Heat pump water heaters are about to face their first mandatory heat pump efficiency rules in Australia. Public consultation on the federal government’s draft standard closed on 5 October 2026, leaving the final rules as the next step.
It’s a significant change for a fast-growing appliance. Water heating accounts for about a quarter of household energy use in Australia, and heat pumps now make up around 12% of hot water system sales, according to the government’s Consultation Regulation Impact Statement. Yet there has never been a legal minimum for how efficient they must be.
The proposed rules would set an efficiency floor, require products to be registered, and make suppliers publish performance figures measured the same way. That should make it easier to compare models and harder to exaggerate claims.
Here’s what changes, when the rules are likely to start, what they won’t fix, and whether you should wait before buying a heat pump.
Quick summary
- Consultation on minimum efficiency rules for heat pump water heaters closed on 5 October 2026; the government will now finalise them.
- The rules would set a minimum efficiency level, require product registration and standardise the performance figures suppliers publish.
- They’re expected to start within about 6 to 12 months of the final rules being made, with energy rating labels likely to follow around 2028.
What changes for heat pumps?
The draft rules introduce minimum energy performance standards (MEPS) for heat pump water heaters under the Greenhouse and Energy Minimum Standards (GEMS) Act 2012. They cover heat pumps used mainly to supply hot water to homes.
The Department of Climate Change, Energy, the Environment and Water (DCCEEW) released the exposure draft on 7 September 2026. It proposes three main changes.
A minimum efficiency level
For the first time, heat pumps would have to meet a legal minimum efficiency to be sold in Australia. The level is designed to match what heat pumps already need to qualify for STCs: at least 60% energy savings compared with a standard electric tank in climate Zone 3, the reference zone used for rebates. The government plans to review the level three years after it starts, according to the Consultation Regulation Impact Statement.
Efficiency is set to be measured with a new Australian test developed with industry (Appendix H of AS/NZS 5125.1). It runs a full 24-hour hot water cycle at a cool 9°C air temperature, replacing the computer simulations used today. Under that test, the government expects a heat pump at the minimum level to record a daily coefficient of performance (COP) of around 2, meaning it delivers about twice as much heat as the electricity it uses.
That looks low next to the COPs of 4 or 5 you’ll often see in brochures. The difference is the test: manufacturers’ figures are usually measured in much warmer conditions, which the government notes can produce efficiency claims most households won’t achieve.
Standardised performance figures
Suppliers would have to test their products to a set method and report the results, and the conditions they were measured under, to the regulator. That information can then be published on the government’s Energy Rating Product Database. The new test measures:
- Maximum hot water delivery: how much hot water you can actually draw before it runs cold.
- Reheat time: how long the unit takes to heat the tank back up.
- Energy efficiency (COP): how efficiently the unit turns electricity into hot water.
- Operational settings: the settings used to achieve those results, so installers can set units up to match.
The government has also flagged noise and heating capacity as information that could be published, possibly on future energy rating labels.
Product registration
Models would need to be registered with the GEMS Regulator before they can be sold, as already happens with products like air conditioners, fridges and electric storage water heaters.
Expert tip
Until the new rules apply, treat headline COP figures with caution. Ask the supplier what conditions the COP was measured at, and compare models using figures tested at similar temperatures.
When do the new rules start?
The rules aren’t in force yet. With consultation closed, DCCEEW will review submissions and finalise the determination. The GEMS Regulator has described the exposure draft as the final step for public feedback before the new determination is made.
The start date depends on when the final rules are registered. A government technical paper earlier this year proposed a start 6 to 12 months after the determination, according to AGL’s submission on it. The Decision Regulation Impact Statement notes that most industry submissions asked for at least 12 months. [Editor: confirm the lead time and any transition period in the exposure draft.]
| When | What happened or happens next |
| 16 December 2025 | Energy ministers approve introducing minimum standards for heat pump water heaters |
| October 2025 to May 2026 | Public feedback on the regulation impact statement and a technical paper |
| 7 September 2026 | Exposure draft of the rules released for public comment |
| 5 October 2026 | Public consultation closes |
| To be confirmed | Final rules (determination) made and registered |
| About 6 to 12 months later | Minimum efficiency rules take effect |
| Likely 2028 | Energy rating labels introduced, after further consultation |
The labels are a separate second stage. The Decision Regulation Impact Statement says labelling requirements are likely in 2028, subject to more consultation on the details and timing. That’s when you could start seeing star ratings on heat pumps, as you do on fridges and air conditioners. It also commits to reviewing the minimum efficiency level three years after it starts.
Expert tip
If you’re comparing heat pumps in 2027, ask suppliers whether their models are already registered under the new rules. Early registration is a good sign a manufacturer is confident in its tested performance.
Why are the rules needed?
Heat pumps have become a mainstream hot water choice, but the rules haven’t kept up. The GEMS Regulator has noted that heat pump water heaters have a wide range of energy efficiencies and were not regulated under the GEMS Act, even as consumer demand and government incentives boosted sales.
That demand is why energy ministers agreed to fast-track minimum standards. Electric storage water heaters already have minimum requirements, so heat pumps have been an unusual gap.
