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Are Heat Pump Hot Water Systems Any Good?

Your hot water system could contribute as much as 25% of your energy bill. While you could install water-efficient fixtures around your home to reduce your hot water use, you could also consider a more efficient hot water system such as a heat pump.

Heat pump hot water systems aren’t a new technology. They’re definitely an underrated contender for energy-efficient and environmentally friendly water heaters though. You probably already have one or two heat pumps in your home already – your fridge and air conditioner!

There are a lot of considerations to be made about heat pumps and whether or not they’re worth it for your home. We’re going to outline these things and help you decide if a heat pump water heater is right for you.

How do Heat Pumps Work?

Before delving into the ins and outs of heat pumps and the variations, it helps to understand how they work first.

Heat pumps transfer heat from one medium to another, typically from the air and into your water. They pass a liquid refrigerant through an evaporator, causing it to become a gas. The refrigerant picks up heat energy from the air as it evaporates into a gas.

This gas is compressed which causes it to take on even more heat energy. It passes its heat energy on to the water, thus heating the water and cooling the gas. The now cool gas proceeds to an expansion valve where it condenses to a liquid again, ready to be reused.

Heat pump efficiency is largely dependent on the difference in the ambient temperature and the temperature of the water in the storage tank.

Electricity is required to power some components of the heat pump, thus this water heater is often called an electric heat pump. Despite this, they are more efficient than electric hot water systems.

Types of Heat Pump Hot Water Systems

As if there weren’t enough hot water system types already, there are even different types of heat pump hot water systems! They can be broken down into their energy sources and the type of unit.

Energy Source

Heat pumps can be categorised by where they source their heat energy, whether that’s from the air, ground or water. These are called air-source, water-source and geothermal heat pumps respectively. Air-source heat pumps work via the process explained above. Water-source and geothermal heat pumps work by a similar process, they just extract heat energy from a water source or the ground as opposed to the air.

Air-Source Heat Pumps

The most common heat pump type you will find in Australia is an air-source heat pump.

Many people don’t consider heat pumps if they live in a cold climate as they think their air is too cold. Air-source heat pumps might not work for colder climates that experience below-freezing temperatures frequently. Here in Australia, we’re lucky to rarely experience this kind of cold weather. Air-source heat pumps will work for most homes, and the refrigerants used are designed to work even at -10OC!

Geothermal Heat Pumps

Geothermal heat pumps are a good alternative to air-source heat pumps. While the air temperature might be below freezing, the temperature below the ground is much warmer and relatively constant.

Geothermal heat pumps will set you back more than an air-source pump initially. They are more efficient, however, and will save you money further down the line. As pipes are laid under the ground, they can be a great option for homes with minimal space as well.

Water-Source Heat Pumps

Water-source heat pumps can provide you with year-round hot water. Their main downside, however, is that it is uncommon for a home to have a large enough supply of ground-water available. If your home meets the requirement for a water-source heat pump, they can be an excellent option.

Air-Source vs. Geothermal vs. Water-Source

All three types of heat pumps can have the storage tank installed inside, while only the air-source heat pump can be outside. Air-source heat pumps have low output fluctuations with extreme outside temperatures, while water-source and geothermal have virtually no fluctuations.

Air-source heat pumps have the lowest upfront installation cost, but geothermal and water-source are more efficient. As most homes install air-source heat pumps, we will only be considering this source type from here on out.

Integrated or Split?

Air heat pumps can either come as one piece, called an integrated heat pump, or split. Integrated systems have the fan and evaporator mounted on the storage tank as a single unit. Split systems have the heat pump mechanism installed at a different location to the storage tank.

Split systems have the flexibility to be installed wherever it is more convenient and can be especially useful for those with limited outdoor space. Integrated systems are easier to install, however, and require less plumbing work to be done as the tank and pump mechanism are already connected.

Heat Pump Performance

When it comes to comparing heat pump performance to other hot water systems, we can look at the coefficient of performance (COP). Most heat pumps have a COP of three or more. This means that for every unit of energy put into a heat pump, it will pump out 3 units in return.

When compared to a typical resistive electric hot water system that has a COP of one or less, a heat pump is more than three times as efficient. Some heat pumps even have a COP of up to five!

As heat pumps’ efficiency varies with the ambient temperature, so too does their COP. When the outside temperature is warmer, the COP increases as it is easier to heat the water. This means that in winter it will be more difficult to heat your water, however.

COP is not measured consistently and so a better alternative for deciding if a heat pump will work for your home is the number of small-scale technology certificates (STCs) a particular heat pump earns in different climate zones.


Many refrigerants used for heat pumps have quite high global warming potential (GWP). If the refrigerant leaks it can pose quite a problem and must be disposed of appropriately.

The small quantities used for domestic heat pumps mean this is less of a problem. Newer systems are moving to low-GWP refrigerants like carbon dioxide and propane, however. Australia is also phasing out the use of these high-GWP refrigerants which will accelerate this process.

With this in mind, heat pumps are proving to be more and more promising as technology improves.

Boosting Options

Your heat pump works to heat water when it falls below a specified temperature. If it struggles to maintain this temperature during the colder months, electric booters can be installed. These will take over when your heat pump is struggling, so you have hot water all year round.

Are Heat Pumps Noisy?

Heat pumps can be a noisy hot water system. Many heat pumps have a decibel rating which can help you pick one based on how loud it is.

Many modern heat pumps are only slightly louder than a whisper though! If noise is a concern, your heat pump can be installed away from bedrooms and living rooms or can have a timer so it only works during your waking hours.

Rate of Recovery

If your home goes through a lot of hot water, the rate of recovery is an important metric for you to consider. This is the time it takes for your heat pump to reheat the tank of water when you’ve used it all.

You can find the recovery rate of a heat pump from the manufacturer, but some heat pumps are so efficient they can heat a 50L tank in only 15 minutes!

Heat Pump Hot Water System Cost

Heat pumps are one of the more costly hot water systems to install upfront, but their energy efficiency makes up this cost within 5-10 years of use. Once installed they have a very low running cost, second only to gas boosted solar hot water systems.

Heat pumps also qualify for STCs which can be exchanged for rebates on your heat pump! Some states in Australia offer even more incentives and rebates on top of this.

Environmental Impact

One of the major benefits of a heat pump is the environmental impact of using one. Heat pumps have a similar greenhouse gas emission to that of a gas hot water system. If you upgrade to a heat pump from a conventional electric water heater, your carbon footprint can be reduced by 70%! That’s equivalent to taking a passenger car off the road for 10 months.

For homes that aren’t able to install a rooftop solar hot water system due to limited roof space but still want a renewable water heater, heat pumps are the next best thing. They actually have a smaller carbon footprint than an electric boosted solar water heater in a cold climate!


When deciding if a heat pump is the right hot water system for your home, you’ll need to consider how the different types of heat pumps will work for your home, the upfront and ongoing costs, the environmental impact, how your family uses hot water and more. Want to read more? We have Hot Water Systems: The Complete Guide to help you out. Contact the Metropolitan Plumbing team to discuss heat pump options for your home.

Published: 22 Jun, 2020

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