Hot Water Cost

The NSW heat pump hot water discount

How much the Energy Savings Scheme takes off a heat pump, and why replacing gas gets you less than replacing electric.

Last checked

Replacing an old electric water heater with a heat pump gets you up to $640 off in NSW. Replacing a gas water heater gets you up to $330. It is an upfront discount taken off your quote, not a cheque afterwards.

How much you get

NSW Energy Savings Scheme heat pump discount by existing system, 2026
You are replacingDiscount
An electric water heaterup to $640
A gas water heaterup to $330
Energy Savings Scheme discount on a heat pump

Official ranges from NSW Climate and Energy Action. The exact figure depends on the model installed.

Show these figures as a table
Item From To
Replacing electric $405 $640
Replacing gas $0 $330

The exact amount depends on the model you pick. For an electric replacement the typical incentive runs $405–$675.

Why gas gets a smaller discount

The scheme pays for the electricity a new heat pump saves. An electric tank uses far more electricity than a gas one, so swapping it out saves more, and the discount is bigger.

How to get it

  1. Get quotes from more than one installer who offers the Energy Savings Scheme discount.
  2. Check each quote shows the discount as a separate line.
  3. Complete the paperwork your installer gives you, and they claim it.