Change your business hot water system to heat pump

Replacing your old gas hot water system with a heat pump system is an excellent way to reduce running costs and utilise renewable energy.

According to Sustainability Victoria, heat pump systems use 60–75% less electricity than traditional electric systems. Additionally, they can be programmed to heat water during the middle of the day, acting like a thermal battery and storing excess solar energy.

The best return on investment will be achieved by heavy hot water users, ranging from small businesses such as hairdressers, massage therapists, or gyms who use a lot of hot water, through to food manufacturers or others who require significant amounts of high temperature water for cleaning. Any business can benefit from replacing a gas hot water system as this enables the use of clean renewable energy for hot water and is another step towards getting rid of your gas connection.

What to look for

This Heat pump how water systems guide from Renew will help you know what to look for when you’re buying a heat pump. The guide is primarily aimed at residential users, but the basic principles apply for businesses. In fact, most smaller businesses use the same hot water systems as homes.

Invest in a high-quality heat pump system suitable for your business needs. Cheaper systems may have lower efficiency, slower recovery rates, and higher running costs, potentially leading to hot water shortages. If your business depends heavily on hot water, a reliable system is worth the extra upfront cost.

Analogy: Would you buy a cheap van to save money upfront if it kept breaking down, used excessive fuel, and couldn’t carry your full load?

Choose products that use natural refrigerants such as CO2 (R744) and Propane (R290). They are much better for the environment, having a significantly lower global warming potential when/if they are released into the atmosphere. They also pose no risk of creating the ‘forever’ per- and polyfluoroalkyl substances (PFAS) that some man-made refrigerants create during production and when exposed to ultraviolet light in the atmosphere.

Minimal hot water users

If you barely use any hot water, for example a small office that just has handwashing and a few coffee cups, a heat pump might not be the best answer, especially if you don’t have much (or any) outdoors space. In this case, the small 60L or 80L under-sink electric hot water systems are usually the best choice. You should ensure that they are being powered by 100% renewable electricity though, by either installing solar or signing up to a 100% renewable provider.

If this is you, don’t let a salesperson talk you into installing a cheap heat pump. The tiny amount of hot water consumed means only a minute amount of energy is saved, while the energy that goes into the manufacture, shipping and installation of the heat pump is large. A small electric system is also likely to last much longer than a cheap heat pump.

Small hot water users

Businesses using systems in the 120–450L range can opt for a drop-in replacement heat pump. Work with a reputable supplier to select the right size and quality for your needs. The Darebin Energy$mart program can assist with guidance and rebates up to $1,000.

Medium hot water users

Larger offices, accommodation venues, or sites with complex hot water systems (e.g., ring mains) should consult experienced plumbers or engineers. A well-designed heat pump system can deliver substantial energy and cost savings.

Industrial hot water

For industrial hot water supplies, consult experts such as the Energy Efficiency Council and the Australian Alliance for Energy Productivity to design and implement the most efficient solution.

Costs

Heat pump systems have a higher upfront cost but are significantly cheaper to operate. Domestic-sized systems range in price from about $2000 to $4000+, excluding installation but also attract significant rebates from State and Federal governments. You may also be eligible for the $1000 rebate from Darebin Energy$mart– see below. Rebates can make the cost of upgrading competitive to replacing like-for-like or sometimes even cheaper.

Financial support

The Darebin Energy$mart program can help you upgrade your hot water system to an efficient heat pump. We can offer guidance, connections to reputable installers and up to $1,000 on top of the Victorian government rebates for businesses to upgrade.

More information

If you have any questions or want to find out more, please contact us at sustainable.business@darebin.vic.gov.au

Sustainable business registration

Visit our Local business electric heroes page to learn more from others who are transitioning to all electric businesses.