Solar vs heat pump hot water: which saves you more?

Solar and heat pump hot water both cut your energy use hard, which is why people often shortlist the two together. They get there in completely different ways, though, and the better choice depends on your roof, your budget and how much hassle you want. Terry has fitted both across Western Sydney and here is how he sizes up the decision.

How each one works

Solar hot water uses collector panels on the roof to heat water directly from the sun, with an electric or gas booster for cloudy stretches and cold mornings. When the sun is out, your hot water is close to free.

A heat pump sits on the ground like a normal tank but works like a reverse air conditioner, pulling warmth from the surrounding air to heat the water. It runs on electricity but uses only about a third of the power of a standard electric element, and it works day or night, rain or shine.

Roof space, orientation and climate

This is often the deciding factor. Solar needs unshaded, north-facing roof space to perform, and if your roof faces the wrong way, is heavily shaded, or is already covered in PV panels, solar hot water struggles to earn its keep.

A heat pump does not touch your roof. It only needs a bit of clear outdoor space with decent airflow. The one catch is cold air: on frosty Sydney mornings a heat pump works harder and heats a little slower, though a well-sited unit handles local winters fine. Solar leans on its booster more in winter for the same reason.

Up-front cost and rebates

Solar hot water is the biggest up-front spend of any system, roughly $4,000 to $7,000 installed, because you are paying for collectors, a tank and the roof plumbing.

A heat pump costs roughly $3,500 to $5,500 before rebates, and this is where it pulls ahead for a lot of homes. In NSW you can usually combine federal STCs, worth roughly $640 to $860, with the NSW Energy Savings Scheme incentive of up to around $640 when replacing electric. That is commonly worth roughly $1,000 to $2,500 off, applied as an up-front discount at installation, which can bring a heat pump down close to the price of a plain tank. Solar can attract STCs too, but the higher starting price means it still costs more to get on the wall.

Running cost and lifespan

Over the long haul, solar has the lowest running cost of any system when the sun cooperates, and the panels last roughly 15 to 20 years. A heat pump has very low running costs as well, just not quite as low as a well-performing solar setup in summer, and it lasts roughly 10 to 15 years. The gap between them on running cost is smaller than most people expect once you factor in solar's winter boosting.

Terry's verdict

If you have the right roof, plan to stay in the home a long time, and want the lowest possible bills for the next couple of decades, solar hot water is hard to beat. For most Sydney homes, though, Terry leans heat pump: it is cheaper to install after the rebate, it does not depend on your roof, and it starts saving straight away with very little fuss. It is also the easier retrofit when your old electric tank dies and you want a quick, low-cost upgrade.

The honest bit is that both are good, and the wrong one for your home wastes money. Terry looks at your roof, your existing system and your budget, tells you plainly which saves you more, and quotes a fixed price before starting.

Comparing solar and heat pump hot water around Berala, Auburn, Regents Park or Homebush? Call Terry on 0415 274 542 for a straight recommendation based on your actual roof and usage.