According to YourHome, hot water systems are one of the biggest energy users in the home, using 21% of all energy consumption on average. This can greatly impact household energy bills, but installing an effective hot water system, like a heat pump or solar hot water system, can help keep costs down.
In addition to long-term water heating cost benefits, solar hot water and heat pumps can significantly reduce your initial investment thanks to generous government rebates. Learn more about solar hot water and heat pumps.
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Avoid confusion and maximise your rebates
The situation with solar hot water and heat pump rebates in Australia has been confusing, with chopping and changing state and federal government incentives. There are currently valuable rebates available Australia-wide, as well as in many states. There are three primary sources of hot water rebates or incentives available to Australians.
Federal Government financial incentives
Small-scale Technology Certificates (STCs)
The Australian federal government has administered the Small-Scale Renewable Energy Scheme (SRES) since 2001, whereby households and small businesses benefit from point-of-sale subsidies for small-scale renewable energy systems, such as solar hot water and heat pump hot water systems. This is achieved through creating Small-scale Technology Certificates (STCs). Each STC has a monetary value which can be credited to your installer in exchange for a point-of-sale solar rebate.
The SRES has seen millions of Australians save thousands on the cost of their small-scale solar PV systems, heat pumps, wind, hydro, and solar hot water systems.
State-by-state solar hot water and heat pump rebates overview
There are rebates available in some Australian states for solar hot water and heat pumps.
| State | Small-scale Technology Certificates | State Hot Water System Rebate (Solar Hot Water and Heat Pump System) | Other Rebate/Incentive |
|---|---|---|---|
| VIC | Yes | Solar Homes hot water rebate: up to $1,000 for eligible systems; from 1 July 2025, up to $1,400 for locally made/assembled systems | Victorian Energy Upgrades (VEU): incentives up to ~$1,860 for replacing inefficient electric systems. |
| SA | Yes | Through REPS (Retailer Energy Productivity Scheme): discounts on approved hot water upgrades via retailers. | City of Adelaide Sustainability Incentives: up to $1,000 for solar/heat pump hot water (for properties within Adelaide City). |
| ACT | Yes | No | ActewAGL upgrade programs: subsidised replacement of electric hot water systems with efficient heat pumps. |
| NSW | Yes | NSW heat pump hot water rebate | No separate statewide solar hot water rebate. |
| QLD | Yes | No | None (Queensland discontinued most hot-water-specific rebates; only STCs apply). |
| WA | Yes | No | None (no statewide hot water incentives beyond STCs). |
| TAS | Yes | No | None (Energy Saver Loan Scheme closed Sept 2025; no ongoing rebates). |
| NT | Yes | No | None (HBBS closed to new applicants and did not fund hot water systems). |
New South Wales solar hot water and heat pump rebates
Households in New South Wales can access incentives to upgrade to more energy-efficient hot water systems through the Energy Savings Scheme (ESS) and the Household Energy Saving Upgrades program.
Financial support
Eligible households can receive an upfront discount on installation when replacing older hot water systems with efficient alternatives. Incentives include:
Up to $640 when replacing an electric water heater with an air-source heat pump
Up to $330 when replacing a gas water heater with an air-source heat pump
These discounts are typically applied directly to the installation quote rather than paid as a rebate after purchase.
Accredited suppliers
Upgrades must be completed by Accredited Certificate Providers (ACPs) approved under the NSW Energy Savings Scheme. These providers manage the paperwork and apply the discount to the installation cost.
Eligible upgrades
The scheme supports several energy-efficiency upgrades, including:
Heat pump hot water systems
Solar hot water systems
High-efficiency air conditioners
Lighting upgrades
Pool pump upgrades
Application process
Households must arrange installation through an approved provider participating in the scheme. The installer confirms eligibility, applies the incentive to the quote, and completes the required documentation.
The program forms part of the NSW Government’s broader strategy to reduce household energy use and support the transition to more efficient electric appliances.
