If you choose to upgrade to a heat pump hot water system, chances are you’re looking to shave some money off your hot water bill. You’re likely to hear plenty of promises about just how much you can save – if you want to be sure, you can look to CoP to get a better idea.
What is CoP?
A heat pump’s Coefficient of Performance, or CoP, is basically a measure of how efficient it is. It’s expressed as a number and shows how much heat energy it can produce from the electricity supplied. So, if a heat pump has a CoP of 3, it will produce 3kW of heat energy while drawing 1kW of power.
This can help you figure out savings because a traditional electric hot water system – the most common type in Victoria – will use 1kW of electricity for 1kW of thermal output. If you upgrade from that to a heat pump with a CoP of 2, you’ll be paying for 50% less electricity. Gas heaters do perform better, but only the absolute highest efficiency – those with 7 star energy ratings – can perform comparable to a high efficiency heat pump. Keep in mind that this doesn’t account for rising gas prices, which means even the best gas heaters are falling behind.
Can CoP change?
Yes, the CoP will change depending on the outside air temperature – since heat pumps extract heat from the air, the hotter it is, the less electricity you need. On cold days, the CoP will go down; on hot days, the CoP will go up. The key is to find a good average CoP, so that your higher energy savings on hot days can offset the lower savings on cold days.
If you live somewhere with regularly low temperatures, you should look for a heat pump that can handle that.
What CoP should I look for in my heat pump?
Since electric hot water heaters are 1:1, you can expect any heat pump with a CoP of 2 or above to make a difference to your hot water bill. However, since they are such efficient, advanced pieces of technology, there is a significant upfront cost associated with heat pumps. The purchase and install price may mean it doesn’t make much sense to upgrade – especially if you intend to move out soon, and the unit can’t pay for itself over time.
If you plan to be in your home for quite a while, you should generally look for the highest efficiency you can afford. Once the unit pays for itself in savings, everything else is a bonus that frees up money for whatever you’d like.
To help you understand the differences in CoP, let’s work through two practical examples.
Let’s start with our assumptions. These examples work off a typical 4 person Victorian household, which will use around 150L of water a day. We assume you’re upgrading from an electric storage hot water system, as these are the most common type in Victoria. If this system runs on the peak tariff, it’ll cost around $920 a year. We assume a peak tariff of 26.16c/kWh and an off-peak tariff of 17.93c/kWh. With that, let’s get into the examples.
Example 1 – Midea 280L Heat Pump
The Midea 280L Heat Pump will cost between $2,000 – $3,000 (after rebate) to supply and install. Let’s split the difference and assume it’ll set you back $2,500. You can expect a CoP of around 3.
At 3 times efficiency, that $920 hot water bill would be reduced to around $306 annually. That means the system will pay itself off over four years. However, that’s assuming you’re always using the heat pump – which might not be the case. (It also assumes the system will last that long, which isn’t a sure thing. We talk more about reliability in our blog post here.)
The Midea 280L, and many cheaper systems, requires an electric booster for lower temperatures. In this case, the booster kicks in when the outside temperature drops below 5°C. While you can manually set the unit to never use the electric booster, that could mean you’re without hot water on a cold morning.
If you’re on a Time of Use electricity plan, you can save by running your heat pump on off-peak rates between 10pm and 7am – but if the pump has to rely on an electric booster, you won’t save much compared to an electric storage system running off-peak. Those who shivered through Melbourne’s 2022 cold snap will know that nights and mornings below 5° are hardly unprecedented.
You’ll ultimately still be saving compared to an entirely electric system, but the electric booster does mean it’ll take longer for the system to pay off if you have a lot of cold nights.
Example 2 – Reclaim Energy Heat Pump
A Reclaim Energy CO2 Heat Pump will run you around $5,000 after rebate. With an average CoP of 5, that $920 annual hot water bill becomes $184, a difference of $736.
On first glance, that’s a little over six and a half years to pay off. However, there are some other factors to consider that can make the math more favourable.
The first thing to consider is that Reclaim’s offering works at temperatures as low as -10°C and doesn’t need an electric booster. That means you won’t find yourself paying more than expected when the weather gets cold.
Plus, you can reasonably expect the heat pump to last that entire time. The pump itself has a six year warranty, and a stainless steel tank comes with a 15 year warranty.
But where savings really come in is with efficiency. The system can heat a 315L tank (enough for a family of six, let alone four), within three hours. Using largely off-peak, for those with a Time of Use plan, will reduce costs even more.
With a built-in smart controller, you can integrate the system with an existing solar system. The heat pump then intelligently uses as much energy from solar as possible, as the savings are much higher than feed-in tariffs. With the right solar system, you can get hot water practically free – the system pays for itself over its warranted lifespan, which means you’re guaranteed to make the money back.
If you’ve already got solar panels but are still using an electric hot water system, switching to a heat pump could free up lots of generated electricity that’s currently being used on the less efficient system.
Keep in mind, the larger your household is, the more you stand to save. An upgrade becomes increasingly worth it the more people are using hot water.
Stay informed about heat pumps
Whether or not you should upgrade your hot water system depends on plenty of factors – the size of your household, your current system, if you have solar panels, and more.
The other pages of our Learning Centre can help you get more detail on those factors – along with all the information you need to become a heat pump expert.