If you’ve opened your Synergy bill recently, you know the feeling of “bill shock” is becoming all too common in WA. But here is the good news: Perth’s unique climate and energy tariffs have created a perfect storm for slashing those costs. We find that for most households, the hot water system is the single biggest energy guzzler, often accounting for 30% of the total electricity usage.
Understanding Heat Pump Efficiency in Perth
Heat pump hot water systems are often described as “reverse fridges” because they move heat rather than creating it. While a traditional electric element uses 1kW of power to generate 1kW of heat (a 1:1 ratio), a high-quality heat pump can use that same 1kW of power to transfer 4kW of heat into your water. This 400% efficiency is known as the Coefficient of Performance (COP).
Perth sits in a sweet spot for this technology. Our winters are mild enough that the units rarely need to engage inefficient “booster” elements, and our long, hot summers allow the systems to run at maximum efficiency. We consistently see local systems achieving a seasonal average COP of 3.5 to 4.0, significantly outperforming the national averages often cited in brochures.
The Real Savings Numbers (2025/2026 Data)
The savings potential has changed drastically with the introduction of new time-of-use tariffs. We have broken down the running costs based on current Synergy rates to show you exactly where the money goes.
Comparative Annual Running Costs
| System Type | Tariff / Rate | Est. Daily Cost | Est. Annual Cost |
|---|---|---|---|
| Electric Storage (Old) | Standard Home Plan A1 (~32c/kWh) | $3.20 | $1,168 |
| Gas Storage (4 Star) | Standard Gas Tariffs | $1.65 | $600 - $800 |
| Heat Pump | Standard Home Plan A1 (~32c/kWh) | $0.96 | $350 |
| Heat Pump (Optimised) | Midday Saver (Super Off-Peak ~8.4c/kWh) | $0.25 | $91 |
The “Midday Saver” Advantage
Most Perth homeowners are unaware of the massive savings available simply by changing when their water heats up. By switching to the Synergy Midday Saver plan and setting your heat pump’s timer to run between 9am and 3pm, you access the “Super Off-Peak” rate of roughly 8.4 cents per kWh. This strategy can bring your hot water bill down to under $100 per year—less than the cost of a single coffee per month.
Payback Period and ROI
The “payback period” is the time it takes for your bill savings to cover the cost of the new system. While prices for hardware have stabilized, labor costs in WA have nudged installation prices slightly higher in 2026.
Scenario A: Replacing Electric Storage
- System Cost: ~$3,800 - $4,500 (fully installed)
- Annual Savings: ~$800 - $1,000 (using Midday Saver)
- Payback Time: 3.5 - 5 years
- 10-Year Savings: Over $8,000
Scenario B: Replacing Gas
- System Cost: ~$4,200 - $5,000 (may require electrical work)
- Annual Savings: ~$500 - $700 (eliminating gas supply charges helps massively)
- Payback Time: 6 - 8 years
- 10-Year Savings: Over $6,000
The financial case for replacing gas is improving rapidly. Alinta Energy’s daily supply charges have risen significantly in recent years, meaning you pay hundreds of dollars a year just to stay connected to the gas grid. Disconnecting gas entirely removes this fixed cost, accelerating your payback period.
Government Rebates: The STC Factor
The federal Small-scale Renewable Energy Scheme (SRES) is still the primary vehicle for reducing upfront costs. You receive Small-scale Technology Certificates (STCs) based on the system’s efficiency and your location.
Perth is classified as Zone 3. However, it is critical to note that the scheme is slowly phasing out. The “deeming period” (the years of operation you can claim upfront) drops by one year every January 1st.
- In 2026: You can claim 5 years worth of deemed savings.
- The Value: This typically translates to a point-of-sale discount of $700 - $900 depending on the specific model.
We handle the trading of these certificates for you. The price you see on your quote will already have this rebate deducted, keeping the process simple.
Factors That Affect Your Savings
Noise Regulations
Perth’s density means your neighbor’s bedroom window might be close to your water heater. New regulations require heat pumps to operate quietly, typically under 45 decibels at the boundary. Choosing a premium quiet model like a Reclaim or Stiebel Eltron ensures you won’t face council complaints or forced relocation costs later.
Hard Water Considerations
Parts of Perth have “hard” water with high mineral content. Scale buildup can kill a heat pump compressor faster than a standard element. We strongly recommend systems with active corrosion protection or purchasing a system specifically designed for hard water if you live in hills areas or near the coast.
Solar PV Integration
Do you have rooftop solar? A heat pump acts like a thermal battery. Instead of exporting your excess solar power to the grid for a measly 2.5 - 5 cents, you can use it to heat your water. This effectively makes your hot water free for 9-10 months of the year.
Real Example: The Nedlands Retrofit
We recently helped a family of four in Nedlands switch from a failing gas storage unit to an iStore heat pump.
The Before:
- Gas Bill: ~$750/year (including supply charges)
- Issues: Running out of hot water, pilot light blowing out.
The After:
- Tariff Switch: Moved to Midday Saver.
- Timer Setup: Unit runs 10am - 2pm.
- New Annual Cost: ~$95 (estimated).
The Result: They saved over $650 in the first year alone. Because they disconnected their gas cooktop and removed the gas meter entirely, they saved an additional $300/year in supply fees, bringing their total annual benefit to nearly $1,000.
Is a Heat Pump Right for You?
While the numbers are compelling, heat pumps aren’t a universal fix.
You should switch if:
- You currently have an electric storage cylinder (the “money pit”).
- You have rooftop solar panels.
- You are planning to get off gas entirely.
- You have a well-ventilated outdoor space or a large garage.
You might hesitate if:
- You have absolutely no outdoor space (apartments).
- Your switchboard is extremely old and needs a $1,000+ upgrade to handle the new circuit.
- You have a brand new 5-star gas continuous flow system that is working perfectly.
Get Your Personalised Savings Estimate
Every home in Perth is different. The orientation of your roof, the size of your family, and your existing plumbing all play a role in the final calculation. We can review your current setup and give you a transparent, down-to-earth assessment of what you will actually save.
Contact us today for a free assessment. Let’s crunch the numbers together and see if we can turn your hot water bill into a thing of the past.
