TOP TIPS: Buying a heat pump

Heat pump hot water systems have never been so popular. Over the last year there’s been a massive increase in hot water heat pump installations in Australia.

Federal and State governments have recognised that heat pumps are good for the environment, good for mitigating climate change, and can reduce the cost of living for householders. Several governments now offer rebates for householders who install a heat pump.

However, the increase in installations has seen an increase in consumer complaints about heat pumps – heat pumps installed in lounge rooms and toilets when they should be outside, units stopping working in just a few months, manufacturers not replacing broken units, etc.

Government heat pump rebates appear to have privileged quantity over quality, and Australia has a big problem developing.  

“We’re seeing what we call ‘rebate chasers’, says Chris Taylor, Managing Director of Reclaim. “What they're interested in doing is driving as much volume as quickly as possible while the rebate schemes are in place, and not really taking responsibility for the installation quality.”

Taylor says Australia is now being flooded by cheap, unreliable products, installed by inexperienced people, and we are at risk of becoming a dumping ground for ineffective products that will do little to reduce climate change, or the cost of living.

Taylor argues that the rebate schemes need to be urgently revamped, and we urgently need minimum energy standards for heat pumps.

While we wait for governments to make that happen, anyone wanting to buy a heat pump now needs to be wary - householders can only access a rebate for a hot water heat pump once so it’s important to do some research and choose wisely.

Taylor's advice on how to buy a hot water heat pump while we don’t have minimum energy standards, but we do have rebates, is to consider the following issues:

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Does it rely on an electric resistive element for back up?

Taylor says there are a lot of heat pumps coming into the market – he estimates 90% of the heat pumps now being sold – that he calls “faux heat pumps.”

These are ones that have an electric element in them as a backup system. This makes them much less efficient than premium models which don’t have an electric element at all. The electric element results in a much higher energy draw, so it will cost more to run over the life of the product.

Furthermore, these models heat up much more slowly, particularly at night-time or in climates like Melbourne.

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‍What type of refrigerant does the system use?

All heat pumps need a refrigerant to effectively transfer heat from one location to another. Refrigerants contain a range of different chemical compounds, some of which have a significant impact on global warming when released into the atmosphere.

Some of the cheaper heat pumps that are now flooding the Australian market are being used with refrigerants with high global warming potential (GWP) which are being banned in Europe and the US.

For example, R-134A has a relatively high global warming potential of 1430, “which means that when the gas gets out, it's a very nasty gas and does enormous environmental damage,” says Taylor.

So far, the Victorian Government is the only Government in Australia to ban heat pumps with R-134A from their rebate program. This will take effect from July 1 this year.

The refrigerants that are considered the most environmentally friendly are natural refrigerants like ammonia (NH3), carbon dioxide (CO2), and hydrocarbons.

Taylor says a good refrigerant is R-744, which is CO2, a natural refrigerant that has a global warming potential of 1, “so if the gas escapes, it's not going to have any impact on the environment at all.”

There is some debate about another natural refrigerant, R-290, “but it's safe to assume it has a global warming potential of 2.”

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‍How efficient is the heat pump?

There are currently no controls around how different heat pump products report their efficiency. We have no government-regulated energy star-rating system for hot-water heat pumps, like we have for other electrical appliances.

The only way to compare the energy efficiency of different brands is by looking at the number of small-scale technology renewable energy credits, STCs, that they've been allocated by the Clean Energy Regulator.

Overall though heat pumps that use CO2 as a refrigerant are the most efficient because they don’t need a back-up electric-resistive element - they don’t have one). They also have a quick re-heat rate, and can heat water under outdoor ambient temperatures as cold as minus 15 degrees Celcius.

Cheaper heat pumps are often made from lower grade materials and require more energy to achieve the same outcome as premium heat pumps. This results in higher energy consumption and higher energy bills.

“The best units have an energy draw of about 3 kilowatt [hours] compared to an electric immersion unit, which will draw, depending on its age, 12 to 15 kilowatt [hours] to run.”

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How long has the brand been in the market?‍

Taylor says consumers can be confident their heat pump “has been installed properly and is safe, and won't do any damage to their house or to them” if it’s been installed by an Australian manufacturer already established in the hot water market, namely Rheem, Renai, Dux, Stiebel, Reclaim.

Taylor is concerned that the rebate schemes have encouraged inexperienced operators: “You've got people who did lighting … who have now jumped into hot water.”

“I don't know what they know about hot water, because they were giving away light globes for free, but now they're doing hot water,” says Taylor. “That's a miraculous shift in terms of business model and expertise that they must have developed.”

Traditionally, hot water system sales were run through a plumbing merchant, such as Reece or Tradelink, which plumbers would access.

But now, “anyone can go to China and bring in a cheap heat pump system,” says Taylor. He argues that some of the checks and balances, and quality control mechanisms that the plumbing merchants provided, have now disintegrated.

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Can you monitor the system yourself?

Good heat pump systems provide a monitoring tool that allows you to look at “what the consumption is and hold the manufacturer accountable.”

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How flexible is the system?

Some householders have been told they can’t change the settings on their heat pump.

Taylor advises consumers to choose a system that allows you to adjust the operating parameters to suit your particular requirements.

A household with solar PV for instance is likely to want to run their hot water heat pump during the day from 10 to four, when the PV is working at its optimum level. This could effectively provide free hot water.

A household with a home battery might “want a system whereby you can program it to run at night and draw off the battery.”

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What sort of warranty does it have?

The warranty periods for hot water heat pumps vary enormously from 0 to 10 years, depending on the manufacturer, model, and specific terms and conditions.

A solid warranty from a company that will still be around in a few years is crucial.

“If Rheem, Renai, Dux, Stiebel, those sorts of businesses were offering you a long warranty, I'd be very, very confident that they're going to be around to back up their warranty.”

“If someone who's evolved from the lighting industry offered you a 7-year warranty, then I'd be questioning whether they actually will still be in the hot water marketplace in 7 years from now.”

“I've heard anecdotal stories from the marketplace, where the system has failed, [the consumer] has complained and asked for the system to be replaced, and the manufacturer has just said, we'll give you what you paid for it, here's your $33 back.”

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In summary, buy the optimum system you can afford

Taylor’s primary advice is to take advantage of the current support from government to purchase the best heat pump system you can afford.

“You’ve got a lot of support from the government so you need to be thinking about what is the optimum system you can get, because you're not going to get that support again,” says Taylor. “Once these programs end, then they end.”

“If you’ve got $2,500 - $3,000 worth of government rebates, from my perspective I'd be using that to buy premium products, not a $33 product.”

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And finally, ask yourself two questions

“Is this a hot water system that's been designed to maximise the rebates? In other words, to put the maximum amount of money into the back pocket of the people supplying it and minimise [their] cost?”

“Or is this going to be a product that allows me to take control and manage my energy usage as an energy efficient product, in concert with existing renewable technologies or planned renewable technologies?”

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You can hear an interview with Chris Taylor discussing the problems with hot water heat pump installations in Australia on the next SwitchedOn podcast.

For more information on buying a heat pump read this article from independent energy advisor, Tim Forcey.