Heat Pump Rebates in Australia: Federal, State & Council
Every household in Australia can get a heat pump hot water system rebate. In some areas, you can also add state-based and council incentives. These combined rebates can lower the upfront cost by several hundred dollars, or even more than a thousand.
This page explains all the current heat pump hot water rebates, including the national scheme, what’s available in your state or territory, and any council incentives.
The Federal Heat Pump Rebate
The main heat pump hot water government rebate available across Australia is the federal Small-scale Renewable Energy Scheme. No matter where you live in Australia, every heat pump hot water system qualifies for this national discount. This works just like the solar panel rebate, using the Small-scale Renewable Energy Scheme (SRES) for heat pumps.
With the SRES, your accredited installer creates Small-scale Technology Certificates (STCs) for your system, sells them, and gives you the value as a discount when you buy. The government calls this “claiming STCs” instead of a rebate, but it still means you pay less upfront.
This discount is usually worth a few hundred dollars to upwards of $600 in some places, but the exact amount depends on two things:
- Your climate zone. Heat pumps are more efficient in warmer areas, but people in cooler areas tend to use more hot water. That’s why the number of STCs you get depends on your postcode.
- The system’s efficiency. More efficient water tanks earn you more certificates.
The STC discount gets a little smaller every year, just like the solar and home battery rebates. Your heat pump earns certificates based on the number of years left until the scheme ends in January 2030. As time passes, a heat pump system will earn fewer certificates and a smaller discount at the time of purchase than it would have the year before.
If you are thinking about getting a heat pump hot water system, installing it this year will give you a bigger rebate than if you wait until next year. You don’t have to do anything to get this rebate. Trusted installers include the STC discount in the price they quote you. Keep in mind that certificate values can change as the market changes. To get a good idea of how many STCs you could get, try out our hot water heat pump STC calculator.
State and Territory Heat Pump Rebates
In addition to the national STC discount, some states offer their own heat pump hot water rebates or incentives. Here’s a comparison of what’s available.
| State / Territory | Program Name | Type | Value |
|---|---|---|---|
| Victoria | Solar Homes rebate + Victorian Energy Upgrades (VEU) discount | Rebate + point-of-sale discount | Roughly $1,600–$2,000 combined, depending on system and replacement type |
| New South Wales | NSW Hot Water Upgrade Incentive | Point-of-sale discount | Up to $640 for an electric replacement or $330 for a gas replacement |
| South Australia | SA REPS incentive | Retailer-administered incentive | Roughly $250–$850, with more available for priority group households |
| ACT | ActewAGL upgrade offer + Sustainable Household Scheme | Rebate + bill credit + loan | Up to $1,250 off plus bill credits, with more available for concession card holders. Separately, a low-interest loan of up to $20,000 may be available. |
New South Wales (NSW)
Program: NSW Hot Water Upgrade Incentive, delivered under the state’s Energy Savings Scheme.
Value: Up to $640 when you replace an electric hot water system with a heat pump, or up to $330 when you replace a gas system.
Eligibility: The heat pump must have a minimum 5-year warranty and be installed by an accredited provider under the scheme.
How to claim: Ask your installer to apply the discount at the time of purchase. Most accredited providers already include it in their quotes.
Victoria (Vic)
Program: There are a couple. With the Victorian Energy Upgrades program, your system is eligible for Victorian Energy Efficiency Certificates (VEECs). VEECs work like STCs, but they’re Victoria-specific. Your installer creates and sells certificates based on the emissions your heat pump avoids, then passes on as an upfront discount.
There’s also the Solar Victoria hot water rebate. It’s worth $1,000 with an additional $400 if the heat pump is Australia-made. It’s different from the VEECs program and requires you to apply with a heat pump quote.
The following rebates are stackable with each other and the federal rebate.
Value:
- VEECs: Around $560 off upfront costs when replacing a gas hot water system with a heat pump.
- VEECs: Around $630 when replacing an electric system.
