Hot Water
Heat pump vs gas hot water
Compare running costs, efficiency and the role of rooftop solar.
Replace an ageing gas or electric system with a heat pump, installed by licensed electricians and plumbers. Eligible Victorian households can stack incentives worth up to $2,800. $0 upfront finance is available for approved applicants.
AEU replaces inefficient gas and electric hot water systems with high-efficiency heat pumps, with up to $3,200 in rebates and incentives taken straight off your invoice.
If your system has failed, we can usually organise a replacement within a day.
Most installers offer 5 years — if they’re still operating to honour it. AEU backs every residential installation for three full decades — solar, battery, hot water, heating & cooling and EV chargers.
Hot water is usually the second-largest line on a Victorian energy bill. Below is what a four-person household spends each year on each type of system, and the reason the numbers differ so much.
You pay a daily supply charge whether you use gas or not, then pay again to burn it. Both parts have risen every year since 2021.
No supply charge, but an element can only ever turn one kilowatt of power into one kilowatt of heat. There is no efficiency left to find.
A heat pump doesn't make heat, it moves it — pulling warmth out of the outside air. That returns about four kilowatts of heat for every one it draws.
We supply and install Australia's best heat pump hot water systems. Every brand chosen for efficiency, reliability and warranty support.
Tank size should reflect how your household uses hot water, not how many rooms it has. Four people showering one after another at seven need more recovery than six spread across the day.

Ideal for 1–3 person households. Runs on just 900W, up to 4× more efficient than conventional electric. Designed to run on your solar generation.

Built for households of 3–4. Continuous supply through the morning peak. Whisper-quiet. Smart timer to sync with your solar. Full rebate eligible.

