which comes on when the air temperature is low. This will decrease the time it takes to heat the water in the storage cylinder. But this will also make it more expensive to run.

  • Use the timer

Many heat-pump systems now come with an in-built timer, which can be used to control the time system is operating to heat water. This can be useful if you have a rooftop solar photovoltaic (PV) system to generate electricity. If you operate the heat pump water on a peak electricity tariff, you can set the timer to operate the system during the middle hours of the day to make use of the electricity generated by the sun.

  • Running costs

A heat-pump hot water system uses much less electricity than an electric storage hot water system. This is because it only uses electricity to drive the compressor and the fan, instead of using electricity to heat the water directly with an electric element.

These systems can be run on the cheaper off-peak electricity tariff overnight, if the cylinder is large enough. But it’s important to make sure the system is the right-size for your needs.

These systems can also run on a peak electricity tariff, which means they will heat water during the day as you use it.

If you have a rooftop photovoltaic (PV) system to generate electricity, it may be beneficial to operate a heat pump water heater on a peak electricity tariff, and limit the time that the water is heated to the middle part of the day using a timer. This will make better use of the electricity generated by the PV system, as it will reduce the amount of electricity that is exported to the grid.


Client Feedback & Reviews

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Li Deng
Li Deng
Gaz and his team have provided good service. Good work.
T Nguyen
T Nguyen
Great experience. Explained everything clearly and updated us every step of the way. We had our solar panels installed extremely fast. Thank you so much!
Sultan S
Sultan S
The team were brilliant from start to finish, they answered all my questions and made me feel confident that I was engaging with professionals who knew their stuff. They did all the paperwork and applications for me and offered and arranged a great finance package. The installer turned up early and was a joy to interact with. The app to monitor the system is easy to use and understand and I love being able to see how much clean energy I have generated.
David Chau
David Chau
Solar was was installed by Direct NRG. Work was completed efficiently, very neat and tidy by their electricians. Would highly recommend if seeking solar.
Brian Murrell
Brian Murrell
Alex and sparky with his two helpers were very obliging and had the job done and inspection organised super quick to get me up and running taking advantage of the summer sunshine. Thanks team Direct NRG.
Constantino Campanella
Constantino Campanella
Absolutely fabulous service from Alex & his team. Price, rebate assistance & finance application incredibly easy & great investment. The install team were very professional & left no mess. Very pleased to recommend Direct NRG to family and friends. Give Alex a call & discuss your needs.
afshaan nooreen
afshaan nooreen
Very professional service. Affordable prices, prompt and efficient service. Most importantly, they respect your time and accommodate your needs proficiently. Excellent customer service. Highly recommended 👍
Felicity Bowring
Felicity Bowring
My experience with NRG and our battery solar installation was an easy process. Very professional and super organized Alex has been an absolute legend in helping answer all our questions, call backs and honest help. Well done!
Paul Quixley
Paul Quixley
Just want to let everyone out there that's thinking of getting Solar and/or a Battery to not waste your time looking at other companies. Kaz and the team at Direct NRG can assist you in the right direction to get exactly what you need and to start saving you money on your electricity bills. Kaz was wonderful when it come to installation. He told me exactly when it was getting installed. Highly Recommended.