Heat pump hot water systems have matured a lot in recent years after a troubled introduction in Australia that left many homeowners wary. It’s unfortunate, because these systems are extremely economical — they can cut running costs by up to around 75% compared with standard electric or LPG gas hot water systems. However, as with any product, you get what you pay for; bargain-basement heat pumps typically use inferior components, and their low price usually reflects poorer build quality.
Through the mid‑2000s to about 2015, several major hot water manufacturers released heat pump models that performed very poorly. When government rebates for solar and heat pumps encouraged households to move away from old electric tanks, and regulations pushed new homes toward solar, gas or heat pump hot water, many companies rushed designs to market and made questionable engineering choices that compromised reliability.
Even today there are substandard heat pumps being sold by high‑pressure sales outfits, as well as cheaper no‑name imported units that struggle in Australian conditions and disappoint customers over time.
If you recognise that lower price often means lower‑grade parts, it’s worth noting the price gap between cheap no‑name heat pumps and reputable brands isn’t always huge, while the electricity savings from switching from a gas or conventional electric water heater to a proper heat pump are significant.
Call us on 1300 728 122 for completely unbiased, honest advice about which systems perform well and which to avoid.
Below I explain how heat pumps work and outline the main system types. The simplest way to picture a heat pump is to compare it to a refrigerator running in reverse: where a fridge extracts heat from inside and expels hot air, a heat pump extracts heat from the air and rejects colder air. Similar to feeling warm air blown from an air‑conditioning unit, a heat pump water heater blows out cooler air while it captures warmth to heat water via heat exchangers or internal coils in the storage tank. A typical heat pump uses roughly 1 kW of electrical input for what a conventional electric element would need about 4 kW — about 75% less energy.
Heat pump hot water systems draw heat from the surrounding air and transfer it to the water, which is why they’re sometimes called air‑sourced solar hot water heaters. They run on electricity but are roughly three times more efficient than standard element‑type electric water heaters. In suitable environments they reduce energy use, save you money and lower greenhouse gas emissions — and they pair very effectively with rooftop solar PV because they require relatively low electrical demand (typically around 1 kW versus about 3.6 kW for a standard electric heater).
How does a heat pump work?
A heat pump operates on the same basic principles as an air conditioner or refrigerator, but instead of removing heat to cool a space, it transfers heat into the water via pipes or coils that are immersed in or wrapped around the storage tank. Some designs circulate tank water through a heating plate before returning it to the tank. Electricity drives a compressor that pumps refrigerant through the system; the refrigerant absorbs heat from the air and then transfers that heat into the water.
Heat pumps rely on a refrigerant that evaporates at low temperatures.
The process typically follows these steps:
– A liquid refrigerant passes through an evaporator where it absorbs heat from the air and vaporises.
– The refrigerant vapour is compressed by an electric compressor; compression raises its temperature so it becomes hotter than the tank water.
– The hot vapour enters a condenser, gives up its heat to the water and condenses back to a liquid.
– The liquid refrigerant moves through an expansion valve, where pressure drops and the refrigerant cools before returning to the evaporator to repeat the cycle.
Unlike a conventional electric resistance water heater that uses electricity to generate heat directly in the water, a heat pump uses electricity to run the compressor and fan while transferring a much larger amount of heat energy from the air into the water, which is what makes it so efficient. The volume of heat transferred depends on ambient temperature.
When the outside air is warmer than the cold refrigerant, the heat pump can absorb and move heat into the water efficiently. Higher external temperatures make the system easier to run and more efficient; colder conditions reduce the amount of heat available, which is why heat pumps are less effective in very cold climates. Some manufacturers now produce heat pumps capable of operating at sub‑zero temperatures; these units can sometimes be installed indoors (for example in a large ventilated garage) if space allows.
To continuously absorb heat, the evaporator requires a steady supply of fresh air, so a fan forces airflow through the unit and expels the cooler air to the atmosphere.
Heat pump water heaters come in two main configurations:
– Integrated/compact units where the compressor and storage tank are combined into a single system.
– Split systems where the tank and compressor are separate (like a split air conditioner) and connected by refrigerant lines.