For households of 4–5. Maximum capacity and continuous hot water. Solar-ready and fully rebate eligible.
Check your eligibility for hot water rebates in 60 seconds — free, no obligation, applied up front.
AEU checks which incentives your property can access and applies eligible discounts before you pay the balance. The final amount depends on your household, property, product, installation date and the certificates created.
Eligible owner-occupiers receive 50% of the purchase price after other discounts, up to $1,000 — or up to $1,400 for a product on the current locally made list. From 1 July 2026, the combined household income cap is $150,000. It is calculated after STCs and VEECs, and applies to existing properties only.
An eligible replacement may also receive a VEEC-based VEU discount of up to $750. There is no income test, and it applies at invoice with pre-approval. It is delivered through an accredited provider and stacks with both the Solar Victoria rebate and federal STCs.
Eligible heat pumps create federal STCs worth up to $650, usually assigned to a registered agent for an upfront discount. Value varies by model, postcode and installation date. We assign them for you and take the value off the price rather than you claiming it back later.
Solar Victoria rebates do not apply in NSW. Eligible customers may access the Energy Savings Scheme hot water incentive, with the Peak Demand Reduction Scheme alongside it, plus federal STCs.
Give us your postcode and we'll tell you which of these you qualify for, and the exact dollar figure that comes off your invoice.
Homeowners choose AEU for clear communication and for systems sized to what they actually use.
Jon was my POC throughout my solar and battery installation process and he was fantastic. Very prompt, communicative and went above and beyond to get me installed. Very happy with my experience.
Extremely happy with my experience installing solar & batteries with Australian Energy Upgrades. Jon and all the crew were a pleasure to deal with and very knowledgeable and helpful in all aspects of the installation. Would highly recommend.
From the moment I first contacted Australian Energy Upgrades I was in good hands navigating the complexities of a home solar battery installation. Thanks to Jon, Dean and the team for a smooth and professional experience.
Very happy with the service and delivery. We originally were quoted from another provider, but after speaking to Jon and the team we ended up with a much better solution. Would recommend to anyone considering adding solar and battery to your home.
We had an electric heat pump installed. Chris and the team were fantastic. He explained the options, then everything was organised quickly and efficiently, with excellent communication throughout the process. The old gas system was replaced and taken away. There was no mess at all.
Great experience overall! It was effortless to get a competitive quote, followed by a stress free installation of the hot water heat pump, then a new heating and cooling system and later solar panels and battery. The team were quick to respond and flexible with installation dates.
Extremely happy with Australian Energy Upgrades. We upgraded from a gas hot water system to an Emerald heat pump. Joe and Josh were very helpful and responsive during the grant application process. The plumber and electrician that installed the unit were timely, efficient and their work was spot on.
My wife spoke with several companies and these guys offered the best deal but also came across as the most professional. Great communication all the way through. Would highly recommend to anyone looking to either get solar for the first time or to upgrade their old system. Derek was an amazing point of contact and really helpful.
We were impressed with the honest and professional appraisal Jon provided. He took the time to put together a quality system for our needs and outcomes that we required. Thanks to Jon and his team we are confident that the system will future proof our property. We have no hesitation in recommending Australian Energy Upgrades to anyone.
Jon arrived as arranged and was straight to the point. He fully explained what we required to meet our demands — no sales pressure and left us to consider. Nick and his team are very professional and helpful. Their workmanship was nothing short of perfect. I fully recommend Australian Energy Upgrades.
We did our research with multiple companies before we chose AEU but Derek was just so thorough and knowledgeable and honest he made the decision easy in the end. Our contractor on the day of install was Tim and he was fantastic. I highly recommend this organisation.
Really happy with my recent installation of a new Sigenergy battery from Australian Energy Upgrades. Professional throughout and a speedy process. Special thanks to Jon for making things quick and easy during the sales phase and for Tim on install.
