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  • Writer's pictureLewis New

What is a Heat Pump Hot Water System?

Updated: Oct 15, 2023

As a plumber, people often ask me about heat pump hot water units. These units have become more popular recently. However, many people are unsure of how they work and if they are suitable for their home.

One reason for their recent popularity is the grants offered by the government of New South Wales. The incentive is part of the energy saving scheme. You can find more information about government grants here.

The financial incentive might be tempting for homeowners, but is a heat pump hot water system a good choice for everyone? Let's unpack some more information on these hot water systems so that you can understand the pros and cons.

How does a heat pump hot water system work?

A hot water heat pump system operates on the same principle as a refrigerator or an air conditioner. The heat pump pulls heat out of the air and transfers it into the water in the cylinder.

If you have spent any time researching heat pumps I'm sure you would have read that a thousand times. Let's look at it in detail.

Here are the basic steps:

  1. A fan draws the warm air into a device called an evaporator. This looks a lot like a radiator in a car.

  2. The refrigerant - a type of liquid - absorbs the heat in the air as it flows through the evaporator.

  3. The refrigerant moves into a compressor. As the refrigerant compresses, its temperature goes up.

  4. The hot refrigerant runs in a copper coil that sits in the water storage tank and heats the water.

  5. The refrigerant runs back up to the evaporator and starts the cycle again.

If you want to see this in action you can find a helpful video here

There are a few different configurations of heat pumps.

  1. The heat pump and the water cylinder are separate units and have piping between them to move the refrigerant.

  2. The heat pump unit is installed on top of the water cylinder and is installed as one unit.

  3. The heat pump unit is installed on top of the water cylinder and also has an electric element backup.

My personal preference would be the option with the electric element backup, we can look at why a little later on.

Advantages of heat pump hot water systems.

The key advantage of heat pump hot water systems are the reduced energy usage and the savings that go with them. The exact amount of energy saved will vary but generally manufacturers will claim savings of 60%-70%. Factors that impact energy efficiency include the model, climate, time of year and day, and the type of unit being compared.

There aren't many other advantages aside from energy consumption, but it's such an important factor that it is often enough reason to change over to a hot water heat pump.

Things to look out for

There are alot of different brands and types of heat pump units so it isn't fair to say that the disadvantages will apply to every unit. This section will just help you to understand the possible shortcomings and help you to choose the best unit.

Warranty and repairs.

Warranty is the most important thing to look into when buying a heat pump unit. The warranty period for heat pumps vary depending on the brand and the part of the unit. Companies usually offer separate warranty periods for the tank, compressor, and backup element. The warranty period for the tank will typically be the longest.

If the compressor or an element fails you should be able to repair the unit. If the tank fails you won't be able to repair it, you will need to replace the unit completely.

Heat pump tanks have warranties starting at about 5 years, while compressor warranties start at around 2 years. Most electric or gas hot water units have a tank warranty of 10-12 years. Some heat pumps have longer tank warranties so I would suggest looking into that before you decide on the best unit.

If you have to replace the unit more frequently, you will lose any potential savings from the energy efficient unit.

It's important to purchase from a well-established company in Australia so that if something does fail you will have repair parts available. Brands like Rheem, Rinnai, Therman and Dux are all stocked in popular plumbing supply shops like Reece and Tradelink, This means you are more likely to get repair parts when you need them. It also means that you are more likely to be able to get repair parts down the track because you know these companies are going to be around.


Another important thing to consider is who is able to service a heat pump unit. Most plumbers will be able to install a heat pump unit where the compressor and the tank are one unit but won't be able to install a unit where the compressor and tank are seperate.

Depending on the issue with the heater a plumber may not be able to repair it. if there is an issue with the compressor for example, you may need an aircon technician to repair it. While the unit is under warranty, it won't be a big problem. However, once the warranty ends, you might need several tradespeople to fix any problems that may arise.


This might be the biggest area of concern with heat pump units and the hardest to understand. As I said before, heat pumps take the ambient heat out of the air around it. This means that the efficiency of heat pump units varies depending on the temperature.

Most of the time this shouldn't be a problem except for during the coldest times of the year, unfortunately that is when you are going to want hot water the most.

I'll explain this using a few different hot water units.

If a family of four each took a 10-minute shower, they would use around 180 liters of hot water.

A standard 3.6 KW electric storage heater will recover 62 Liters every hour so within about 3 hours you will have a full tank of hot water again.

A heat pump unit will vary how quickly it can heat the water up depending on the temperature

Lets look at the Rheem MPi-325 as an example.

It will recover 35 Liters every hour if it is 19 degrees outside. This would take just over 5 hours to fill the tank up again after using 180 litres.

It will recover 28 liters every hour at 9 degrees ambient temperature. This would take about 6.5 hours to fill the tank up again.

As you can see the units become less efficient as the temperature drops. The good thing about this unit is that it has a backup element. Once the temperature drops below 5 degrees it will swap over to an electric element and keep heating. This is the main reason that I would highly recommend a unit that has an element backup.

If you pick a unit without a backup element, choose one with more water storage capacity. I suggest getting a unit with enough water storage for a whole day's use. In colder months, it might take all night to fully heat the tank.

$30 hot water systems.

Usually when something seems too good to be true that's because it is.

There are a few companies around who are offering something like a $30 hot water system replacement. The problem with these offers is that they are installing cheap units from overseas and have very limited after sales support. It is also very difficult to find replacement parts for these units once they break so most plumbers won't be able to repair them.

There may be legitimate companies that are offering heat pump hot water unit replacements as part of the government grant. I've heard many stories of plumbers removing near new water systems because homeowners have too many problems with them and are unable to get the company to repair the units.

I'm not saying you shouldn't choose one of these offers, I have spoken to some people who have installed one of these units and they are happy with it. However, look into the company and the specific product that they're offering before you buy.


Heat pump units have many great features, especially the new technology from major brands. It is important to know what to look for when choosing a unit. Check heater reviews and call a trustworthy local plumber for help in choosing the right unit for your needs. If you're in Sydney get in touch with Oakland Plumbing, we would be more than happy to point you in the right direction.

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