Hot Water Is One of the Biggest Drains on Your Electricity Bill
For most Australian households, hot water accounts for between 20% and 30% of total energy consumption making it the second largest energy cost after heating and cooling in most climates. Electric storage hot water systems running on grid power are particularly expensive, often costing $600 to $1,200 per year to operate.
Solar hot water and heat pump systems offer a powerful way to cut this cost dramatically, and when combined with rooftop solar panels, they form one of the most cost-effective home energy upgrades available to Australian homeowners.
At Invincible Energy Australia’s trusted solar support partner we help homeowners across the country select and install the right solar hot water solution for their climate, roof, and budget.
Two Ways Solar Can Heat Your Water
There are two fundamentally different approaches to solar water heating in Australia, and they work in very different ways. The traditional solar hot water system uses roof-mounted collectors to directly capture thermal energy from the sun and heat water.
The heat pump hot water system uses electricity ideally from your solar panels to extract heat from ambient air and transfer it to water, similar to how a reverse-cycle air conditioner works but for water heating. Both approaches can reduce hot water energy costs by 60% to 90% compared with a standard electric storage system.
Traditional Solar Hot Water Systems
Traditional solar hot water systems have been installed on Australian roofs for over 40 years. They consist of roof-mounted collectors either flat plate or evacuated tube connected to an insulated storage tank, which may be mounted on the roof or on the ground beside the house.
Flat Plate Collectors
Flat plate collectors consist of a glass-covered panel containing a network of pipes through which water or a heat-transfer fluid circulates. They are robust, proven, and well-suited to warm to hot Australian climates where ambient temperatures remain high throughout the day. Flat plate systems are typically less expensive to purchase and install than evacuated tube systems and perform reliably in most Australian locations.
Evacuated Tube Collectors
Evacuated tube collectors use rows of glass tubes, each containing an inner absorber tube surrounded by vacuum insulation. The vacuum insulation dramatically reduces heat loss, making evacuated tube systems more efficient in cold or overcast conditions. They are the preferred choice for cooler climates like Canberra, Hobart, and the Victorian highlands, and for households that require consistent hot water performance through winter.
Heat Pump Hot Water Systems The Smart Pairing With Solar Panels
Heat pump hot water systems work by extracting heat energy from the ambient air and transferring it to water using a refrigerant cycle. They use roughly one-quarter the electricity of a standard electric storage system, making them extraordinarily efficient. When powered by rooftop solar electricity during the day, a heat pump can heat your household’s hot water for virtually nothing.
How to Time Your Heat Pump to Run on Solar
Most modern heat pump hot water systems include a timer or smart scheduling function. Setting the system to run during your peak solar generation hours typically 9am to 3pm ensures it draws from your solar panels rather than the grid.
On a standard 6.6kW solar system, running a heat pump during the day rarely noticeably reduces your available solar power for other household uses, as generation typically exceeds domestic consumption during midday hours on clear days.
Hot Water Diverters Maximising Your Existing Solar
If you already have rooftop solar panels and an electric hot water system, a hot water diverter is one of the highest-return upgrades you can add. A diverter device monitors your solar system’s real-time generation and diverts surplus power energy that would otherwise be exported at a low feed-in tariff into your existing electric hot water element. Products like the Catch Power relay are widely available in Australia and can be installed for $500 to $800
Invincible Energy frequently recommends hot water diverters as the highest-return add-on for existing solar owners who want more value without the cost of a full battery system.
, often paying back within 12 to 18 months through improved self-consumption of solar energy.
Government Rebates for Solar Hot Water in Australia
Solar hot water systems and heat pump hot water systems are both eligible for Small-scale Technology Certificates under the federal STC scheme, the same mechanism that reduces the upfront cost of solar panels. The number of STCs varies by product type, size, and location.
In addition, several state energy efficiency programs offer rebates specifically for hot water system upgrades, including the Victorian Energy Upgrades program which provides significant discounts on heat pump installations for eligible households.
Which System Is Right for Your Home
For households without existing solar panels who primarily want to reduce hot water costs, a traditional solar hot water system or heat pump is an excellent standalone investment.
For households with existing solar panels, a heat pump hot water system on a solar timer or a hot water diverter is typically the highest-return upgrade available.
For households installing new solar systems, designing the system to comfortably power a heat pump during daytime hours adds significant value at minimal extra cost. The team at Invincible Energy can assess your current hot water setup and recommend the most cost-effective solution for your home and budget.
