In NSW, eligible households may receive an upfront discount when replacing an existing electric or gas water heater with an […]
For Sydney homeowners wanting to replace an old electric or gas hot water system, a heat pump can provide a more energy-efficient way to heat water while reducing ongoing energy use. According to NSW Government guidance, heat pump water heaters can cut hot water energy use by up to 75%, with potential energy-bill savings of 200–800 a year compared with a traditional system.
Eligible NSW households may also receive an upfront discount of up to $640 when replacing an electric water heater or $330 when replacing a gas water heater. The actual discount depends on the system, installation, and other factors.
At E-Green Electrical, we can help you make the upgrade and take advantage of these benefits. We begin by assessing your existing hot water system, household demand and installation requirements, then advise whether a heat pump is suitable for your home and which option best fits your needs. We also check your eligibility for the NSW hot water incentive and include any applicable discount in your quote.
Request a hot water upgrade assessment
Is It Time to Upgrade Your Hot Water System?
It is likely time to replace your hot water system if it is over 10 years old, leaking, producing rusty water or no longer providing enough hot water.
Ignoring these signs could leave you dealing with a sudden breakdown, repeated repair costs or water damage. You should act as quickly as possible, or otherwise have to deal with more serious consequences like a burst tank, major water damage or being left without hot water.
For more signs to look out for, see our dedicated hot water replacement guide.
Why Upgrade to Heat Pump Hot Water?
Upgrading to a heat pump hot water system can cut water heating energy use by up to 75% because it draws warmth from the surrounding air instead of creating heat directly.
That lower energy use can cut annual energy bills by $200 to $800 compared with a traditional hot water system, according to the NSW Government.
A heat pump can also reduce emissions and make better use of rooftop solar by heating water during the day when solar panels are generating electricity.
Newer heat pump systems can also reduce maintenance costs compared with older hot water systems because they are more efficient and reliable.
Can Your Existing System Be Replaced With a Heat Pump?
Yes, virtually any existing water heating setup can be replaced with a modern heat pump, provided there is adequate outdoor space and ventilation for proper airflow.
- Upgrading from electric storage
Replacing a conventional electric tank is a straightforward swap that connects directly to your existing hot and cold pipework. In most homes, the new unit reuses the existing dedicated electrical circuit without requiring switchboard upgrades, instantly slashing your water heating energy consumption by up to 75%.
- Upgrading from gas hot water
Switching from gas requires a licensed installer to safely cap off the gas supply and run a dedicated electrical line to the new location. While it involves setting up a basic condensate drain, eliminating gas entirely wipes out daily supply charges and significantly lowers your household’s overall carbon footprint.
- Replacing an older heat pump
Upgrading an aging heat pump is essentially a plug-and-play process because the electrical, plumbing, and drainage infrastructure are already in place. Modern units offer substantially quieter compressors, eco-friendly natural refrigerants (like R290 or CO2) that excel in freezing temperatures, and smart timers built to soak up surplus solar power.
| Existing System | What E Green Checks | Possible Replacement |
| Electric storage | Tank capacity, switchboard setup, plumbing condition and installation location | High efficiency heat pump |
| Gas hot water | Current system type, gas connection and capping requirements, plumbing layout and power supply location | Heat pump suited to the home |
| Older heat pump | System capacity, unit condition, existing controls, wiring and pipe connections | Modern natural refrigerant heat pump |
How E Green’s Hot Water Upgrade Service Works
- Send photos of your setup: Share your Sydney suburb, household size, and photos of your current tank and switchboard. We check rebate eligibility, airflow space, and switchboard capacity (fast-tracking failed systems).
- Get an upfront itemised quote: We calculate your NSW Government incentive upfront and detail any required gas capping, extra wiring, or pipe relocations before work begins.
- Installation & old tank removal: Our licensed team handles all plumbing and electrical work (7 am–4 pm, Mon–Fri), then disconnects, hauls away, and recycles your old system.
- Setup & solar optimization: We test the heat pump, explain basic controls, and program the internal timer to heat water using your free daytime solar power.
What Does a Heat Pump Hot Water Upgrade Cost in Sydney?
Our current best-selling heat pump systems start at $2,899 for Rinnai, $2,999 for Rheem and $3,799 for Reclaim. These prices include supply and installation under a standard upgrade scenario, where an existing outdoor electric element hot water system is replaced in the same position, and the electrical switchboard is compliant.
Your final price can vary depending on what is already installed at your home and whether additional work is needed. The quote can include:
| Cost | What it covers |
| Heat pump system | Your selected Rinnai, Rheem or Reclaim system |
| Installation | Plumbing, electrical connections and commissioning |
| Old system removal | Disconnection and removal of the existing unit |
| Site specific work | Additional electrical, plumbing, gas capping or relocation work where required |
| Eligible discount | Any applicable NSW hot water incentive |
A straightforward electric to heat pump replacement in the same position can cost less because the existing connections may already be suitable. Gas replacements can involve additional plumbing, electrical or gas work, so the final price depends on what your home requires.
We check this before installation and show any additional work and eligible discount in your quote.
What NSW Hot Water Upgrade Incentives Are Available?
The NSW Government currently provides an upfront discount for eligible heat pump and solar hot water installations through the Energy Savings Scheme.
