Did you know that traditional hot water systems account for around 15% to 27% of total energy use?

A NSW study shows that up to approximately $1,670 in savings is possible if switching to a Domestic Hot Water (DHW) heat pump.

If you are looking for information on a replacement (or new) hot water system for your home and you want to know the benefits of a DHW heat pump vs. traditional electric water heaters ora  gas hot water system, this blog (5-minute read) is for you

In this guide we will cover

1. If you have a hot water system, when should you consider replacing it?
2. What is Domestic Hot Water (often referred to as DHW) heat pump, and what are the benefits ?
3. How to choose the right size of DHW heat pump for your home?
4. What DHW heat pump rebates are available to help reduce your upfront cost?

What a DHW Heat Pump Looks Like: The stylish Viessmann R290 DHW Heat Pump range.

When should you replace your existing hot water system?

If you have an existing gas hot water system, electric water heater or DHW heat pump, and you are wondering if you should be looking at replacing it, below are a few signs that your hot water system may need replacing soon. Our advice is always to start researching as soon as possible so that your current unit doesn’t fail on you, leading you to rush your purchase for a replacement and ending up with a new system that doesn’t meet your current or future hot water requirements.

Why Choose a Domestic Hot Water Heat Pump?

There are 3 compelling reasons to switch to a Domestic Hot Water heat pump:

1. Energy Efficiency & Lower Electricity Bills

In comparison to traditional gas hot water systems or electric water heaters, DHW heat pumps are more energy efficient. As an example, the Viessmann R290 DHW Heat Pump is up to 70% more energy efficient, helping to significantly reduce your power bills.

How are DHW Heat Pumps so Energy Efficient?

DHW heat pumps generate a lot of their energy efficiency by their ability to extract heat, also known as ‘thermal energy’, from ambient air (rather than generating heat via resistive electric elements). The DHW heat pump then uses this thermal energy to increase the pressure and temperature of the refrigerant in the system, which is, in turn, then used to heat the water inside the tank. See diagram: Viessmann Vitocal 161-A DHW Heat Pump Technology. 1kW electricity input generates more than 4kW heat output. In the industry’s terminology, this is COP=4. The higher the COP (coefficient of performance), the higher the energy efficiency. In a typical Australian climate, this technology enables DHW heat pumps to use significantly less electricity than conventional hot water systems, which have an average COP=1.

2. Reduced Environmental Impact

Because you are using less electricity from the grid, your DHW heat pump will reduce the carbon emissions of your home. By selecting an R290 DHW Hot Water Heat Pump, you will further reduce your environmental impact. R290 is a natural refrigerant with a Global Warming Potential of 3 (GWP=3) and an Ozone Depleting Potential of 0 (ODP=0). You can read more about the benefits of R290 Refrigerant by clicking on the below.

3. Better Suited for Many Climates

Even in cooler regions, Domestic Hot Water (DHW) heat pumps are better engineered to operate reliably in colder conditions. The Viessmann R290 DHW Heat Pump is designed in Germany for all Australian conditions with an operating range from -15°C/43°C. The operating range of your DHW heat pump is an important consideration if you live in a location that experiences cold winters of extreme changes in temperature across the year. The Viessmann R290 DHW heat pumps are also equipped with a heating element. This works as a back-up to ensure a continuous hot water to meet your lifestyle.    

How to Choose the Right Size and the Right Brand?

Getting the right size and the right brand of DHW heat pump is crucial to ensure you do not run out of hot water (if your system is too small) or that you are paying more than you need (if your system is too large).

As well as sizing your heat pump correctly, it is also important to select a brand that you can trust. There are a lot of brands on the market, but not all heat pumps are made equal. If you want a reliable, durable solution that gives you peace of mind for the long term, choose a brand that has a reputation for making high quality heat pumps. At Next Cycle, we have partnered with German brand Viessmann, because they have been manufacturing innovative, durable heat pumps that have provided households around the world with reliable hot water for over 100 years.

