Is there a hot water system rebate?

Fast read

Governments and utilities in Australia offer various rebates and incentives to promote energy-efficient hot water systems. The Federal Government provides rebates through the Small-scale Renewable Energy Scheme (SRES), while states like Victoria, and New South Wales (NSW), offer their own additional rebate programs.  

These rebates can cover a portion of the installation cost or provide subsidies for specific types of systems. Additionally, utility companies from time to time may offer their own rebates or discounts.

It's important to stay updated on the availability and requirements of these programs, as they may change over time. Seeking advice from local suppliers or installers is recommended to explore the available options and make informed decisions to save you money.

Do new hot water system rebates exist?  

The Australian Federal Government has put into place several rebates designed to encourage the adoption of renewable energy sources, one of which is the Small-scale Renewable Energy Scheme (SRES). In operation since 2017, this hot water system rebate targets explicitly installing approved solar or heat pump water heaters.

Federal Government Rebate is available for all

The rebate program is an indirect rebate system, incentivising the purchase of eco-friendly hot water systems through a complex but beneficial process of earning and trading certificates. Each STC represents a certain amount of electricity generated or displaced by a small-scale renewable energy system. 

hot water tank being worked on

What hot water heater products are eligible?

When you purchase and install a solar water heater or heat pump, you earn a certain number of STCs as the owner. You can redeem the dollar equivalent value of these certificates at the point of sale by assigning them to an approved Renewable Energy Certificate Trader. This reduces the system’s upfront cost significantly and incentivises homeowners to invest in these renewable energy hot water-producing technologies.

On the other hand, the owner also has the option to trade these STCs on the open market. Similar to shares in a stock market, the value of STCs fluctuates based on demand and supply dynamics. For instance, when demand is high, and supply is low, the value of each STC increases. Owners can monitor the market and choose to sell their STCs when they are worth the most, potentially recovering even more of the cost of the system. Nevertheless in reality most consumers could not be bothered and just take the upfront credit from the equipment installer.

The STC system does have certain restrictions and requirements. One is, that only systems installed by Clean Energy Council-accredited installers and those listed on the Register of Solar Water Heaters can generate STCs. The number of certificates each system can create depends on the amount of renewable electricity it generates or displaces, which is influenced by factors like the system’s size, technology and location.

Overall, the STC scheme represents an essential and effective initiative by the Australian Federal Government to promote the use of renewable energy. Providing financial incentives helps reduce the cost of renewable energy technologies, encouraging more people to make sustainable choices. This benefits the environment and helps Australia achieve its Clean Energy Targets.

What about State Government based new hot water system rebates?

For the same environmental reasons as the Federal rebate, some States have also decided to support purchasing more environmentally friendly hot water systems. For example, the Victorian government offers rebates for installing solar hot water through its solar hot water system rebate program. 

hand holding Australian money

New South Wales

The government of New South Wales (NSW) has a cash-back plan for homes that want to swap their old hot water system for one that saves more energy. This plan is part of the Energy Savings Scheme, which aims to cut down on the energy we use and help the environment.

Changing to a hot water system that uses less energy (like heat pumps or solar hot water systems) can lower the amount of energy and water your home uses. This means you could pay less for your electricity bills over time. Plus, this swap can greatly lessen the harm your home does to the environment, so it’s a win for both your pocket and the planet.

Still, there are some costs to think about. You need to pay a certain amount towards the price of your new hot water system and the cost to install it. The total amount you end up paying will depend on a few things. These include the model you pick, the type of system you’re using now, and how complicated the installation is. There might also be extra costs for things like the installer’s travel time and transport, any extra pipes, and so on.

Here’s how to swap your hot water system rebate

  1. Contact approved suppliers: Speak with suppliers who are allowed under the scheme. They can check if you qualify and give you a price quote. It’s a good idea to ask for quotes from more than one supplier. This can make sure you get the best deal and system for what you need. Each supplier works on their own, so they cover different places and offer different products and services.
  2. Choose the right hot water system: Depending on your home’s specific setup and what you need, your supplier can help you find the right energy-saving hot water system.
  3. Sign the form: Pick your preferred supplier who is approved under the scheme and sign the form they give you.
  4. Installation: The supplier will send a qualified electrician and plumber to put in your new hot water system. They will also show you how to use it.
  5. Get rid of the old system: The electrician or plumber will take away and recycle your old hot water system and any other equipment that’s replaced.

After the new system is installed you should have a hot water supply that uses less energy, and should notice over time a lower electricity bill. If you have any questions or problems after the installation, get in touch with your original supplier.

