Heat Pump Hot Water in Melbourne (2026): cost, rebates and what to know
By PumpSwap. Updated 30 September 2026. How we check
A heat pump hot water system in Melbourne costs $2,000 - $5,000 installed once rebates come off, from $3,600 - $6,600 before them. At Victorian energy prices a four-person home pays about $338 a year to run it, against $761 for gas storage. That saves about $423 a year against gas storage, so the extra cost over a like-for-like gas swap is paid back in roughly 2.4 years at these averages. About 80% of Melbourne homes are on mains gas, which is why this decision reaches most of the city.
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$2,000 - $5,000
modelled installed price after Victorian rebates
$338 a year
to run, four-person home, at 31c/kWh
80%
of Melbourne homes on mains gas
The Melbourne gas deadline
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 electric alternative. This applies to owner-occupied homes and rentals. New homes must be all-electric from January 2027. Victorian Government, electric and efficiency standards for buildings
Are heat pumps worth it in Melbourne?
The case rests on running cost. A heat pump moves heat from the air instead of making it, so it uses a fraction of the electricity of an element. At Victorian energy prices (31c/kWh electricity, 3.6c/MJ gas), a four-person Melbourne home that uses about 200 litres of hot water a day pays roughly:
| System | Running cost a year | Installed cost |
|---|---|---|
| Heat pump | $338 | $2,000 - $5,000 after rebates |
| Gas storage | $761 | $1,200 - $3,500 |
| Electric storage | $1,315 | $800 - $2,500 |
That saves about $423 a year against gas storage, so the extra cost over a like-for-like gas swap is paid back in roughly 2.4 years at these averages.
In July, usually the coldest month, Melbourne averages a minimum of 7.5°C at the Bureau of Meteorology's Melbourne (Olympic Park) station, and in January a maximum of 26.8°C. That station's record runs from 2013, so it is a 13-year average. Most winter nights stay well above freezing, where a heat pump keeps most of its efficiency. Bureau of Meteorology, climate statistics for Melbourne (Olympic Park)
Running costs are PumpSwap's model at Victorian average tariffs, for a 45°C temperature rise and a heat pump coefficient of performance of 3.5. Your tariff and usage will move the numbers.
What a hot water system costs installed in Melbourne (2026)
| System | Installed, before rebates | Rebates |
|---|---|---|
| Heat pump | $3,600 - $6,600; $2,000 - $5,000 after rebates | Federal STCs plus Victorian schemes |
| Electric storage | $800 - $2,500 | None |
| Gas storage | $1,200 - $3,500 | None |
| Gas continuous flow | $1,500 - $3,000 | None |
| Solar hot water | $4,000 - $7,500; $3,500 - $6,000 after STCs | Federal STCs |
National installed bands for the other systems come from the two 2026 cost guides in the sources below. The heat pump figures are PumpSwap's modelled prices for Melbourne, and they move across the city: the inner suburbs and the growth corridors do not price the same job alike.
Modelled heat pump prices across Melbourne
| Suburb | After rebates |
|---|---|
| Tarneit | $2,000 - $4,000 |
| Point Cook | $2,100 - $4,100 |
| Craigieburn | $2,100 - $4,000 |
| Clyde North | $2,100 - $4,000 |
| Berwick | $2,200 - $4,200 |
| Melbourne CBD | $2,500 - $4,800 |
| Reservoir | $2,100 - $4,100 |
| Pakenham | $2,100 - $4,100 |
| Melton | $2,100 - $4,100 |
| Truganina | $2,000 - $4,000 |
Heat pump rebates for Melbourne households
In Victoria, three discounts can stack on a heat pump hot water system installed in 2026: the federal STC discount (typically $500 to $800), a Victorian Energy Upgrades (VEU) discount of up to $630 when replacing electric or up to $560 when replacing gas, and, if you qualify, the Solar Victoria hot water rebate of 50% of the price after those discounts, up to $1,000 or up to $1,400 for a locally made product. All three come off the invoice rather than being claimed back later.