Timely and quality job by Australian Energy Upgrades. Sales consultant Jon was good for organising a variety of quotes to ensure we ended up with a system that suited. Installers completed 13.3kw system, battery and whole home blackout protection in one day and to a high standard.
Jon was my POC throughout my solar and battery installation process and he was fantastic. Very prompt, communicative and went above and beyond to get me installed. Very happy with my experience.
Extremely happy with my experience installing solar & batteries with Australian Energy Upgrades. Jon and all the crew were a pleasure to deal with and very knowledgeable and helpful in all aspects of the installation. Would highly recommend.
From the moment I first contacted Australian Energy Upgrades I was in good hands navigating the complexities of a home solar battery installation. Thanks to Jon, Dean and the team for a smooth and professional experience.
Very happy with the service and delivery. We originally were quoted from another provider, but after speaking to Jon and the team we ended up with a much better solution. Would recommend to anyone considering adding solar and battery to your home.
We had an electric heat pump installed. Chris and the team were fantastic. He explained the options, then everything was organised quickly and efficiently, with excellent communication throughout the process. The old gas system was replaced and taken away. There was no mess at all.
Great experience overall! It was effortless to get a competitive quote, followed by a stress free installation of the hot water heat pump, then a new heating and cooling system and later solar panels and battery. The team were quick to respond and flexible with installation dates.
Extremely happy with Australian Energy Upgrades. We upgraded from a gas hot water system to an Emerald heat pump. Joe and Josh were very helpful and responsive during the grant application process. The plumber and electrician that installed the unit were timely, efficient and their work was spot on.
My wife spoke with several companies and these guys offered the best deal but also came across as the most professional. Great communication all the way through. Would highly recommend to anyone looking to either get solar for the first time or to upgrade their old system. Derek was an amazing point of contact and really helpful.
We were impressed with the honest and professional appraisal Jon provided. He took the time to put together a quality system for our needs and outcomes that we required. Thanks to Jon and his team we are confident that the system will future proof our property. We have no hesitation in recommending Australian Energy Upgrades to anyone.
Jon arrived as arranged and was straight to the point. He fully explained what we required to meet our demands — no sales pressure and left us to consider. Nick and his team are very professional and helpful. Their workmanship was nothing short of perfect. I fully recommend Australian Energy Upgrades.
We did our research with multiple companies before we chose AEU but Derek was just so thorough and knowledgeable and honest he made the decision easy in the end. Our contractor on the day of install was Tim and he was fantastic. I highly recommend this organisation.
Really happy with my recent installation of a new Sigenergy battery from Australian Energy Upgrades. Professional throughout and a speedy process. Special thanks to Jon for making things quick and easy during the sales phase and for Tim on install.
Timely and quality job by Australian Energy Upgrades. Sales consultant Jon was good for organising a variety of quotes to ensure we ended up with a system that suited. Installers completed 13.3kw system, battery and whole home blackout protection in one day and to a high standard.
Australian Energy Upgrades was founded in 2017 by two brothers, one of them a licensed electrical contractor. As a family-owned business, AEU has worked in the energy industry since 2014 and still runs out of North Geelong. Assessment, rebate, paperwork, installation and after-sales support sit with the same team, so advice comes from the property rather than a script.
Recent installs across Melbourne, Geelong and regional Victoria, each captioned with the suburb, tank size and brand installed. This is useful if you want to see how a similar changeover was mounted before you commit.
Emergency replacements are prioritised — we confirm what you have, what fits the space and which rebates still apply, then fit it same or next day. A failure doesn't cost you the incentives.
AEU is an approved Solar Victoria retailer for hot water and solar, and a Registered Electrical Contractor (REC 23631). The business also holds CM3 certification, Solar Accreditation Australia credentials and New Energy Tech Consumer Code approval.

