Heat Pump Hot Water Rebates in Australia (2026): State-by-State Guide

If you are looking at replacing an old electric or gas hot water system, the rebate side can be almost as confusing as choosing the heat pump itself.

There is no single Australia-wide rebate that every household receives. Most eligible heat pump hot water systems can access Small-scale Technology Certificates (STCs), and some states also offer separate discounts or support programs. What you can actually receive depends on the model you choose, where you live, the system you are replacing and how the installation is arranged.

The key isn’t the highest rebate amount shown in the ad, but rather the final installation price. The price should clearly list all discounts, as well as any additional fees that may apply.

First, understand the difference between STCs and state rebates

Many quotes group different incentives together under the word “rebate”. In practice, they can come from very different programs and have different rules.

STCs are not a fixed cash payment that automatically lands in your bank account after installation. If your system is eligible, you can either create the certificates yourself or assign the right to create them to a registered agent.

In most household installations, the second option is simpler. The installer or agent applies the value of the STCs as an upfront discount on the quote.

The number of STCs is not the same for every system. It can vary based on the model, installation location, installation date and current scheme rules. If a quote promotes a large “rebate”, ask the installer to explain exactly how much comes from STCs, how it was calculated and whether it has already been deducted from the final price.

You can check the official STC information from the Clean Energy Regulator and the register of eligible solar water heaters and air source heat pumps.

Which heat pump hot water systems may be eligible for STCs?

Not every heat pump hot water system is automatically eligible for STCs. Before you rely on a discount in a quote, the system generally needs to meet several requirements.

That usually includes:

• the exact model being listed on the Clean Energy Regulator register;
• the system being installed in the approved configuration;
• installation by appropriately licensed tradespeople;
• compliance with the relevant capacity and installation requirements; and
• the correct paperwork being completed as part of the installation process.

The key detail is the exact model number, not simply the brand name. The name shown in the official register may differ slightly from the name used in product marketing. If you cannot find the system you are considering, ask the retailer or installer for the model name and number used on the register.

NSW heat pump hot water incentives

In NSW, eligible households and small businesses may be able to access a hot water upgrade incentive through the Energy Savings Scheme. In many cases, the incentive is applied as an upfront discount through an installer participating in the program, rather than as a reimbursement after installation.

The NSW Government currently lists indicative discounts of:

• up to $640 when replacing an existing electric water heater with an eligible heat pump water heater; and
• up to $330 when replacing an existing gas water heater with an eligible heat pump water heater.

These are not guaranteed amounts. Your actual discount may vary depending on the product, installer, installation location, property layout, installation complexity and administration costs.

When comparing NSW quotes, ask:

1. Is the NSW hot water upgrade incentive included in this quote?
2. What is the discount amount, and how was it calculated?
3. Is the selected model eligible for both the NSW program and STCs?
4. What paperwork needs to be completed before installation?
5. What would the final installed price be if I were replacing an electric system versus a gas system?

One important point: the required paperwork generally needs to be completed before installation starts. Do not assume you can install the system first and apply for the incentive later.

For the latest eligibility criteria, amounts and process, refer to the NSW Government Hot Water Upgrade Incentive.

Victoria heat pump hot water rebates

Victoria’s Solar Homes Program offers support for eligible heat pump and solar hot water systems. Eligible households may receive a hot water rebate of up to $1,000. If you choose an eligible locally made product, the available rebate may be up to $1,400.

That does not mean every heat pump is eligible. Victoria has specific requirements around approved products, installers and installation conditions. These can include product-list eligibility, warranty requirements, refrigerant requirements and controls that help the system make use of daytime solar generation.

If you are comparing systems in Victoria, confirm:

• whether the exact model is on Solar Victoria’s current hot water product list;
• whether it qualifies for the standard rebate or the higher locally made product rebate;
• whether your property and household meet the eligibility criteria;
• whether the quote clearly shows the price before the rebate, the rebate amount and the balance you will pay; and
• whether any other state energy-efficiency support may apply, and whether it can be combined.

Check the current Solar Victoria Hot Water Rebate information and the eligible hot water product list before making a decision.

What about other states and territories?

Support changes regularly. Some programs apply statewide, while others are limited to specific postcodes, local council areas, household types or short-term community projects.