For an eligible heat pump installation, the indicative discount is:
- Up to $640 when replacing an electric water heater
- Up to $330 when replacing a gas water heater
The important word is up to. These are not guaranteed amounts. The final discount can depend on the system selected, where it is installed, the installation work involved, and the installer.
The NSW Government also says the discount should be included in the quote rather than paid back to the homeowner later.
There is also the Home Energy Saver program. Eligible homeowners can currently apply for a zero-interest loan of up to $15,000 for approved energy upgrades. The NSW Government says the loan is available to homeowners or landlords who meet the program requirements, including the $210,000 combined taxable household income threshold for loans.
Which Heat Pump Is Right for Your Household?
The right heat pump depends on how much hot water your household uses, how much tank capacity you need, and where the system can be installed. We start by looking at your household size and daily hot water use to determine the tank capacity and recovery rate that will suit your needs.
We then consider the available installation space, local climate, and features such as noise levels, controls, and solar compatibility to narrow down the suitable options. From there, we recommend a model that matches your household demand and installation conditions, rather than simply choosing the largest or cheapest system.
We install and recommend heat pumps from brands including Rinnai, Rheem and Reclaim, giving us options for different household sizes, installation requirements and budgets.
A Recent Hot Water Upgrade for a Sydney Household by E-Green
Recent Project: Maroubra Hot Water Upgrade
When Sarah and Mark noticed their quarterly electricity bill hitting an eye-watering $1,150, they knew their 2012 electric storage tank was the main culprit. The old 250L unit had also started leaking, leaving their family of four with lukewarm showers during the morning rush.
They sent us photos of their switchboard and outdoor setup so we could check the site clearance and switchboard capacity. Within 24 hours, we confirmed a direct heat pump swap was suitable and applied a $640 upfront NSW Government incentive, bringing their out-of-pocket cost to $2,210.
Our team arrived at their Maroubra home on Tuesday morning. In less than four hours, we disconnected the leaking tank, completed the plumbing and electrical work, and installed a 270L high-efficiency heat pump. We also programmed the timer to run between 10 am and 3 pm, making better use of their existing 5kW rooftop solar system.
The result? The morning shower queue was no longer a battle. Sarah and Mark recorded a 72% drop in water heating electricity use, saving $235 on their first quarterly power bill.
Hot Water Upgrade FAQs
- Can I replace my gas hot water system with a heat pump?
Yes. We can replace an eligible gas hot water system with a high-efficiency heat pump, with up to $330 in upfront NSW Government incentives available. We handle all required work as part of the installation, including safe gas line capping, new electrical circuit wiring, and plumbing connections.
- Can a heat pump use the same location as my old electric tank?
Yes. We can usually install a new heat pump in the same footprint as an outdoor electric tank using your existing plumbing and electrical setup. Before installation, we verify that the space has sufficient physical clearance and airflow for the compressor to operate efficiently.
- How do I choose the right tank size?
We size your system around your household’s peak hot water demand and daily usage patterns rather than occupant headcount alone. Our range spans from 180L to 400L, ensuring we have the right capacity for smaller 1 to 2 person units through to high-demand, multi-bathroom family homes.
- How long will I be without hot water during the upgrade?
We typically complete a standard hot water replacement in a single visit lasting 3 to 5 hours. Your hot water is turned off only during the physical swap and is restored the same day, though timing can vary if switchboard upgrades, gas capping, or pipe relocations are needed.
- Does a heat pump work when it is cold?
Yes. Heat pumps extract heat from surrounding air even in cold weather, with modern systems operating efficiently at temperatures down to -5°C. Automatic defrost functions ensure consistent hot water output even on freezing winter mornings.
- Can I run a heat pump alongside rooftop solar?
Yes. Pairing a heat pump with rooftop solar is one of the best ways to cut daily power bills. We program your system’s timer to heat water during peak solar generation hours (typically 10 AM to 3 PM), allowing you to convert surplus daytime solar energy into stored hot water.
- What could increase the quoted installation price?
Site conditions like moving the tank location, upgrading an outdated switchboard, capping off gas lines, or extending pipework can add to the baseline installation cost. We review photos of your existing setup and switchboard beforehand so any additional work is detailed in your quote prior to installation day.
- Do we apply the NSW incentive directly to your quote?
Yes. Where your property qualifies, we apply the available rebate as an upfront discount on your quote—so you only pay the remaining out-of-pocket balance. Current indicative maximum discounts include up to $640 when replacing an electric resistance water heater and up to $330 when replacing a gas system.
Get a Heat Pump Upgrade Quote From E-Green Electrical
If your hot water system is leaking, over 10 years old, or driving up your power bills, you don’t have to settle for another high-running-cost unit. Upgrading to a modern heat pump is one of the fastest ways to cut your energy bills and lock in upfront NSW Government rebates.
To get an accurate, itemised quote with your eligible discounts applied, send us a few basic details:
- Your Sydney suburb
- Household size and hot water demand
- Current hot water system type (electric storage, gas, or older heat pump)
- Clear photos of your existing hot water unit and electrical switchboard
These details help us assess your existing setup and identify any installation requirements before we provide the quote.
Ready to get started? Fill out our online hot water quote form and attach your photos, or call our team directly on 1300 326 636 to talk through your upgrade today.
