Heat Pump Hot Water Rebate: How the Federal STC Saves You Up to $1,000

Hot water is around 25% of an average Australian electricity bill. A heat pump hot water system can cut that by up to 75%, and the federal government will give you up to $1,000 off the install via the Small-Scale Technology Certificate (STC) scheme. Here’s how the rebate actually works, who qualifies, and what the real payback looks like in 2026.

What is a heat pump hot water system?

A heat pump uses the same technology as a reverse-cycle air conditioner — it extracts heat from the surrounding air and concentrates it into the water tank. It runs on electricity, but uses about a quarter of the power of a traditional electric storage tank to produce the same volume of hot water.

It’s not new technology. It’s been standard in Europe for two decades. What’s changed in Australia is that the federal STC rebate now subsidises it heavily, and a wave of high-quality, locally-warrantied units are on the market.

How much is the federal rebate worth?

The federal Small-Scale Technology Certificate (STC) rebate value depends on:

• Your postcode (different rebate zones across Australia).
• The unit’s rated capacity (which determines how many STCs are issued).
• The current STC market price (which fluctuates).

In 2026, the typical rebate for a residential heat pump replacement sits between $600 and $1,000. We confirm the exact figure for your postcode and chosen unit at the quote stage.

The rebate is applied as a point-of-sale discount — you don’t apply, we do, and you pay the rebated price.

What’s the real running cost vs. an electric tank?

A standard 315L electric storage tank in an Adelaide home uses around 3,000–4,000 kWh of electricity per year for hot water — that’s $750–$1,000 annually at typical 2026 grid tariffs.

A comparable heat pump uses around 800–1,000 kWh per year — that’s $200–$300 annually on grid power.

If you have solar and time the heat pump to run during your solar generation peak, the cost approaches zero.

What’s the payback?

After the federal STC rebate, a heat pump hot water install typically costs $1,800–$2,800 out of pocket. Annual savings versus an electric tank run $500–$800. Payback is usually 3–5 years; warranted lifespan is 6–10 years on the unit; many last longer.

If you’re replacing an old electric tank that’s about to die anyway, the math changes — you’d be spending money replacing it regardless. The incremental cost of a heat pump over a new electric tank is often $500–$1,000 after the rebate. At that math, payback is under 18 months.

Does it work in winter?

Yes. Heat pumps still extract heat from ambient air well below typical Australian winter overnight lows. Output efficiency dips slightly in cold weather — a unit rated COP 4.5 at 15°C might drop to COP 3.0 at 5°C — but at any of those points it’s still 3x more efficient than a resistive electric element.

For very cold climates (alpine NSW, Tasmania highlands) we choose models specifically rated for sub-zero performance.

How loud is it?

A modern heat pump unit runs quieter than a typical split-system air-conditioner condenser — around 45–55 dB at 1m. We position it to keep noise off bedroom walls and away from neighbour boundaries.

Does it pair with solar?

This is where heat pumps really shine. Most units include a timer or smart-grid input. Set the heat pump to run during your solar generation window (typically 10am–3pm) and it draws from your free solar instead of the grid. With solar, hot water becomes effectively free.

We configure the timer on install day so you don’t have to figure it out.

Which brands does eHomes install?

We install only models that:

• Hold current STC eligibility under the federal scheme.
• Have an Australian warranty desk (not international warranties only).
• Use refrigerants compliant with the upcoming F-gas phase-down.
• Have proven cold-weather performance for Australian conditions.

We confirm the specific unit options at the quote — the right model depends on your tank size, household occupancy, and install location.

Get the rebated price for your home

To find out the exact rebated price for your postcode and tank size, grab a free quote. We confirm eligibility, the right unit for your install location, and the rebated price upfront. We’re a Clean Energy Council Approved Retailer, so the rebate paperwork is handled in full.