For that reason, it is best not to rely on an old article, a social-media post or a salesperson’s verbal estimate. Use the Australian Government’s Rebates and Assistance search tool to look for current programs based on your state, territory and upgrade type.

If you live in the ACT, it is also worth looking at finance options for home electrification. The Sustainable Household Scheme can include eligible heat pump hot water systems, although this is a finance arrangement rather than a direct rebate.

Why can two “rebate included” quotes still look very different?

Two quotes may both say “rebate included” but still have very different final prices. That is often because the difference is in the installation scope, not just the heat pump itself.

Ask for a written quote that separately lists:

• the heat pump brand, model and tank capacity;
• the STC discount and how it has been calculated;
• any state or local incentive;
• removal and disposal of the old hot water system;
• standard plumbing connections, valves, tempering valve and condensate drainage;
• electrical work, including a new circuit or switchboard upgrades if needed;
• equipment relocation, lifting, difficult access or extra pipework;
• Installation Labor, product warranty and installation warranty.

A detailed quote may not always be the cheapest quote, but it makes it much easier to understand what you are paying for and reduces the chance of unexpected costs later.

Do not choose a heat pump just because of the rebate

A rebate can make the upfront cost more manageable, but it should not be the only reason you choose a heat pump.

The right system still depends on your household’s hot water use, the tank size, local climate, installation location, available electrical capacity, noise considerations and the way your household uses electricity.

For example:

• If you have rooftop solar and can run the system during the day, a heat pump may help you use more of your own solar generation.
• In colder areas, check the unit’s operating range, electric booster behaviour and recovery time.
• If the system will sit close to a bedroom or a neighbour’s window, consider noise, airflow and access for servicing.
• If your household uses very little hot water, there may be less energy use to save and a longer payback period.
• If your current system is still relatively new and runs on a low-cost controlled-load tariff, it is worth comparing the cost of replacing it now against keeping it for longer.

Australian Government guidance notes that heat pump water heaters can use around 30% of the energy used by a conventional electric hot water system. Actual bill savings will still depend on your electricity tariff, hot water use, climate, system settings and how much daytime solar you can use. Read more in the Australian Government hot water guide.

Checklist before you accept a quote

Before you sign, work through these questions:

Check eligibility first, then compare the full installed price

A rebate can make the switch to a heat pump more affordable, but it should not be the deciding factor on its own. The lowest “after rebate” price is not always the best value if the system is the wrong size, the installation leaves out important work, or extra costs appear later.

Before you go ahead, check which support is available in your state and ask for a written quote that breaks down the system, installation work, STCs and any state incentive separately. That makes it much easier to compare like for like.

For a closer look at current support and eligibility, visit the PowerBay heat pump rebate page. You can also explore PowerBay heat pump hot water systems to compare the available options.

You May Also Be Wondering

Will the rebate be paid to me directly?

Usually, no. In many cases, the value of STCs or a state incentive is applied as a discount in the installer’s quote. Ask the installer to show the full price before discounts, each incentive applied, and the final amount you will pay.

Can I buy a heat pump myself and still receive support?

Possibly, but do not assume so. Some programs require the installer, retailer or certificate provider to be involved before the system is purchased or installed. Check the program rules first, especially if you are considering buying a unit online or arranging your own tradespeople.

What happens if an incentive cannot be approved after I accept the quote?

This should be clear before you sign. Ask the installer what happens if the STC value changes, a state incentive is unavailable, or your property does not meet the program requirements. A written quote should state whether you would need to pay the difference.

Should I keep the paperwork after installation?

Yes. Keep the final quote, invoice, product model details, warranty documents, compliance certificates and any incentive forms. They can be useful if you need to make a warranty claim, sell the property or clarify what was included in the installation.

Does having rooftop solar change the value of a heat pump?

It can. A heat pump that is scheduled to run during the middle of the day may use more of your own solar generation instead of buying electricity from the grid. Whether that makes a meaningful difference depends on your solar output, household usage and electricity tariff.

Can a landlord apply for heat pump hot water support?

It depends on the program. Some schemes include investment properties or landlords, while others are limited to owner-occupiers or have separate conditions. Check the current eligibility rules before arranging an installation.