How much is the heat pump hot water rebate?
By Sithum Imarsha Last reviewed
In 2026 a typical heat pump in Zone 4 earns 16 STCs, about $592 at $37 each. Replacing a gas system in Victoria takes off about $560 more (Victorian Energy Upgrades, hot water system discounts). A $4,500 heat pump plus $1,000 to switch from gas then costs you about $4,348.
Your result
Saved a year with a heat pump
$228
Gas storage tank: $635 a year. Heat pump, general rate (peak): $407 a year. Includes the gas supply charge you stop paying, — a year.
- You pay for the heat pump
- $4,348
- Pays back in
- 9.4 years
- STCs
- 16
- STC zone
- 4
- STC discount
- $592
- State rebate
- $560
- Extra over a like-for-like
- $2,148
From 1 March 2027, a gas hot water system that fails in an existing Victorian home must in most cases be replaced with electric (Official source).
A heat pump on controlled load heats overnight in the coldest air, so it works less well than the COP we use. Ask your installer about the model's recovery time.
— We used the general rate.
—
At these rates a heat pump does not cost less to run than your current system.
After rebates the heat pump costs no more than a like-for-like system, so it pays back at once.
Some models have no Zone 4 rating and get no STCs there. Check your model on the CER register.
Fix the highlighted field to update.
| System | Energy | Unit | Cost a year |
|---|---|---|---|
| Electric tank, general rate | 3,595 | kWh | $978 |
| Electric tank, controlled load | 3,595 | kWh | $620 |
| Gas storage tank | 16,634 | MJ | $635 |
| Instant gas | 13,937 | MJ | $532 |
| Heat pump, general rate | 1,498 | kWh | $407 |
| Heat pump, controlled load | 1,498 | kWh | $259 |
Each row heats 150 litres a day from 15 to 60 °C. The heat pump uses a COP of 2.4 (Estimate) for the STC zone of the capital city. Gas costs leave out the supply charge.
How we calculated this
- The heat a household needs comes from the litres of hot water a day and the temperature rise.
- Each system needs that heat divided by its efficiency, priced at its own rate.
- STCs and state rebates come off the price.
- If the old system still works, payback divides what you pay by the yearly saving.
- If it has failed, payback counts only the extra over a like-for-like replacement, because you would buy a new system anyway.
Full method, tables and sources: Heat pump hot water cost and rebate
Work out the heat your household needs
150 L a day: 3,595 kWh a year for an electric tank
Divide by each system's efficiency
Zone 4, COP 2.4: 1,498 kWh a year
Price a year
$635 now · $407 with a heat pump
Take off STCs and state rebates
16 STCs = $592 · state $560 · you pay $4,348
Work out the payback
$2,148 ÷ $228 a year = 9.4 years
The federal STC discount depends on your postcode zone and the year you install. NSW and Victoria add a state discount on top. This version starts with a failed gas storage tank in Victoria, so it shows the STCs, the Victorian Energy Upgrades discount and what you pay.
What we found
- Queensland: No state rebate found when we looked on 26 September 2026.
Official source
- From 1 January 2027 the deeming factor falls from 0.5 to 0.4, so a typical Zone 3 heat pump drops from 15 to 12 STCs.
- Victorian Energy Upgrades, hot water system discounts: about $630 off replacing an electric system and $560 replacing gas. You pay at least $200. Indicative, from the VEU page, 26 Sep 2026. Set by the VEEC certificate price, so it moves. Your provider's quote may differ. Any VIC household (renters too) replacing an existing system in a building at least 2 years old; up to 2 systems. Must be an approved product with a minimum 5-year warranty.
- Solar Homes hot water rebate (Solar Victoria): 50% of the product price after other discounts, up to $1,000 ($1,400 for locally made). Owner-occupier, combined income under $150,000, system at least 3 years old, property under $3M. Off unless you say you qualify.
- NSW Energy Savings Scheme, Hot Water Upgrade Incentive: up to $640 replacing an electric system and $330 replacing gas. Up to. Indicative only. Replace an existing system, nominate before install, minimum 5-year warranty. You pay a minimum amount (not stated).
Dated third-party source
- Installer pages still quote $800 to $1,200 off for STCs. At the 2026 factor a typical heat pump earns 12 to 16 STCs, about $444 to $592 at $37 each.
- The STC spot price was $39.90 in the week of 14 to 18 Sep 2026 (Ecovantage). We use $37, because installers pass on less than spot after their fees.
Want the running costs too? See the heat pump vs gas vs electric hot water calculator.
Questions
Why is the STC discount smaller than installers say?
A heat pump installed in 2026 gets 5 years of certificates, not 10, so the register count is multiplied by 0.5 (Clean Energy Regulator). Many installer pages still quote $800 to $1,200.
Does the rebate drop next year?
From 1 January 2027 the deeming factor falls from 0.5 to 0.4, so a typical Zone 3 heat pump drops from 15 to 12 STCs.
Is there a state rebate in Queensland or Western Australia?
Queensland: No state rebate found when we looked on 26 September 2026. Western Australia: No state rebate found when we looked on 26 September 2026. STCs only.
Can renters get it?
STCs, yes. The NSW Energy Savings Scheme is open to all NSW households, and Victorian Energy Upgrades to renters too. Solar Homes is for owner-occupiers only.
Do I get the rebate as cash?
No. STCs, the NSW Energy Savings Scheme and Victorian Energy Upgrades come off the installer's quote. Solar Homes is a rebate applied when you buy.