Approved suppliers

You can find a list of approved suppliers in the Who can help with energy upgrades’ section on the relevant government website” part of the government website. Always check if the supplier works in your area before moving ahead. This will make sure you can get help if you need it after the installation.

Electric hot water tank on the road

Victoria

The Victorian Energy Upgrades (VEU) program is an initiative by the Victorian State Government designed to encourage households to replace inefficient electric storage, gas storage, or gas instantaneous hot water systems. The goal is to reduce fossil fuel energy consumption, which in turn can lead to cost savings on energy bills and help combat climate change. Water heating can account for up to 35% of a household’s energy bill, but with an efficient hot water system, these costs can be significantly reduced.

Eligibility for the program is as follows:

  1. The participant must be from a Victorian household.
  2. The current system should be an inefficient electric or gas hot water system.
  3. Participation is voluntary.

Even households in private rental properties are eligible for this discount in Victoria

Landlords and tenants should collaborate on these upgrades because the landlord gains a new environmentally friendly HW unit, and the tenant experiences lower electricity bills. This program approves upgrades limited to heat pump hot water systems and electric-boosted solar hot water systems, both recognized for their energy efficiency. This means those 2 hot water technologies are the only ones which will get a rebate.

It’s essential to select a hot water system suitable for your household’s size to avoid running out of hot water. The Victorian Government provides guidelines to assist in selecting the appropriate system, and you can check if your preferred HW system is eligible here.

Discount on installation of hot water systems

  1. Install an approved product: The product installed should be from the approved product list, which can include a water heater – heat pump or a water heater – electric boosted solar. It’s advisable to research these products for their quality and suitability.
  2. Work with an accredited provider: Collaborate with a provider accredited under the VEU program. These providers may offer different products, services, expertise, and costs, so it’s recommended to obtain quotes from several to find the best deal. They will handle the discount process and guide you through the necessary steps.
  3. Decommission the inefficient system: The old, inefficient electric or gas hot water system must be decommissioned.

Accredited providers play a critical role in the VEU program. They may use their own tradesperson or collaborate with one of your choosing. They will explain the program steps, the types of products that qualify for a discount, and the qualifications required by the person installing the system.

The amount of discount offered depends on the type of system being replaced and installed. For instance, if you’re replacing an inefficient electric water heater with an electric-boosted solar water heater or a heat pump water heater, you can expect indicative discounts of $1,320 and $900, respectively. For replacing an inefficient gas water heater with a heat pump water heater or an efficient electric-boosted solar water heater, indicative discounts are $420 and $540, respectively.

However, note that these figures are indicative and based on a certificate price of $60. The accredited provider determines the final cost, which includes the discount and depends on various factors like fluctuating certificate prices, location, installation expenses, and the provider’s administrative costs.

Eligibility requirements for hot water system rebates:

  • You must be replacing an existing hot water system that is at least 3 years old (since you bought it)
  • Own or currency occupy a home valued under $3 million
  • Install a system on the Clean Energy Regulator’s Register of solar water heaters
  • Total household income must be less than $180,000 before tax per annum
  • Be a Victorian resident

In conclusion, the VEU program is a substantial initiative by the Victorian State Government that encourages households to shift towards more energy-efficient hot water systems, leading to cost savings and environmental benefits.

solar hot water collectors

Queensland

Queensland was one of the early adopters of solar energy in Australia, with various initiatives and rebates to encourage residents to switch to renewable energy sources. One of these programs was the Queensland Government solar hot water system rebate, which provided residents with up to $1,000 in rebates for installing solar hot water heating systems. However, this specific rebate program expired over one decade ago in July 2012.

Interest-free loans

Despite the conclusion of the solar hot water system debate, Queensland residents can still benefit from the Federal Government’s support as well as a minor form of State Government support.

For instance, the state offers interest-free loans for the purchase of solar hot water systems. This financial incentive is a small but sometimes useful advantage for residents considering switching to a solar hot water system. These interest-free loans can make the initial purchase and installation of a solar hot water system a little more affordable.

It’s also worth noting that even without a specific state rebate, switching to a solar hot water system in Queensland can provide significant energy savings. Solar hot water systems capture and use the sun’s heat, especially in the hot Queensland climate. Therefore this technology can lead to substantial savings on energy bills.