Victoria solar hot water and heat pump rebates
Solar Homes Program
Victoria offers rebates for both solar hot water and heat pump hot water systems through the Solar Homes Program, administered by the Victorian Government.
Hot water rebate
Eligible Victorian households can receive up to $1,000 when installing an approved solar hot water or heat pump hot water system. If the system selected contains eligible local content, the rebate may increase to up to $1,400.
The rebate covers up to 50% of the purchase price, capped at the maximum rebate amount.
Eligibility requirements
To qualify for the rebate, households generally must:
Be owner-occupiers of the property
Have a combined household taxable income under $210,000 per year
Own a property valued at under $3 million
Replace an existing hot water system that is at least three years old
Install a system listed on the Solar Victoria approved product list
The rebate is not available for new homes and applies to upgrades replacing an existing hot water system.
Application process
To access the rebate, households must obtain a quote from a Solar Victoria authorised retailer. The retailer submits the quote through the Solar Victoria portal and manages the installation once the rebate is approved.
The Solar Homes Program is part of Victoria’s broader effort to reduce household energy costs and support the transition to more energy-efficient electric appliances, including heat pump hot water systems.
Victorian Energy Upgrade (VEU) Scheme
All Victorian households and businesses that have an inefficient electric or gas hot water system are eligible to participate in this scheme. To receive a discount or rebate on an upgrade to your hot water system, you must engage with an accredited provider. The accredited providers can use their tradesperson (if they have any available) to install the hot water system and work with a tradesperson of your choice to install the hot water system.
To be eligible to upgrade your hot water system and get a discount/rebate, you must:
- be a Victorian household or business
- have an inefficient electric or gas hot water system.
Discounts or solar hot water rebates are based on the certificate price and the average efficiency of products improved under the program. Its factors include:
- certificate price
- type of LED
- the number of products replaced
- location,
- installation costs and administrative costs by accredited providers.
For more information, please click here.
South Australia solar hot water and heat pump rebates
Retailer Energy Productivity Scheme (REPS)
The Retailer Energy Productivity Scheme (REPS) is a South Australian initiative requiring certain energy retailers to provide incentives to households and businesses to reduce energy consumption and improve efficiency. The incentives may take the form of discounts, free or reduced-price energy-efficient products (like LED lighting, water-saving showerheads, efficient hot water systems), vouchers, or other help. For batteries / Virtual Power Plant (VPP) connection, there is a rebate up to about AU$2,050, depending on battery size and whether you meet eligibility conditions.
Eligibility includes using authorised or accredited providers, meeting product/installation standards, and for non-priority households a nominal site fee (e.g. ~$33) may apply. Priority Group households (those with concession cards, health cards, etc., or referred by financial counsellors) may get more benefit or more supports.
The scheme is not strictly about fixed rebate amounts for particular premises (like “$300 for gas-connected, $1,000 for non-gas”); actual amounts depend on the specific activity, product, household type, and retailer / provider offers. Documentation and compliance are required, but the form and detail can vary.
Adelaide City Council's Sustainability Incentives Scheme
The Adelaide City Council’s Sustainability Incentives Scheme offers rebates to encourage residents to adopt more sustainable practices and technologies. Here are some key details about the rebates available for hot water systems:
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Eligible systems: Rebates are available for replacing electric instantaneous and storage systems with gas-boosted solar, heat pump-boosted solar, or heat pump hot water systems. Additionally, adding solar thermal to existing systems or installing new solar or heat pump hot water systems in new developments is also eligible.
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Rebate amount: The rebate covers 25% of the installed cost up to a maximum of $1,000.
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Additional rebates: If you live within Adelaide city limits, you may be eligible for an additional rebate of up to $800 on top of the Small-Scale Technology Certificates (STCs) rebate, potentially bringing the total rebate to $2,000.