The federal STC discount is typically $500 to $800 for a 2026 install and steps down every 1 January until 2030. Melbourne postcodes are in Clean Energy Regulator zone 4 for air source heat pumps. On the regulator's register the same model earns more certificates in zone 4 than in zone 3, which covers Sydney, Brisbane, Adelaide and Perth. Clean Energy Regulator, postcode zones for solar water heaters and heat pumps
Victorian heat pump rebates: who qualifies, how to claim, and what is changing →Heat pump brands sold in Melbourne
Installed prices before rebates, from PumpSwap's model. Warranty years are the maker's tank and compressor terms; noise is the quietest model's rated level. Brands on Solar Victoria's locally made list qualify for the higher $1,400 rebate tier.
| Brand | Installed, before rebates | Warranty (tank / compressor) | Sizes | Noise | $1,400 tier |
|---|---|---|---|---|---|
| MideaChina | $2,500 - $4,100 | 5 / 5 years | 170, 200, 280L | 50 dB | No |
| EmeraldAustralia | $2,750 - $3,750 | 7 / 5 years | 220, 270, 320L | 49 dB | No |
| iStoreAustralia | $2,800 - $4,400 | 5 / 5 years | 180, 270L | 49 dB | No |
| ChromagenIsrael | $2,800 - $4,200 | 5 / 5 years | 170, 235, 280L | 48 dB | No |
| HaierChina | $3,000 - $3,650 | 7 / 5 years | 195, 246, 330L | 43 dB | No |
| ApricusAustralia | $3,000 - $3,250 | 6 / 6 years | 260L | 43 dB | No |
| RheemAustralia | $3,200 - $4,800 | 10 / 5 years | 180, 270L | 47 dB | Yes |
| QuantumAustralia | $3,250 - $4,450 | 5 / 2 years | 150, 200, 270, 340L | 48 dB | No |
| DuxAustralia | $3,300 - $3,850 | 7 / 3 years | 200, 270, 285L | Not published | Yes |
| RinnaiJapan/Australia | $3,350 - $6,000 | 7 / 5 years | 250, 280, 340L | 45 dB | Yes |
| Stiebel EltronGermany | $3,500 - $5,000 | 5 / 5 years | 302L | 44 dB | No |
| DaikinJapan | $5,500 - $8,500 | 10 / 10 years | 250, 315L | 40 dB | No |
| SandenJapan | $6,500 - $8,000 | 15 / 6 years | 250, 315L | 37 dB | Yes |
| Reclaim EnergyAustralia | $6,600 - $8,000 | 10 / 5 years | 315L | 37 dB | Yes |
What Melbourne throws at a heat pump
Cold mornings. In cold weather the unit draws less heat from the air and works harder, and many models switch on an electric boost element on the coldest mornings, so a winter bill runs above the annual average given earlier. Melbourne also sits in a colder federal climate zone than Sydney or Brisbane, so the same model earns more certificates here.
Noise, and your neighbours. Melbourne blocks sit close together, and the outdoor unit is a small compressor and fan: each brand's quietest model is rated between 37 dB and 50 dB, on the makers' own figures. It runs in bursts to reheat the tank, so position it away from bedrooms and a neighbour's windows, and set it to run in the day if you have solar. Victoria's Environment Protection Regulations 2021 put hot water systems and heat pumps in a group that must not be heard inside a habitable room of a neighbour's home before 7am or after 10pm on weekdays, or before 9am or after 10pm on weekends and public holidays. EPA Victoria, residential noise
Water quality. Melbourne's water is soft. Melbourne Water reports hardness of 9 to 38 mg/L across its storage reservoirs, so scale is rarely a problem for tanks here. Melbourne Water, water quality testing
Space, and the terrace problem. Most units are a single tank with the heat pump on top, taller than the gas or electric tank they replace. On an inner-Melbourne terrace or a townhouse with a narrow side passage, a split system that puts the compressor beside the tank is often the only thing that fits.
Recovery time. A heat pump reheats a tank more slowly than gas, which is why sizing matters: a 270L or 315L tank suits most three to four person homes, and larger homes go bigger rather than relying on the boost element.
Beware of Melbourne quotes that look too cheap
Because rebates come off the price, Melbourne sees advertised "from" prices that leave out half the job. Before comparing quotes, check each one covers:
- removing and disposing of the old system, and capping the gas line if you are leaving gas
- any electrical work, including a new circuit if the switchboard needs one
- a tempering valve and the pipework changes for a new tank position
- a base or pad for the unit, and the outdoor position that keeps noise away from bedrooms
- every rebate as its own line, with the model's certificate count, so you can see what was assigned to the installer
Two installers quoting the same model can differ by more than the rebate. That is why PumpSwap sends your request to up to 3 local installers rather than showing one price.
Who can install a heat pump in Melbourne
In Victoria a heated water service is water supply work under the Plumbing Regulations 2018, so it must be done by a licensed or registered plumber. Disconnecting and reconnecting the electrical supply needs either a licensed electrician or a plumber holding a Restricted Electrical Worker's licence, and a Certificate of Electrical Safety is issued for that work. Building and Plumbing Commission Victoria, water supply work and Energy Safe Victoria, restricted electrical workers licence
Melbourne heat pump questions
How much does a heat pump hot water system cost in Melbourne?
