If you are looking into a heat pump hot water system for your Perth home, one question sits at the top of the list: what are the actual savings? We see this query almost daily from homeowners tired of rising Synergy bills.
Let’s break down the real numbers based on typical Perth usage and current 2025 electricity rates.
The Short Answer
Most Perth households see a reduction of $550 to $900 per year on hot water energy costs after switching from a conventional electric storage system to a heat pump.
We find that with Small-scale Technology Certificates (STCs) reducing the upfront capital, the typical return on investment happens in just 3 to 4 years.
The following sections dig into the specifics so you can estimate the impact on your own budget.
How We Calculate Savings
Understanding the Efficiency Difference
To understand the savings, you have to look at the Coefficient of Performance (COP). A conventional electric storage system generally has a COP of 1.0. This means it produces 1kW of heat for every 1kW of electricity it pulls from the grid.
Heat pumps are different beasts entirely.
Modern units typically operate with a COP of 3.5 to 4.5. They produce roughly 4kW of heat for every 1kW of electricity consumed. The system achieves this efficiency by extracting existing heat from the ambient air rather than generating it through a resistive element.
The practical result:
- Electric Storage: 100% energy paid for.
- Heat Pump: ~25% energy paid for (75% free energy from air).
Perth-Specific Factors
Our region offers a unique climate advantage that boosts these efficiency numbers even higher.
Perth provides the perfect operating environment for three specific reasons:
- High Ambient Temperatures: Average daily temperatures rarely drop below 5°C, even in the dead of winter.
- Efficient Overnight Recovery: Mild nights allow systems to reheat efficiently without straining the compressor.
- Solar Synchronization: Long sunny days align perfectly with timer-based heating cycles.
Electricity tariffs play a massive role here as well.
As of early 2026, standard Synergy residential rates (A1 Tariff) sit around 30 cents per kilowatt-hour (kWh).
However, many of our clients switch to the “Midday Saver” or Time of Use tariffs. This strategy allows the heat pump to run between 9 AM and 3 PM when electricity rates can drop significantly, sometimes as low as 8 cents per kWh depending on the specific plan.
Real Savings Examples
We have modeled three common scenarios based on data from recent installations across the Perth metropolitan area.
Example 1: Family of Four, Electric Storage
Current situation:
- 315L electric storage system (resistive element)
- 3,600kWh annual hot water energy use
- Standard Synergy Home Plan (A1)
- Annual cost: $1,108
After heat pump upgrade:
- 315L heat pump (COP 3.8 average)
- 950kWh annual energy use
- Running on programmed timer (midday cycle)
- Annual cost: $292
Total Annual Savings: $816
Example 2: Couple, Smaller Usage
Current situation:
- 160L-250L electric storage system
- 2,100kWh annual hot water energy use
- Standard tariff
- Annual cost: $646
After heat pump upgrade:
- 250L heat pump (COP 3.8)
- 550kWh annual energy use
- Annual cost: $169
Total Annual Savings: $477
Example 3: Large Family (5+ People)
Current situation:
- 400L electric storage system
- 5,200kWh annual hot water energy use
- Peak tariff usage
- Annual cost: $1,601
After heat pump upgrade:
- 400L heat pump (COP 3.8)
- 1,370kWh annual energy use
- Annual cost: $421
Total Annual Savings: $1,180
STC Rebates Reduce Upfront Cost
Heat pumps fall under the category of small-scale renewable energy systems. This classification makes them eligible for Small-scale Technology Certificates (STCs), which act as a point-of-sale discount.
We handle the trading of these certificates, so the price you see on a quote is usually the net price after the rebate is applied.
Perth is classified as “Zone 3” for STC calculations.
This zoning usually results in a higher rebate than cooler areas like Tasmania (Zone 4).
Typical STC Values for Perth (2025/2026 Estimate)
| System Size | Estimated STC Value |
|---|---|
| 270L - 315L Unit | $900 - $1,150 |
| 315L - 400L Unit | $1,100 - $1,450 |
Note: STC prices fluctuate based on market trading values, generally hovering between $36 and $38 per certificate.
Calculating Your Payback Period
You can determine your return on investment (ROI) with a simple calculation.
The Formula: (Total Installed Cost - STC Rebate) ÷ Annual Energy Savings = Years to Break Even
A Real-World Calculation:
- Initial Quote: $4,600 (Fully Installed)
- STC Rebate (Zone 3): -$1,100
- Net Cost to You: $3,500
- Annual Bill Savings: $816 (from Example 1)
The Result: $3,500 ÷ $816 = 4.2 Years
Once this period ends, your system essentially pays you over $800 a year in avoided costs for the remainder of its lifespan. Since starting Hot Water System Perth in 2021, we have seen quality stainless steel tanks last well over 10-15 years, meaning the long-term gain is substantial.
Factors That Affect Your Savings
Not every home sees the exact same results.
We evaluate several variables during a site inspection that can swing these numbers in either direction.
The Savings Accelerators
- Solar PV System: If you have rooftop solar, you can set the heat pump to run only when your panels are generating excess power. This effectively makes your hot water free.
- High Usage: Larger families save more money because they are offsetting a larger volume of expensive electricity.
- Tariff Optimization: Switching to a time-of-use tariff and running the unit during off-peak windows maximizes the price gap.
The Savings Limiters
- Low Usage: A single person using very little water will see a longer payback period simply because the annual bill is lower to begin with.
- Existing Gas: If you are switching from natural gas, the savings are lower than switching from electric resistance, though the disconnection of the gas supply charge ($200+ per year) often tips the scales back in favor of the heat pump.
Insider Tip: Noise Regulations
WA has strict environmental noise regulations (Environmental Protection Regulations 1997).
Cheaper, noisier units may need to be installed far away from neighbors’ bedrooms to comply, potentially increasing piping costs.
We always recommend whisper-quiet models (under 48dBA) to ensure you save money without buying a noise complaint from your neighbor.
Comparing to Gas Hot Water
The comparison changes if you are currently connected to the gas grid.
Gas storage systems historically cost 30% to 40% less to run than old electric systems. Therefore, the jump to a heat pump represents a smaller operational saving compared to swapping out an electric tank.
The Running Cost Breakdown:
- Heat Pump: $200 - $350 per year
- Gas Storage (4 Star): $450 - $600 per year + Supply Charges
While the energy savings are more modest, the real financial win often comes from capping the gas pipe entirely. Eliminating the daily supply charge for gas can save an additional $200 to $250 annually if the hot water unit was your only gas appliance.
The Bottom Line
For the vast majority of Perth homeowners, the math is clear.
Switching to a heat pump is one of the highest-return upgrades you can make to a property.
- Slash bills by $550 to $900 annually.
- Break even in under 5 years.
- Future-proof your home against electricity price hikes.
Are you ready to see the specific numbers for your home? Contact us for a transparent assessment where we review your current setup and calculate your exact projected savings.