- Up to $1,000 off upfront costs when combining a Solar Homes hot water rebate with a Victorian Energy Upgrades discount. A further $400 rebate is available when you choose an eligible locally made hot water product. This allows for a total saving of up to $1,400.
Eligibility: You’re replacing an existing hot water system that’s at least two years old for VEECs and three years old for the Solar Victoria rebate. New-build homes aren’t eligible. Combined household income must be $150,000 or less per year to qualify.
How to claim: Installers will start the rebate application. Customers then receive an email inviting them to apply. The VEECs rebate is applied to the invoice, just like the STC federal rebate.
South Australia (SA)
Program: Retailer Energy Productivity Scheme (REPS) incentive. SA’s government deliberately doesn’t publish fixed incentive amounts for REPS. It’s a retailer-obligation scheme, and individual “obliged retailers” and their activity providers set their own incentive levels, which is exactly why the numbers vary across different sites you’ll find quoting this rebate.
The exact incentive is set by your retailer, not the government, so amounts vary.
How to claim: The incentive goes to your installer, who passes on the savings. Ask them upfront how much will be taken off your quote.
Australian Capital Territory (ACT)
Program: ActewAGL heat pump upgrade offer and the ACT Government’s Home Energy Support Scheme.
Value:
- ActewAGL customers upgrading from gas or electric hot water can get $1,250 off the purchase price, plus a $250 bill credit spread over three years (about $20 per quarter).
- Concession card holders can access a rebate of up to $2,000, plus a $400 total credit on your quarterly ActewAGL electricity bill over three years (about $33 per quarter).
Loan option: The Sustainable Household Scheme offers a 3% interest loan of up to $20,000 to cover a heat pump and other electrification upgrades. There are no upfront costs or fees, and you have 10 years to repay it.
Council Rebates for Hot Water Heat Pumps
Some councils offer additional sustainability or electrification rebates that may cover heat pump hot water systems. Check your council’s website before purchasing.
City of Adelaide (SA): The Sustainability Incentives Scheme offers an “Appliance Electrification” category. You can get 50% of the cost, up to $2,000, for replacing a gas or wood-burning appliance with an electric or solar-powered one. Hot water heat pumps are specifically included.
Darebin City Council (Vic): Instead of a separate rebate, Darebin runs a group-buy program called Darebin Energy Upgrades. The group-buy price already includes state STC and VEU discounts. Darebin also adds a $150 rebate for Aquaplus heat pump systems and a separate $220 rebate for disconnecting your last gas appliance. The disconnection rebate is limited to the first 30 households and may run out soon.
Randwick Council (NSW): Randwick offers a hot water rebate covering 25% of the cost, up to $500 for households, $5,000 for apartment blocks, or $1,000 for businesses. You can still claim the federal STC and state rebate along with the council rebate. However, all of Randwick’s household sustainability rebates (they have multiple ones) are capped at $5,000 in total, not just for hot water.
City of Holdfast Bay (SA): The Green Living Rebates scheme covers 50% of the cost, up to $200, when you replace a gas appliance with an electric appliance. This may include replacing a gas hot water system with a heat pump. Households and businesses can claim one rebate per financial year, subject to available funding.
Can You Combine Federal, State and Council Rebates?
In the four states listed above, you can combine the national STC discount with your state or territory’s incentive for the same installation. Your installer will automatically apply the federal heat pump STC discount.
However, you might need to apply separately for state and council incentives before booking.
Before you sign anything, ask your installer which rebates are already included in the quoted price and which ones you need to apply for yourself.
Having solar panels does not affect your eligibility for heat pump STCs or any separate state incentive.
What to Do Next
Begin by using our Hot Water Heat Pump STC Calculator to find your national discount. Next, check the table above to see if your state or council offers any extra rebates. Then, get up to three quotes from trusted installers and ask each one to list exactly which rebates are included in their price.
If you’re looking to further educate yourself on heat pumps, our hot water heat pump guide is a great starting point. To find out which brands Australians like best, check out the 10 best-rated heat pump hot water systems.