Heat Pump Hot Water in Tasmania: Cost, Rebates and How It Compares With Solar Hot Water

Quick answer: a heat pump hot water system heats water by pulling warmth from the air, typically using 60–75% less electricity than an old electric storage tank in mild weather, and saving less on cold nights. In Tasmania it qualifies for the federal STC rebate, which comes off the price up front. Based on our own recent Tasmanian quotes, a heat pump installed in place of an old electric tank costs roughly $5,000–$9,000 after the rebate, depending on the brand and tank size. There is currently no separate Tasmanian state rebate for heat pumps. Paired with rooftop solar and a timer, much of your hot water can run on your own solar.

How much does a heat pump hot water system cost in Tasmania?

These are from quotes we wrote in 2026 for swapping an old electric storage tank for a heat pump in the same spot. They include the unit, electrician, plumber, removal of the old tank and GST, with the STC rebate taken off:

Heat pump	Tank	Typical installed price after the STC rebate
iStore	180 L	about $5,000
iStore	270 L	about $6,150
Sanden (cold-climate, CO₂ refrigerant)	250 L	about $8,200
Sanden	315 L	about $9,000

The lower-cost units are typically rated to about -5°C, so read the winter section below if you live somewhere frosty. Moving the unit to a new spot adds plumbing (about $1,100 more in our quotes), and replacing a gas system adds a gas fitter.

What moves the price:

Tank size and brand. A 180–270 L unit suits most smaller households, and larger families look at 300 L or more. Premium cold-climate units cost more but hold their performance better in frosty weather.
The plumbing job. Removing the old tank, and whether the new unit goes in the same spot or needs moving.
Electrical work. The circuit and, on older homes, switchboard work.

Is there a heat pump hot water rebate in Tasmania?

Yes, through the federal Small-scale Renewable Energy Scheme. Heat pumps create Small-scale Technology Certificates (STCs), and the installer takes their value off your price. A typical 250–280 L heat pump creates about 16–17 STCs in 2026, roughly $575–$680 off the price. Smaller units create fewer (our 180 L quotes carry 14). The number of certificates depends on the model and Tasmania’s climate zone, and the scheme reduces each year to 2030.

There is no Tasmanian state heat pump rebate in 2026, and the state’s interest-free Energy Saver Loan Scheme has closed to new applications. For every program that applies, see government solar rebates in Tasmania.

Do heat pumps work in a Tasmanian winter?

Yes, but choose the model for the climate. A heat pump gets less efficient as the air gets colder, and frost slows it down further. Models rated for cold climates keep heating well below freezing; some are rated to around -10°C, others only to about -5°C. In frost-prone areas (the Midlands, Central Highlands and inland North), look for a cold-climate rating, and site the unit out of the coldest, windiest spot.

Can a heat pump run on my solar panels?

Yes, and that is where the savings add up. Set the heat pump’s timer to run in the middle of the day, when your panels produce most. Each kilowatt-hour of solar it uses saves buying power: 17.02c/kWh off-peak on Tariff 93, or 27.95c on flat Tariff 31, against the 9.276c/kWh minimum you’d earn by exporting it (2026–27). On Tariff 93, a midday timer also keeps the heat pump out of the morning and evening peaks, when power costs 36.19c/kWh.

What about Tariff 41 and Tariff 62?

If your current hot water runs on Tariff 41 (the separately metered heating and hot water tariff), check the new wiring before you swap. Tariffs 31 and 41 closed to new connections on 30 June 2024, and Aurora says that once you switch to a different tariff you can’t go back to them. A heat pump on a Tariff 41 circuit (21.12c/kWh in 2026–27) is cheap to run, but doesn’t automatically use your daytime solar. One on your main circuit can, if it is on a timer.

Tariff 62 is a separately wired off-peak circuit that only gets power from 10pm to 7am, at 14.02c/kWh plus 23.37c a day (2026–27). It is Aurora’s cheapest standing rate and can sit alongside Tariff 93 or 32. The catch for a heat pump is that it can only run overnight, in the coldest hours, so it works less efficiently and can’t use your solar. Our Tariff 93 guide explains the tariffs.

What are the disadvantages of heat pump hot water?

Higher upfront cost than a basic electric tank, even after the STC rebate.
Noise. The fan and compressor hum like a small air conditioner, so don’t put it under a bedroom window.
Slower recovery than an element. A large household taking back-to-back showers needs a properly sized tank.
Cold-weather performance varies a lot between models (see above).
More parts to service than a plain tank, and repairs to the compressor and refrigerant system cost more.

Heat pump vs solar hot water: which is better in Tasmania?

	Heat pump	Solar hot water (roof collectors)
How it heats	Electricity plus heat from the air	Sunlight on roof collectors, with an electric or gas booster
Roof space	None	Uses roof space that could hold solar panels
Works with solar panels	Yes, run it on a midday timer	Separate system
Tasmanian winter	Good with a cold-climate model	Needs the booster more often on short, cloudy days
Rebate	STCs	STCs

For most Tasmanian homes with, or planning, rooftop solar panels, a heat pump is now the simpler choice: it doesn’t take up panel space, and solar panels plus a heat pump cover hot water and the rest of the house. Solar hot water still suits homes that would rather heat water straight from the sun than from grid electricity, though it still needs its booster on cloudy winter days. For the bigger picture, see solar for all-electric homes in Tasmania.

This guide is written by the Tasmanian solar team at Solar Generation Tasmania. Prices and rebate settings change, so check current figures for your own home.

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Published by Solar Generation Tasmania. General information current as at publication — rebates, tariffs and prices change, so confirm current figures before deciding.