In Your Home - energy-use is so much a part of modern life that we don’t usually give it a moment’s thought.

Heat pump water heaters

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EECA’s involvement

EECA is working with the heat pump water heater (HPWH) and solar water heating industries to develop independent information to help Kiwis choose the best energy efficient hot water system for their needs.

EECA, through its Innovation Fund, provides grants to encourage the development of the HPWH industry. We are gathering information about the performance of heat pumps in various climates around New Zealand, and developing standards and industry best practice guidelines.

Ultimately we hope to develop a test method to enable consumers to compare the performance of various models available. A minimum energy performance standard and energy star rating labelling may be introduced for HPWHs in the future.

Heat pump water heaters

A HPWH is an energy efficient water heating system. With a HPWH you can harness free renewable energy to heat water in your home or business.

Heat pumps for water heating have been available for some time, but it’s only recently that they have become affordable, reliable, compact and quiet enough to be viable.

Benefits of heat pump water heaters

On average, water heating amounts to 30% of New Zealand households’ total energy use. Choosing an energy efficient system can help reduce your energy use and your household contribution to climate change.

Like solar water heaters, HPWHs generally use just one-third of the energy of a conventional electric hot water tank. They can also work well in places that aren’t good for solar water heaters, such as the south side of hills that get less sun.

Heat pumps can be installed in both new and existing buildings.

How heat pumps work

A refrigerator (so called, because it uses the “refrigeration cycle” to keep cold) pumps heat from inside the fridge to the outside – keeping the inside colder. A Heat Pump Heater uses the same principle in reverse (hence, it is often called a reverse-cycle refrigerant): It transfers heat from outside into the house or a hot water tank.


The outside air gets heated up by energy from the sun every day of the year – so even when the sun is not shining brightly (cloudy days, night, winter) there is still a lot of solar heat energy available to use.


Four steps of a heat pump system

HPWHs pump a ‘refrigerant’ around the system.

  1. The refrigerant changes to a liquid form when it is compressed through a ‘condenser’ coil – at this point it releases its heat energy into the hot water tank.
  2. The refrigerant passes through an expansion valve and expands to become a gas (like an aerosol spray can).
  3. The refrigerant absorbs the heat from the air around it as it’s pumped through ‘evaporator’ coils outside the house.
  4. The compressor pumps the refrigerant round again and again and the cycle continues.

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Energy efficient water heating

Because heat pump systems only use electrical energy to pump the gas and ‘move’ the heat - and don’t actually ‘make’ heat - they are very efficient. Every $1 of electricity needed to run the compressor pump can move the equivalent of about $3 of heat energy.

This makes heat pump systems much more efficient than traditional electric or gas heaters - depending on where you live, the outside air temperature and other conditions. Generally, the hotter the outside air, the better the heat pump runs.

Solar water heaters can sometimes be used together with heat pumps to give an even better overall efficiency on sunny days.

Optimal conditions for heat pumps

HPWH systems tend to work best in areas with average air temperatures above about 5 degrees Celsius. But most will still run more efficiently than a traditional electric heater in temperatures as low as -10 degrees Celsius.

Types of heat pump water heaters

There are two different types of HPWHs. In some systems the hot water cylinder is split from the heat exchanger whereas others are all-in-one. Heat exchange units are generally located outdoors and may produce some background noise. Check with your regional, district or city council regarding the noise limit in your area.

Cost effectiveness of heat pump water heating

EECA’s current data identifies that in an average home a HPWH could save up to $490 a year on electricity bills, compared to an equivalent traditional electric hot water tank,

If we assume that it costs about $5,000 to buy and install a HPWH system compared to $1,500 for a traditional electric heater/tank, you would recoup your investment in the HPWH in 7 years. Plus, you would keep on making savings every year after.

This information is a guide only and the payback period will vary in individual cases depending on each system’s performance, your household’s hot water use and the electricity tariff. Estimates are based on:

  • a ‘typical’ household of 4 people using a standard electric 180 litre tank for heating hot water
  • an electricity tariff and standing charges of 20c per kWh.

Saving money and saving the planet

Because HPWHs are so efficient using much less electricity than ordinary electric hot water systems, you will also be saving on greenhouse gas emissions – every bit helps.

Other uses for heat pump water heaters

Some HPWH systems can also give you ‘central heating’, by pumping warm water from the hot water tank around a system of under-floor heating pipes. Because the heat pump system is cheaper and greener to run than a conventional electric or gas-fired hot water system, you can heat your whole home this way.

Some other systems can be used to heat a hot tub, spa or swimming pool more cheaply than using an electric heater.

More information

EECA through its Innovation Fund provides grants to encourage the development of the HPWH industry. EECA will continue to gather information about the performance of heat pumps in various climates around New Zealand, developing standards and industry best practice guidelines.

More information will be published as it becomes available.

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EECA Energy Efficiency and Conservation Authority - Te Tari Tiaki Pūngao.