There’s also a rebate factor. To claim Small-scale Technology Certificates (STCs), the federal discount most buyers receive, a heat pump must deliver at least 60% energy savings in Zone 3. STCs currently cut the price of a heat pump by around $665 on average, and the government’s Consultation Regulation Impact Statement describes that threshold as a “de facto MEPS”.
But STCs are winding down. The number of certificates per installation falls each year until the scheme ends in 2030, and the government expects heat pump suppliers to stop participating after 2028, when the costs will outweigh the benefits. It warns this is likely to push suppliers towards cheaper heat pumps, even if they’re less efficient. The new rules make the efficiency floor permanent.
What won’t the new rules fix?
The new rules deal with efficiency, but efficiency is rarely why heat pumps disappoint their owners. Most problems come down to reliability, noise or poor installation. The government’s own Consultation Regulation Impact Statement acknowledges that longevity and product quality significantly affect consumer satisfaction, but says they aren’t addressed by the proposed rules.
- Reliability: A heat pump that fails after a few years wipes out its energy savings. The rules don’t set any minimum for durability or warranty.
- After-sales service: Spare parts and local technicians vary widely between brands, especially for newer importers.
- Noise: Heat pumps run a compressor and fan outside your home. Noise levels aren’t part of the minimum standard.
- Installation quality: Poor placement or plumbing can hurt performance and lifespan, regardless of how well the unit tested.
The standardised performance figures should still help. When every supplier has to report results from the same test, exaggerated marketing claims become easier to spot.
Expert reference
The Decision Regulation Impact Statement, approved by energy ministers in December 2025, sets out a two-stage approach: minimum efficiency standards first, then energy rating labels after further consultation. Labels would give buyers a simple star rating to compare models.
Expert tip
When comparing heat pumps, check the compressor warranty specifically. It’s the part most likely to fail, and some brands cover the tank for far longer than the compressor.
Should you wait to buy a heat pump?
For most people, no. The rules are likely around a year or more away from taking effect, and rebates get smaller every January. Waiting could cost you more than it saves.
The proposed minimum matches the efficiency level heat pumps already need to claim STCs, so most models currently sold with the rebate should already meet it. The rules are mainly about locking in that floor as STCs disappear and making performance claims comparable.
If you’re buying now, focus on the things the new rules won’t check for you:
- Choose an established brand with a local service network.
- Compare compressor warranties, not just tank warranties.
- Ask what conditions the advertised COP was measured at.
- Check noise levels and where the unit will sit relative to bedrooms and neighbours.
- Use a licensed installer and get the full installed price in writing.
If you have rooftop solar, it’s also worth checking whether a heat pump is the best fit at all. Our guide to heat pumps vs solar diverters explains when a cheaper diverter on your existing tank can make more sense.
Expert tip
Set your heat pump’s timer to run during the middle of the day. It will use your own solar if you have it, and warmer daytime air helps it run more efficiently.
Get more value from your home energy setup
Pairing the right solar system with efficient appliances can help you cut grid use and lower your energy bills. Compare residential solar options and request a free quote for your home below.
Frequently asked questions
What are heat pump water heater MEPS?
MEPS stands for minimum energy performance standards. For heat pump water heaters, they would set a legal minimum efficiency that every model must meet before it can be sold in Australia. The rules would also require products to be registered and suppliers to publish standardised performance figures measured under the same test conditions.
When will the new heat pump standards start?
Not yet. Public consultation closed on 5 October 2026, and the government is now finalising the rules. Once the final determination is registered, the standards are expected to take effect within about 6 to 12 months. Energy rating labels are likely to follow around 2028.
Should I wait for the new rules before buying a heat pump?
For most households, no. The rules are likely around a year or more away, and STC rebates shrink every January, so waiting could cost more. Instead, choose an established brand, compare compressor warranties, check noise levels and use a licensed installer. These matter more than the new efficiency floor.
Will the new rules make heat pumps more expensive?
Probably not by much. The minimum matches the current STC requirement, which most rebated models already meet. However, AGL has warned that if more than 5% of registered models fail the new standard, product choice, availability and prices could be affected. Some manufacturers may also face retesting and registration costs.
Will heat pumps get energy star ratings?
Likely, but not straight away. The government plans to introduce labelling requirements as a second stage, likely in 2028, after further consultation on the details. That would give heat pumps a star rating label similar to the ones you see on fridges, washing machines and air conditioners.
Key takeaways
- Consultation on Australia’s first minimum efficiency rules for heat pump water heaters closed on 5 October 2026.
- The rules would set a minimum efficiency level, require product registration and standardise the performance figures suppliers publish.
- They’re expected to start within about 6 to 12 months of the final rules being made, with star rating labels likely around 2028.
- The rules won’t address reliability, noise, after-sales service or installation quality, so buyers still need to check these.
- Most households shouldn’t wait to buy, since rebates shrink every January and the rules are likely around a year or more away.
Thinking about switching to a heat pump?
Compare quotes from trusted local installers and find out which rebates you’re eligible for before they step down in January. Click here.
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