Authorised by the Victorian Government to deliver hot water heat pump rebates directly at point of sale — your incentives processed correctly, every time.

Licensed by EnergySafe Victoria. Every installation is completed by a licensed electrician — legally certified, compliant and safe.

Independently verified work health & safety management — required by Australia's largest commercial clients before any contractor sets foot on site.

Factory-trained and certified by Tesla to design and install Powerwall systems — required to maintain the full manufacturer warranty.

Solar Accreditation Australia — the national standard for system design and installation. Required to access government incentives on your behalf.

Signatory to Australia's consumer protection code — bound by transparent pricing, fair contracts and honest sales practices by law.
Hot Water
Compare running costs, efficiency and the role of rooftop solar.
Government Rebates
Solar Victoria, VEU discounts and federal STCs, and why a certificate discount is not a fixed rebate.
Hot Water
What to collect before an old system fails, and how the emergency rebate process works.
Emerald. AEU integrated heat pumps in several capacities, commonly with five-year whole-of-system and two-year labour warranties.
iStore. We installed integrated systems built for efficient electric hot water and solar-aware operation.
Rheem. An established manufacturer with several heat pump models currently on the locally made list.
Rinnai. Widely recognised manufacturer, with many heat pump models currently listed as locally made.
Reclaim Energy. Premium CO₂ systems with glass-lined and stainless-steel tanks and many listed locally made models. Selected listings show ten- or fifteen-year tank warranties.
From 1 March 2027, if a gas hot water appliance in an existing home breaks and cannot be repaired, it must be replaced with an efficient electric alternative such as a heat pump.
The rule does not force anyone off gas. You can keep a working system for its full service life; repairs and servicing carry on as normal, and it does not touch gas cooktops or space heating.
So, if your system is aging, the replacement you make after March 2027 will be electric either way. The only real choice is whether you plan it or a breakdown plans it for you. DEECA estimates that an efficient electric system saves up to $400 a year, or $590 with solar.
Two criteria tend to catch people out for the Solar Victoria hot water rebate. You must be the owner-occupier of an existing property, with combined owner income under $150,000, property value under $3 million, no previous hot water or solar battery rebate at the address, and a system at least three years old.
Rentals and new builds are not eligible.
Unlike the VEU discount, this rebate needs pre-approval. Your retailer uploads a quote, and you supply ID and proof of income. Solar Victoria issues a QR code your installer scans on site before work starts, and installation must be completed within 120 days.
The Solar Victoria rebate is calculated after other discounts, including STCs and VEECs — so an eligible locally made system can receive up to $2,800 in total support, or up to $2,400 for other eligible products.
A hot water heat pump pulls warmth out of the surrounding air and moves it into water stored in an insulated tank. It runs on the same principle as a reverse-cycle air conditioner: a compressor and fan doing the work instead of an electric element. That is why it uses roughly a third of the energy. The trade-offs, however, are physical: heat pumps need airflow, they make some noise, and they slow down in the cold.
Sustainability Victoria’s July 2025 comparison found that heat pump water heaters typically use 60–75% less electricity than conventional electric systems. Your bill saving depends on the system replaced, hot water use, tariff, climate, timer settings and rooftop solar.
In Sustainability Victoria’s July 2025 comparison, a four-person Melbourne household with an eligible 20-STC heat pump has estimated running costs of about $200 on off-peak, $275 on peak without solar, or approximately $35–$75 when timed to run on rooftop solar. The same household on conventional electric storage was estimated at about $1,015 on peak. Comparative estimates are based on mid-2025 tariffs and are not guaranteed results.
AEU can compare your current system with an efficient heat pump and explain the assumptions behind your personalised estimate.
Tank size follows how many people are in the house and when they shower, not the size of the old unit. As a guide, 160–200L suits one to three people, 250–280L suits three or four, and 315–400L suits four or more. A heat pump reheats more slowly than gas, so the tank has to carry the morning peak on its own — if everyone showers before eight, size up rather than down.
Gas storage, gas instantaneous (continuous flow), electric resistance storage, electric instantaneous and solar hot water with electric boost all qualify for an upgrade. If you already have a heat pump there is nothing to upgrade. Not sure what you have? Send us a photo of the unit and we will identify it.
Up to $1,000 for an eligible product, or up to $1,400 for a model on the current locally made list, calculated as 50% of the purchase price after other discounts. An eligible household may also receive a VEU discount of up to $750 and federal STCs of up to $650, bringing combined support to as much as $2,800.
Owner-occupiers of an existing Victorian home, where the rebate hasn’t been claimed at that address before. Rentals and new builds are excluded from the Solar Victoria hot water rebate, though federal STCs still apply to those properties. Not sure? We run the eligibility check for you — free, no obligation.
Yes. Solar Victoria has an emergency pathway, so if your system has broken down or is unsafe, you do not have to wait for pre-approval. You still have to use an authorised retailer and an eligible product and prove eligibility later. It is best to check the criteria before the truck arrives, as you cannot receive the rebate if the claim is submitted retrospectively.
We can usually organise an emergency hot water replacement within a day. Call 1300 996 917 and we will confirm what you currently have, what fits the space, and which rebates still apply.
Yes, as long as the model suits the site. They keep working in the cold, but recovery slows as the air temperature drops. Not every unit is rated for places that regularly fall below 5°C, which matters more in locations such as Ballarat or the Dandenongs than in inner suburbs such as Brunswick.
It depends heavily on tank material and local water quality. When you compare brands, check what each warranty covers: the tank, the heat pump unit and the labour are often warranted for very different periods. The headline number is usually the longest of the three.
Your installation and your appliance warranty are separate. Product warranties are issued by the manufacturer and vary by brand, model, tank material and component. AEU provides the applicable warranty document before installation. Any system installed under a Solar Victoria rebate carries a minimum five-year whole-of-product warranty.
AEU’s own 30-year workmanship guarantee covers the installation work itself — the plumbing, the electrical and the mounting.
Keep the air intake clear and listen out for anything that sounds different. Beyond that, follow the manufacturer’s service schedule. Skipping it can void the warranty.
Two to four hours for a straight swap, or longer if you move the unit, change pipework or upgrade the switchboard. Your quote should reflect this accurately before the day.
Yes, and it is the cheapest way to run one. Set the timer to heat in the middle of the day, and the tank becomes a form of storage by holding your own generation as hot water instead of exporting it.
A modern unit runs at roughly 40–50 decibels — about the level of a fridge compressor — and only while heating, which you can schedule for daylight hours. It needs outdoor airflow and to sit clear of bedroom windows and boundaries. We check placement and setbacks on site before quoting.
Yes. Heat pumps transfer heat from the air rather than generating it through combustion or resistance, so they need far less electricity and produce fewer emissions. Pair one with rooftop solar and your hot water runs on near-zero carbon energy. Modern units also use low-GWP refrigerants.
It’s simple. Here’s how it works with AEU:
AEU completes residential heat pump hot water installation across metropolitan Melbourne, Greater Geelong, Ballarat, Bendigo, the Latrobe Valley, Colac and the Surf Coast, plus Albury–Wodonga, Wagga Wagga and Deniliquin in southern New South Wales.
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Free assessment for heat pump hot water. Rebates up front. No paperwork on your end.