Short answer: yes. Say your electric tank is on controlled load 1 (off-peak). Put a heat pump on the same circuit and you save up to about $660 to $740 a year. If your tank is on the normal rate, you save up to about $1,130 to $1,270 a year. Rebates also come off the price of the heat pump.
Ausgrid says around half a million of its customers have a controlled load. So plenty of homes in Newcastle and Lake Macquarie already heat their water on the cheaper rate. We ran the numbers both ways.
The numbers
A standard electric tank uses about 14 kWh of power to heat 300 litres to 60°C. We assumed a full tank every day of the year, so these are top-end figures. Most homes use less.
A heat pump heats the same water with a third to a quarter of the power. It pulls heat out of the air instead of making it. Its efficiency is called COP. At a COP of 3, 1 kWh of power puts 3 kWh of heat into the water.
The heat pumps we fit most run on R290 refrigerant: the Apricus APHP-R290-260, the Envirosun ES330M9 and the iStore PASHW015-270LD-FL02-R290. Apricus rates its unit at “COP (average ambient temperature of 20º) 4.13W/W”. Envirosun says “up to 4.16”. iStore says “savings of up to 75% on your hot water bills”. Those ratings are for mild weather. A heat pump works harder on a cold morning, so we used a COP of 3 to 4.
The same tank of hot water, three ways
One day’s heating for a full 300 litre tank, 14 kWh of heat. Band widths are drawn to scale.
What a year of hot water costs
A full 300 litre tank every day, at EnergyAustralia’s standing-offer rates in the Ausgrid area from 1 July 2026. The dashed line is an electric tank on CL1; the shaded gap is what each heat pump saves against it.
| Setup | Electricity a year | Tank on CL1: $1,004 Running cost a year |
|---|---|---|
| Electric tank on the normal rate | 5,110 kWh | |
| Electric tank on controlled load 1 (CL1) | 5,110 kWh | |
| Heat pump on controlled load 1 (CL1), COP 3 | 1,703 kWh | saves $660 |
| Heat pump on controlled load 1 (CL1), COP 4 | 1,278 kWh | saves $740 |
| Heat pump on controlled load 2 (CL2), COP 3 | 1,703 kWh | saves $580 |
| Heat pump on controlled load 2 (CL2), COP 4 | 1,278 kWh | saves $680 |
| Heat pump on the normal rate, COP 3 | 1,703 kWh | saves $440 |
| Heat pump on the normal rate, COP 4 | 1,278 kWh | saves $580 |
Bars share one scale, $0 to $1,700. Savings are the CL1 tank’s $1,004 less each heat pump’s cost, rounded to the nearest $10. Our arithmetic from EnergyAustralia’s rates.
The controlled-load rows include the extra supply charge for that circuit: about $17 a year for CL1 and $32 for CL2.
What it means for you
- Tank on the normal rate: a heat pump on the normal rate saves up to about $1,130 to $1,270 a year.
- Tank on CL1: a heat pump on CL1 saves up to about $660 to $740 a year. On CL2, about $580 to $680. On the normal rate, about $440 to $580.
- Less hot water: use half as much and every figure roughly halves.
Not sure which rate your tank is on? Check your power bill for a line marked “CL”, “Controlled Load”, “Dedicated Circuit” or “Ancillary”. Take about 70% off that line. That’s roughly what a heat pump on the same rate saves you.
How controlled load works
Controlled load is a separate circuit. The network switches it on at set times and charges less for the power. Ausgrid runs two:
- CL1: on for at least 6 hours a day. Ausgrid sets the hours and can change them. Since July 2024, homes with a smart meter get some of those hours in the middle of the day, when solar power is cheap.
- CL2: on for at least 16 hours a day, including 4 hours between 7am and 5pm. Ausgrid says it suits smaller tanks, 100 to 250 litres.
For homes we fit 250 to 400 litre systems. 400 litres is the largest domestic size in Australia.
Cheaper power, fewer hours
Hours a day each circuit is on, out of 24, against its price per kWh.
4 of those hours fall between 7am and 5pm
An electric tank on CL1 already pays about 19 cents a kWh instead of 33. A heat pump on the same circuit pays the same 19 cents and uses a third to a quarter of the power. That’s where the 70% comes from.
Which circuit we wire it to
Usually CL1 or CL2. You get the cheap rate and the heat pump’s low use together.
If you export a lot of solar and want to use it for hot water, we wire the heat pump to the main meter instead. Even then it usually needs some boosting overnight to keep up, especially in winter. Without a battery, you pay for that night power. CL2 is often the cheapest option then. It depends on your retailer’s rates and what you get paid for your solar.
Rebates
Two rebates apply when you replace an electric tank with a heat pump. They come off your invoice, and we do the paperwork.
- NSW: the NSW Government says its hot water upgrade incentive can be “up to $640 when you replace an electric water heater with a heat pump water heater”. It calls the amounts “indicative only”.
- Federal: Small-scale Technology Certificates (STCs) are worth about $600 for most systems.
Combined, they take $800 to $1,600 off the installed price, depending on the system you’re replacing and the brand. NSW sometimes pays more in regional areas, and that includes Newcastle, the Central Coast and Maitland. Right now an Apricus heat pump replacing an electric tank gets $1,600 in combined rebates there.
What these numbers leave out
- Your own plan. We used EnergyAustralia’s standing offer for the Ausgrid area from 1 July 2026. Many people are on a market offer with different rates, so your figures will differ.
- Solar. A heat pump running in the day on your own solar costs less again.
- Winter. Heat pumps work less efficiently in cold air, so winter costs sit at the top end.
- Heat lost from the tank. Every tank loses some heat overnight. We didn’t model that for either system.
- The purchase price. These are running costs only. A heat pump costs more to buy than an electric tank, so get a quote before you work out the payback.
How we worked this out
- Sources read (8):
- EnergyAustralia, NSW residential standing offer tariffs, Ausgrid zone, valid from 1 July 2026, GST inclusive.
- Ausgrid, “Controlled load pricing” (read 12 October 2026).
- ACT Government, buyer’s guide to hot water heat pumps (heating a 300 L tank to 60°C: 14 kWh electric; heat pump COP 3 to 4).
- NSW Government, hot water upgrade incentive (read 12 October 2026).
- Apricus heat pump spec sheet (read 20 October 2026).
- Envirosun heat pumps (read 20 October 2026).
- iStore R290 brochure (read 20 October 2026).
- Hogan Hot Water, heat pump hot water (combined rebates; read 21 October 2026).
- What we calculated: yearly kWh is 14 kWh a day times 365, divided by the COP. Cost is kWh times the rate, plus the extra controlled-load supply charge. Every rate is from the EnergyAustralia table.
- What no single source states: the saving against a tank that’s already on controlled load. That figure is ours.
- Our own figures: the federal STC amount and the regional Apricus rebate are ours, as at October 2026.
- Checked: October 2026. Power prices change every 1 July and rebates change during the year. We’ll update this post when they do.
Talk to us
Thinking about swapping your electric tank for a heat pump? Hogan Hot Water handles all rebate paperwork as part of the quote. We install across Newcastle, Lake Macquarie, Maitland and the Central Coast.
Call 0488 029 618These are estimates for a full 300 litre tank heated every day, at EnergyAustralia’s standing-offer rates for the Ausgrid area from 1 July 2026. Your plan and hot water use will differ, so your costs will too. Rebates change and depend on the model and where you live. Checked October 2026.