Selecting a brand and plumber, or installer, that you trust is important when getting a new DHW heat pump. Here are 5 of the other key factors to consider:

1. Household Size & Usage Patterns

Think about how many people live in your home, how many bathrooms you have, how many showers/dishes/laundry loads etc. It can also be helpful to think about the future. Will you have guests to stay, are you planning on having children/more children. Factoring all of these into your decision will help you to select the right size heat pump and future-proof your investment. The rule of thumb is 50L/person.

2. Climate & Ambient Temperature

Colder climates can reduce the operating performance of many heat pumps. You need to factor in the climate of where you live, and the location that you plan to install the unit (how much shade, sunlight, air flow it gets). Based on these factors, make sure you check that the operating ambient temperature range of your DHW heat pump meets your requirements. The Viessmann R290 DHW heat pumps have an operating ambient from -15°C/43°C and are equipped with a heating element. Designed to perform for Australian climates.

4. Save Money Upfront with Government Rebates

Choosing the right DHW heat pump can save you money on your power bills, but there is of course an upfront investment. The good news is that you can save money through the federal and state government rebates for hot water heat pumps. Further good news is that some of these rebates back be combined, saving you more and helping you to invest in a reliable, high-performance heat pump that future-proofs the hot water supply in your home. To find out more details on the Government Rebates available in Victoria, Tasmania, New South Wales, ACT, and Queensland, click here.

5. Check the Warranty, Service, and Support Program

Having the right warranty for your heat pump and a level of service and support that you can trust is an important factor in reducing longer-term costs related to your system. One helpful rule of thumb is that a well-designed and manufactured product will have a good warranty and care program. At Next Cycle, we recommend that customers should only buy DHW heat pumps with a comprehensive 7-Year tank warranty and 5-Year parts and labour warranties. 

A Checklist for Homeowners

Here is a checklist you can use to ensure you get good value, suitable performance, and take full advantage of rebates when considering installing a hot water heat pump system.

In Summary

Domestic Hot Water (DHW) heat pumps offer a powerful way to reduce energy bills, cut emissions, and future-proof your home. The higher upfront cost is often offset by:

✅ Lower running costs over time

✅ Generous federal and state/territory incentives

✅ Long system life & reduced maintenance (when backed by a comprehensive warranty and support program)

The key to getting the best system is choosing a brand you can trust, the right size DHW heat pump with the right features for your household’s usage and climate. Once you have selected your DHW heat pump, ensure the system and installer meet eligibility criteria for rebates and that the installation is well planned.

Would You Like More Information?

If you are a homeowner (or business owner) and you are looking for more information now, contact our Next Cycle today, and we will help you find the solution that meets your needs.

Frequently Asked Questions (FAQs)

1. How do I know if it is time to replace my current hot water system?

You should consider a replacement if your system requires frequent repairs, is causing your energy bills to go up, or if you are noticing a significant loss in performance. Identifying these signs early can prevent total system failure.

2. Are DHW heat pumps really more energy-efficient than electric water heaters?

Yes, they are significantly more efficient. DHW heat pumps are designed to use much less electricity to heat water than standard electric water heaters, which directly helps homeowners lower their monthly power bills.

3. What size DHW heat pump do I need for a family of four?

For a household of up to 4 people needing approximately 150-200 litres of hot water daily, a 250L model like the Vitocal 260-L is the recommended size for optimal comfort and efficiency.

4. Can these heat pumps operate in different climates and ambient temperatures?

Absolutely. Modern DHW heat pump technology is specifically engineered to be compatible with a wide range of different climates and temperatures, ensuring reliable hot water regardless of your location.

5. What should I look for to ensure a heat pump is reliable in the long term?

Beyond efficiency ratings, you should verify the manufacturer’s warranty, the availability of professional service, and the quality of their overall support program.

6. How do smart controls improve the efficiency of a DHW heat pump?

Smart apps allow users to monitor and manage their system remotely, ensuring it only operates when needed to save energy.