Heat Pump Hot Water Rebate

With hot water making up about a fifth of most households’ energy costs, you might want to consider switching from electricity or gas to energy efficient heat pump hot water systems. Moving to an energy efficient hot water heat pump can save you $250 a year on energy bills. To assist you make the move to energy efficient systems, heat pump hot water rebates of up to $2600 are available on eligible heat pumps and solar hot water systems in Victoria. There are three different types of rebates to help with the costs of installing a new energy efficient heat pump hot water system.  Read on to find out more about heat pump hot water rebates, the types available, eligibility requirements, and how to apply to start saving money on your energy bills today.

What Is A Heat Pump Hot Water Rebate?

A heat pump hot water rebate is a financial incentive to encourage you to invest in renewable energy resources. The heat pump hot water rebate is an amount of money that is taken off your upfront cost of buying and installing an energy efficient heat pump hot water system. Rebates apply if you are eligible and are installing a heat pump hot water system in a new home or replacing an existing system. The rebate is not a cashback amount but a percentage that is paid directly to your retailer and deducted from your invoice. Once the system is installed, you pay the remaining balance.

Heat Pump Hot Water Rebates in Victoria

When installing a new heat pump hot water system, there are three available rebates in Victoria, through the Federal Government, Solar Victoria, and the Victorian Energy Upgrades program. We explain the three heat pump hot water rebates here:

1. 1. Federal Heat Pump Rebate (STCs)
      The Federal Government offers renewable energy certificates called Small scale technology certificates (STCs) as a rebate for installing heat pump hot water systems.  As part of the Government’s Renewable Energy Target, heat pumps qualify for these small scale technology certificates as they contribute towards the energy efficient target and reduce carbon emissions. These certificates are like ‘energy tokens’ that can be either traded or sold but most customers apply them directly off the cost of the system. The installing company can claim the STCs on your behalf and offer you a discount on the upfront cost of the system which will be displayed on your quote. 

      STC Rate For Heat Pump Hot Water Systems:
      It is important to understand that STCs are not a fixed price. The rate is determined according to things like location, type of technology used, system size and model. The biggest factor determining the STC rate is type of system and location. Less STCs are generated in warmer climates where it takes less energy to heat the water. The Clean Energy Regulator has divided Australia into 5 zones for different rebate values. The higher the zone number, the higher the STC rate. 

      Eligibility for STC rebate:

      To be eligible for the STC rebate from the Federal Government, you must meet these criteria.

      • The heat pump hot water system must be approved by the Clean Energy Regulator.
      • The  STCs must be created within 12 months of the installation.
      • Installation must be carried out by a Clean Energy Council accredited designer and installer.
      • Installations in new and existing homes are eligible.
      • STCs can only be claimed by the owner of the solar or heat pump hot water system.
   2. Victorian Energy Upgrades Program
      This program was designed to help Victorians upgrade to energy efficient products by offering discounts and rebates. Similarly to the federal government’s STCs, this program offers Victorian Energy Efficiency Certificates (VEECs) when you upgrade to a heat pump hot water system. Each VEEC is equivalent to 1 tonne of  greenhouse gas prevented from entering the atmosphere. An installer will need to get evidence of your existing hot water system that they will decommission as part of the upgrade to determine the VEECs value that can be applied. The VEECs are only available to those upgrading from electric storage hot water systems or gas instantaneous or storage systems. The rebate value depends on the system being replaced. 

      Eligibility for VEEC rebate:

      To be eligible for the VEEC rebate, the following criteria must be met:

      • VEEC certificates must be created through new installations that deliver energy savings.
      • VEEC certificates must be carried out by an accredited person.
      • VEEC certificates must be claimed by June 30 of the year following the year of installation.
   3. Solar Victoria’s Heat Pump Hot Water Rebate
      With Solar Victoria’s Heat Pump Hot Water Rebate, if you are eligible you can receive a 50% discount on the cost of the hot water system after other rebates have been deducted. This rebate from Solar Victoria is paid directly to the installer who will then pass on a point of sale discount to you, reducing the upfront cost of the unit and installation. This means you could save up to $1000 when upgrading to a heat pump hot water system. 

      Eligibility for Solar Victoria Heat Pump Hot Water Rebate:

      To be eligible for 50% off your heat pump hot water system, this criteria must be met:

      • Must be owner occupiers of the home of installation.
      • Must have a combined taxable income of less than $210,000 per year.
      • Property must be valued under $3million.
      • The property address must not already have received a Victorian hot water rebate.
      • The hot water system being replaced must be at least 3 years old.
      • The system must be installed by an accredited installer.

Eligible Heat Pump Hot Water Systems

With a good understanding of the rebates available for upgrading to a heat pump hot water system, it  is important to examine the types of hot water systems that meet the criteria for the rebate. There are two systems that fit into this category –  hot water heat pumps and solar hot water.  Both heat pumps and solar hot water systems are low in greenhouse gas emissions and cheaper to run compared to other electric and gas systems. We look at both systems to help you decide which is the best for your home.

Hot water heat pumps

A heat pump  system is one of the lowest emitters of greenhouse emissions and one of the cheapest to run. Compared to electric storage systems, they use about one third of the electricity to run. Heat pump systems have a heat pump unit and a storage tank. Like a reverse cycle air conditioner, a heat pump extracts heat from the air and then transfers it into the water storage tank. Heat pump water heaters cost more to buy than electric or gas systems, but save energy, reduce energy bills, and are eligible for heat pump hot water rebates.

If you decide to go for a hot water heat pump, they do make some noise which is usually about the same volume as traffic. Most customers find hot water heat pumps more budget friendly than solar hot water, electric or gas systems.

Solar hot water systems

Solar hot water systems rely on the sun to heat the water and are a free source of natural energy. Unlike solar panels on a roof that provide electricity in a home, solar hot water systems contain copper tubes that collect the water which is then heated in the sunlight. The water is then sent to the storage tank where it is heated by one solar panel. The water solar panels can only heat water and not power anything else. 

For those considering solar hot water systems, you will need to make sure you have space for a tank and heat pump. The upfront cost will be more than heat pump hot water, electric or gas, but the rebates can reduce the cost significantly. 

How To Apply For Heat Pump Hot Water Rebate

Once you have looked at the types of rebates available and decided on the type of heat pump hot water system you would like, it is time to apply for the heat pump hot water rebate. Follow these steps towards potential savings of thousands of dollars on your new system.

1. Contact an authorised retailer. The team at Simplyair are authorised retailers that can assist with choosing and installing a heat pump hot water system.
2. Choose a system. Choose a system from the approved products list.
3. Get a written quote. The retailer will provide the written quotes and upload them to the rebate portal.
4. Get pre-approval. Organise pre-approval of finance if required.
5. Prove eligibility. Make sure you fit the eligibility criteria and upload any document proof to the rebate portal
6. Receive approval. Receive approval of the rebate from the various departments.
7. Install the system. The system must be installed within 120 days of rebate approval.
8. Pay the difference. When the system has been installed you will be invoiced, and will need to pay the difference to the retailer, minus the rebates.

Upgrading to a heat pump hot water system is a great way to save money and help the environment. However, the cost to upgrade may be a significant deterrent. Luckily in Victoria, there are three rebates available to take the pressure off when you want to install more energy efficient hot water systems. In this article we have explained how the rebates work, how to apply and potential savings to help you decide on the right heat pump hot water system for your home. The friendly team at Simplyair can guide you through the process and help you decide the best course of action for your circumstances.