In conclusion, while the Queensland Government solar hot water system rebate is no longer available, there are still some financial incentives for Queensland residents to switch to a solar hot water system. These include interest-free loans and the opportunity to get the Federal STC rebate under the Federal SRES. Beyond these financial incentives, the environmental benefits and the potential energy savings make installing a solar hot water system in Queensland a worthy consideration.

man having a shower

South Australia

The South Australian State Government has precise rules as to what water heater can be installed – if you build a new home or replace an existing water heater. They can be found here.

The Retailer Energy Productivity Scheme (REPS), previously named the Retailer Energy Efficiency Scheme (REES), represents a South Australian initiative. Its goal is to reduce energy consumption by promoting the adoption of energy-efficient appliances in households and businesses through State support.

One of the focuses of this scheme is to encourage the switch to more energy-efficient hot water systems. When a consumer opts for a qualifying energy-efficient hot water system, they can be eligible for a point-of-sale discount. The advantage of this type of rebate is that it reduces the initial out-of-pocket expense for the consumer, making energy-efficient hot water systems more affordable.

How the process works:

  1. Find an eligible product: The first step is to find a hot water system that qualifies for the REPS rebate. This will typically be a system that is deemed energy-efficient and is likely to include solar hot water systems, heat pump water systems, and possibly high-efficiency gas systems. The specific systems that qualify can change, so it’s important to check the current list of eligible products.
  2. Obtain a quote: The next step is to obtain a quote for the system and installation. The quote should state the rebate amount claimable through the REPS. Some companies might include the point-of-sale discount in this quote, making it easier for you to understand the final price you’ll need to pay.
  3. Install the system: Once you choose your system and accept the quote, a licensed professional must perform the installation for it to qualify for the rebate.
  4. Claim the rebate: In most cases, the company that provides your system will handle the rebate process. They will include the rebate as a point-of-sale discount, which means they will subtract it from the total price at the time of purchase. This makes the process simple and straightforward for the consumer.

Not all SA hot water companies provide a rebate

It’s important to note that not all SA hot water companies participate in the REPS scheme, so you should confirm with your supplier that they can process the rebate on your behalf. In case they don’t, you’ll need to find a retailer that does, or you’ll have to handle the paperwork for the rebate yourself.

The value of the rebate can vary depending on the type of system installed, the efficiency of the system, and other factors. It starts at around $500. It’s also important to remember that these rebates are subject to change as the government updates its energy efficiency schemes and targets.

To qualify for the rebate one must:

  • Be a South Australian resident
  • Own the property where the hot water system will be installed (Note: Shame as renters deserve lower electricity bills too)
  • Replace an existing system that is at least 7 years old.
hot water tap running
Gas hot water heating in general is on its way out

Western Australia

Currently, there are no State Government rebates available in Western Australia for the replacement of a hot water system with more efficient technology, other than the Federal Rebate, which everyone can get.

Tasmania

There’s not much happening here, unfortunately. Aurora Energy, together with the Tasmanian Government, set up the Tasmanian Energy Efficiency Loan Scheme (TEELS). This helps homeowners and businesses get solar hot water systems by giving them interest-free loans. Businesses can borrow as much as $40,000, and homeowners can get anywhere from $500 to $10,000 with no interest.

Northern Territory

The Northern Territory started their clever energy cash-back plan called the Smart Energy Grants program in 2018, and now it’s worth around $4 million. The plan gives half the cost back for improvements that save energy at home. This includes solar hot water systems.

ACT – Canberra

In Canberra, the Australian Capital Territory (ACT), there are several deals for residents who want to swap or get new hot water systems, especially ones that save energy or use clean energy sources.

  • Next Generation Energy Storage Program: With this plan, ACT households can get help to put a battery storage unit in their homes. While this isn’t a cash-back deal for hot water, a battery storage system can be really useful with a solar hot water system. It stores any extra solar power you have, so you can heat your water even when there’s no sun.
  • ACTSmart Energy Efficiency Improvement Scheme: Under this plan, energy companies that have to take part provide a range of services to homes and small businesses. This is to help them save energy and reduce how much energy they use and how many greenhouse gases they produce. The services include putting in appliances and equipment that save energy, which might include energy-saving hot water systems. For instance, ActewAGL offers a deal where you can swap to an energy-saving electric water heater and get $500* off the price. They also give you a further $250* off your ActewAGL electricity bill. But you need to use one of their approved suppliers to get these benefits.
  • The Sustainable Home Interest-free Loan: The ACT government gives interest-free loans up to $15,000 for homes that qualify. This helps them improve their energy efficiency, including getting efficient hot water systems.

It seems like heat pump technology and solar hot water are the two types of tech that get the most support from the Federal and State Governments when you’re buying a new water heater.

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