$2,000 - $5,000 installed after rebates, across the 287 Melbourne suburbs PumpSwap prices, and $3,600 - $6,600 before rebates. The spread comes from the tank size, whether the old system is gas or electric, and how hard the install is. These are PumpSwap's modelled prices, not quotes.
What heat pump rebates can a Melbourne household get?
In Victoria, three discounts can stack on a heat pump hot water system installed in 2026: the federal STC discount (typically $500 to $800), a Victorian Energy Upgrades (VEU) discount of up to $630 when replacing electric or up to $560 when replacing gas, and, if you qualify, the Solar Victoria hot water rebate of 50% of the price after those discounts, up to $1,000 or up to $1,400 for a locally made product. All three come off the invoice rather than being claimed back later. The federal STC discount is typically $500 to $800 for a 2026 install and steps down every 1 January until 2030. Melbourne postcodes are in Clean Energy Regulator zone 4 for air source heat pumps. On the regulator's register the same model earns more certificates in zone 4 than in zone 3, which covers Sydney, Brisbane, Adelaide and Perth.
Does a heat pump hot water system work through a Melbourne winter?
Yes. In July, usually the coldest month, Melbourne averages a minimum of 7.5°C at the Bureau of Meteorology's Melbourne (Olympic Park) station, and in January a maximum of 26.8°C. That station's record runs from 2013, so it is a 13-year average. Most winter nights stay well above freezing, where a heat pump keeps most of its efficiency. In cold weather the unit draws less heat from the air and works harder, and many models switch on an electric boost element on the coldest mornings, so winter running costs sit above the annual average.
What does one cost to run in Melbourne?
About $338 a year for a four-person household at Victorian average tariffs of 31c a kWh, against roughly $761 for gas storage and $1,315 for old electric storage.
How noisy is the outdoor unit on a Melbourne block?
Across the brands sold here, each brand's quietest model is rated between 37 dB and 50 dB, on the makers' own figures. Makers measure at different distances, so treat the numbers as a guide rather than a like-for-like ranking. On a narrow Melbourne block the position matters more than the rating: the unit runs in bursts to reheat the tank, so keep it away from bedroom and neighbour windows. Victoria's Environment Protection Regulations 2021 put hot water systems and heat pumps in a group that must not be heard inside a habitable room of a neighbour's home before 7am or after 10pm on weekdays, or before 9am or after 10pm on weekends and public holidays.
Who is allowed to install one in Melbourne?
In Victoria a heated water service is water supply work under the Plumbing Regulations 2018, so it must be done by a licensed or registered plumber. Disconnecting and reconnecting the electrical supply needs either a licensed electrician or a plumber holding a Restricted Electrical Worker's licence, and a Certificate of Electrical Safety is issued for that work.
What is changing for gas hot water in Melbourne?
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 electric alternative. This applies to owner-occupied homes and rentals. New homes must be all-electric from January 2027.
Does Melbourne water affect the tank?
Melbourne's water is soft. Melbourne Water reports hardness of 9 to 38 mg/L across its storage reservoirs, so scale is rarely a problem for tanks here.
Sources
- Tempco Energy 2026 installation cost guide (checked 16 September 2026)
- What's The Damage hot water cost index (September 2026) (checked 16 September 2026)
- Bureau of Meteorology, climate statistics for Melbourne (Olympic Park) (checked 23 September 2026)
- Clean Energy Regulator, postcode zones for solar water heaters and heat pumps (checked 23 September 2026)
- EPA Victoria, residential noise (checked 23 September 2026)
- Melbourne Water, water quality testing (checked 23 September 2026)
- Building and Plumbing Commission Victoria, water supply work (checked 23 September 2026)
- Energy Safe Victoria, restricted electrical workers licence (checked 23 September 2026)
- Victorian Government, electric and efficiency standards for buildings (checked 23 September 2026)
- Solar Victoria Hot Water Rebate, official page (checked 21 September 2026)
- Victorian Energy Upgrades (VEU) Certificates, official page (checked 21 September 2026)
- PumpSwap, heat pump hot water across Victoria (the statewide guide, including Geelong, Ballarat and Bendigo)
- PumpSwap, Victorian heat pump rebates (every scheme with its official source)
Heat pump guides for Victoria
Melbourne suburbs
287 Melbourne suburbs with local installed prices for electric, gas and heat pump systems. Outside the metro area, see the Victorian guide.
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