To apply for these rebates, you’ll need to check the eligibility criteria and submit an application through the Adelaide City Council’s SmartyGrants portal.
Tasmania solar hot water and heat pump rebates
Energy Saver Loan Scheme
The Tasmania Energy Saver Loan Scheme is a program designed to help households, small businesses, and not-for-profit organisations reduce their energy consumption and save on energy bills by providing interest-free loans for purchasing and installing energy-efficient products. Here are some key details about the scheme:
Loan amount: Eligible applicants can receive loans ranging from $500 to $10,000.
Repayment terms: Loans can be repaid over a period of 1 to 3 years with fortnightly repayments.
Eligible products: The scheme covers a variety of energy-efficient products, including solar PV systems, battery storage systems, reverse cycle air conditioning, hot water systems (heat pump and solar), induction and ceramic stove tops, energy-efficient white goods, double glazing, and insulation.
Application process: To apply, you need to find an accredited supplier through the Brighte Marketplace, get a quote, and then apply for the loan through Brighte. The loan funds are paid directly to the chosen supplier, and repayments are made to Brighte.
Eligibility: The scheme is open to residential households, landlords of residential properties, small businesses, and not-for-profit organisations. Eligibility criteria apply, and you can check your eligibility on the Brighte website.
The Energy Saver Loan Scheme aims to make it easier for Tasmanians to invest in energy-efficient upgrades, ultimately leading to lower energy bills and a more sustainable future.
Australian Capital Territory solar hot water and heat pump rebates
Home Energy Support Program
In the Australian Capital Territory (ACT), there are rebates available for solar hot water and heat pump hot water systems through the Home Energy Support Program. Here are the details:
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Solar hot water systems: Households can receive rebates of 50% of the total cost, up to $2,500, for installing eligible solar hot water systems.
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Heat pump hot Water systems: Similar rebates are available for heat pump hot water systems, covering 50% of the total cost, up to $2,500.
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Additional rebates: If you’re eligible for other rebates, such as the Household Energy Upgrades Fund, you can combine these with the Home Energy Support Program rebates to further reduce costs.
To be eligible, you must be a resident of the ACT, hold an eligible concession card, and attend a free online workshop. You can also combine these rebates with a zero-interest loan of up to $10,000 to help with the remaining cost.
Queensland solar hot water and heat pump rebates
There are currently NO state solar hot water or heat pump rebates or incentives for Queensland.
Northern Territory solar hot water and heat pump rebates
There are currently NO state solar hot water or heat pump rebates or incentives for the Northern Territory.
Western Australia solar hot water and heat pump rebates
There are currently NO state solar hot water or heat pump rebates or incentives for Western Australia.
Exploring your options for solar hot water and heat pump hot water
At Energy Matters, we offer a variety of solar hot water and heat pump solutions to suit different household needs and budgets. Whether you’re looking for a compact unit for a small apartment or a high-capacity system for a large family, our solar expert team can help you find the perfect heat pump hot water service. We also provide information on integrating your heat pump hot water system with other renewable energy solutions.
Solar heat pump hot water
Solar heat pump hot water systems are smart for households looking to reduce energy use without compromising on hot water access. These systems use ambient air to heat water efficiently, even in colder climates, making them ideal for a wide range of Australian conditions. Learn how heat pump technology compares to traditional options and whether it’s eligible for rebates in your area.
Solar hot water panels
Are you curious about how solar water heating systems work? Explore the role of solar hot water panels in capturing and converting the sun’s energy into reliable, low-cost hot water for your home. This guide breaks down the technology and performance benefits of panel-based systems, helping you make an informed decision.
Contact Energy Matters today for solar expert advice and find the ideal solution for your hot water needs. Our team can help you get up to 3 FREE solar quotes from pre-qualified and vetted solar firms in your area.
Energy Matters has been recognised for our continued excellence in the Australian solar industry. We provide our customers with high-quality resources, insight, and access to reputable solar quotes.
