The NSW Heat Pump Incentive offers significant discounts to encourage the replacement of old, inefficient hot water systems with energy-efficient air source heat pump systems. Eligible households and small businesses can benefit from incentives for replacing an electric or gas water heater. The program helps reduce upfront costs for installation and promotes long-term savings through decreased energy consumption and maintenance expenses. By participating, you also contribute to reducing emissions and achieving the state’s net-zero targets.
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What is the Peak Demand Reduction Scheme (PDRS)?
The Peak Demand Reduction Scheme (PDRS) is designed to alleviate the stress on NSW’s electricity grid during high-demand periods by offering financial incentives to both households and businesses that reduce their electricity usage. By implementing energy-efficient technologies and strategies, participants can help lower the collective energy demand when it peaks, thereby reducing the likelihood of power outages and minimising overall electricity costs. The PDRS supports the installation of eligible appliances such as battery energy storage systems, heat pump hot water systems, air conditioning units, and pool pumps. This initiative not only promotes a more resilient energy infrastructure but also aligns with NSW’s broader goals of reducing emissions and fostering sustainable energy practices.
Is the NSW heat pump incentive a rebate?
The NSW government administers the heat pump incentive but does not provide a rebate. Instead, your installer (either an accredited certificate supplier (ACP) or in partnership with one) will provide you with the discount.
Please note that heat pump systems are not free, even after all available rebates and incentives have been deducted. Your installer will deduct the value of the certificates, including eligible STCs, from the upfront cost and installation of the system. This will reduce the total cost of the system, but the heat pump will not be free. Most heat pumps will cost between $2,000 and $7,000 depending on brand, size, and quality.
How much can I save with the NSW heat pump incentive?
The amount you receive will depend on the hot water system you are replacing.
- Replacing an electric hot water system with a heat pump will attract a discount between $400 and $670.
- Replacing a gas hot water system with a heat pump will attract a discount between $190 and $310.
The amount you receive will depend on the size of the heat pump hot water system and the price quoted by the accredited supplier.
Am I eligible for the heat pump incentive?
To be eligible for the NSW heat pump incentive, your home or business must:
- Be replacing an electric or gas hot water system
- Have the heat pump installed by an ACP or an installer partnered with one
What heat pumps are eligible for the incentive?
Your ACP will offer heat pumps approved for the program.
Who can install the heat pump?
To receive the heat pump incentive, your heat pump must be installed by an ACP or an installer partnered with one.
Will my heat pump be eligible for any other rebates?
Heat pump hot water systems are eligible items to receive Small-scale Technology Certificates (STCs) under the Small-scale Renewable Energy Scheme (SRES). Your heat pump will meet the same requirements under SRES as the PDRS, therefore your system will also receive further discounts. Read more about hot water system rebates and incentives.
