The cost of a heat pump hot water unit can be confusing. A number of factors affect the price you pay including the unit you select, the installation and various government rebates.
We have seen new units supplied and installed from as low as $33 to as high as $9,000. It's safe to say customers will get what they pay for a $33 unit, and unfortunately we'd suggest people paying $9,000 have been exploited.
The market can be broadly divided as follows:
- Cheap and cheerful - say under $1,000
- Mid-range - Aquatech, iStore, Emerald, say $1,500 to $3,500
- The Rolls Royce - Reclaim and Sanden, $4k to $6k+
Please note, and I cannot stress this enough, these prices are a guide only. Prices vary widely from state to state and I can just hear some people at home saying "tsk tsk, I got an Emerald for $800, this guy doesn't know what he's talking about." Please take this article as a guide only.
The aim of this article is to explain the various components of your heat pump hot water quote and how they will affect the price you pay.
Let's jump into each of the factors that affect the price you will pay.
1. The Heat Pump Hot Water Unit
This is straightforward - the price of the new heat pump hot water unit sold by the manufacturer.
Hot tip: you can see on a number of websites that the price of the unit is more than the price of the unit installed - how can that be? Rebates. Beautiful rebates. When a unit is installed, the installer claims the rebates on behalf of the customer and passes on the discount. More below...
2. Installation
Both a plumber and electrician are usually required to install a heat pump hot water unit.
The plumber comes in first, disconnects the old unit, removes it and brings in the new unit. When replacing gas storage and electric storage units, this is straightforward as it's generally a like-for-like swap - the new unit is a similar shape and size to the old unit. It can be a little difficult where we replace instant gas hot water, as instant units are usually mounted on the side of the house and there may not be adequate space for the new unit. If there's not enough space, we'll need to find another spot and re-plumb to the new spot. The price you pay will be higher if you require a 'relocation.'
An electrician will come in after the plumber and wire the new unit usually directly to the switchboard. Wiring to the switchboard can be a little cumbersome if there's no clear path either straight to the switchboard, through the roof or under the house. Costs will increase for double storey houses and where the unit is a long way from the switchboard. We also need to check there is space on the switchboard for a dedicated circuit. If not, we'll need to update the switchboard which adds further costs.
We suggest typically allowing around $1,500 for a 'standard' installation - a like-for-like swap where the new unit fits easily and electrical run is straightforward. Installation can be lower however, especially where the unit is close to an electricity supply.
3. Incentives & Rebates
The cost of the unit is equal to supply (1) + installation (2).
Now the good news - the discounts.
The discounts for heat pump hot water units come in the form of state and federal rebates and incentives.
The federal incentives are STCs. STCs are small-scale technology certificates equal to 1 megawatt hour of renewable electricity either generated or displaced by eligible systems. STCs create a financial incentive to install these systems by reducing the upfront installation costs. Eligible systems including solar, wind and hydro and heat pumps.
State rebates and incentives vary considerably. Victoria has generous rebates in the form of VEECs and the Solar Hot Water $1,000 rebate. NSW has ESCs.
Installers usually take care of rebates for you. They should clearly outline the discounts applied to your quote and then claim the rebates on your behalf. Usually you won't need to do much, other than sign an "assignment form" which transfers your right to claim to them (which they effectively pay you for through a discounted quote).
Customers can claim rebates themselves, but it is ill-advised for the following reasons:
- If you claim the rewards, you still need to sell them. For example, it's one thing to claim the STCs from the Clean Energy Regulator, but you'll still need to sell them. If STCs are typically sold in 5,000 lots, you might struggle to find a buyer for 23 STCs.
- Groups that help you claim rebates from the regulators often get better pricing as they are dealing in greater volumes. Then again, they'll take a clip
- You'll need to love paperwork
Summary
The price of heat pump hot water units varies depending on which state you are in, the unit you want installed and the complexity of the installation. I hope this article makes it easier to understand the factors that affect the price you will pay for a heat pump hot water unit.
