Two separate schemes, and they stack. The NSW discount is up to $640 replacing electric, up to $330 replacing gas, and the word to watch is “up to”. Here is what each scheme actually pays, what moves the number, what you have to do to qualify, and why nobody can legally give you a heat pump for free.
These are typical price ranges for the Illawarra and NSW, drawn from published 2026 industry pricing data — not a quote, and not our fixed prices. What your job actually costs depends on access, the age and condition of the plumbing, parts, and whether it is after hours. We give you a fixed price before we start work, so you are never guessing.
Hot water rebates in NSW are genuinely worth having, and they are also widely misrepresented. This page sets out what the two schemes are actually worth in 2026, what the conditions are, and where the marketing you have probably seen is overstating things.
Delivered through the Home Energy Efficiency Retrofits program. It is not a rebate you claim back — it is an upfront discount applied at the point of sale by an Accredited Certificate Provider. You sign a nomination form and the discount comes off the installation price.
Those are the NSW Government’s own figures, and they are the maximum, not the amount. NSW describes them as indicative only and lists what actually moves the number:
So anyone quoting you a flat “$640 off” before they have seen your place is quoting a ceiling, not a price. We work out your actual figure and put it in the written quote with the co-payment shown separately.
NSW’s own advice is worth repeating even though it points you at our competitors: “Find out your installation discount and get the best deal by comparing quotes from multiple installers who offer this incentive.” Source: energy.nsw.gov.au, updated February 06, 2026. Available now, no current closing date.
Gas-boosted solar was removed from the scheme on 1 July 2026. If you are offered an incentive on one, something is wrong.
The federal Small-scale Renewable Energy Scheme creates certificates when you install an eligible heat pump or solar hot water system. Their value is usually assigned to the installer and taken off your price. The Illawarra sits in Zone 3 (Illawarra, postcodes 2370-2579).
The Clean Energy Regulator publishes a certificate count for every approved model, but that published number is calculated on a 10-year deeming period. A system installed in 2026 is deemed for 5 years, so the real entitlement is half the published figure.
Their dollar value is then set by the certificate market, not by government. Anyone quoting you a fixed STC dollar amount as though it were a set rebate is either reading the register wrong or rounding in their own favour. We work it out on your actual model and put it in your quote.
STC value is calculated on a deeming period that drops by one year every 1 January until the scheme ends in 2030. It fell from six years to five on 1 January 2026 — a cut of roughly 17 per cent — and it drops to four years on 1 January 2027.
The practical implication is simple: if you are going to do it, the incentive will not be better next year. It will be smaller. That is not a sales line, it is how the scheme is legislated.
The NSW scheme requires the customer to pay a minimum co-payment of $200 excluding GST ($220 including GST) per heat pump water heater. A compliant upgrade therefore cannot be $0, and it cannot be advertised as free.
There are "free heat pump" offers running in NSW that do not comply with this. If someone is telling you it will cost nothing, ask them how they are handling the mandatory co-payment, and get the answer in writing.
Replacing an electric storage system with a heat pump is the case where both schemes apply at once: the NSW certificates come off at the point of sale, and the federal certificates are assigned to the installer and come off as well. Gas to heat pump also qualifies for both, though the NSW side is smaller because the energy saving being certified is smaller.
We are not going to publish a combined figure, for the same reason we have not published the individual ones. What we will do is put the actual numbers, for the actual unit, in a written quote, with the co-payment shown as a separate line so you can see exactly what you are paying.
See the full hot water cost guide for what each system type costs before incentives.
Announced 17 June 2026, this is a $557 million program with two parts. Zero-interest loans of up to $15,000 over 10 years, zero interest, for households with combined taxable income up to $210,000 — open now. And discounts of up to $4,000 for households with combined income up to $80,000, or an eligible concession card, expected later in 2026.
Whether hot water is an eligible upgrade under this program is not yet clear. The government announcement lists solar, batteries, insulation, reverse-cycle air conditioning, switchboards, ceiling fans and draught-proofing, and does not specifically name hot water. Some industry commentary says heat pumps are included. We are not going to tell you it is covered until the official program page says so — check it before you factor it into your budget.
If it does apply, the ordering matters: Existing federal and NSW incentives are applied first; the loan covers what is left. A zero-interest loan on the balance after rebates would make a heat pump considerably easier to fund.
We are a licensed plumbing and gas fitting business, which is a precondition for any of these incentives — an unlicensed install disqualifies the job. When we quote a heat pump or solar system we will tell you which incentives apply to your specific situation, what the minimum co-payment is, and what the net figure looks like, so you are comparing like with like against other quotes.
If the sums do not favour a heat pump for your household — and replacing gas, they often do not — we will say so rather than pushing the system with the biggest rebate attached to it.
The NSW Government publishes it as up to $640 when you replace an electric water heater with a heat pump, and up to $330 when you replace a gas one. Note the words "up to". NSW itself calls those figures indicative only, and says the actual discount varies with the installer you choose, your location and travel costs, the model, how complex the installation is, the compliance costs of securing the discount, and the installer's margin. It is applied as an upfront discount in the quote, not claimed back afterwards. NSW also advises comparing quotes from several installers who offer the incentive, which is sensible and we would say the same. Separately, the scheme requires you to pay a minimum co-payment, so no compliant upgrade is ever free
No, and you should be sceptical of anyone advertising that. The NSW Energy Savings Scheme requires the customer to pay a minimum co-payment of $200 excluding GST, which is $220 including GST, for each heat pump water heater. A compliant upgrade cannot legitimately be $0. There are non-compliant "free heat pump" offers circulating in NSW.
It is taken off the price. The NSW incentive is delivered as an upfront discount at the point of sale through an Accredited Certificate Provider — you sign a nomination form and the discount is applied to the installation. There is no application to lodge beforehand and nothing to claim back afterwards, unlike some other states.
Small-scale Technology Certificates are calculated using a deeming period that shrinks by one year every 1 January until the scheme ends in 2030. It dropped from six years to five on 1 January 2026, cutting the value by around 17 per cent. It falls to four years on 1 January 2027. If you are considering a heat pump or solar hot water, the incentive will not get better by waiting.
The system must be installed by a licensed plumber, and a licensed gasfitter where gas is involved. The product must be registered with the Clean Energy Regulator and carry a minimum five-year warranty for tanks up to 700 litres. There must be an existing hot water system being replaced — new installations do not qualify — and the old system must be scrapped rather than reused. For STC purposes, heat pumps are capped at 425 litres and solar at 700 litres. There is no household income test on the NSW incentive.
Replacing an electric system with gas-boosted solar, installing where there is no existing hot water system at all, and replacing an existing solar or heat pump system with another one. If you are unsure whether your situation qualifies, ask before you order the unit rather than after.
Possibly, but check before relying on it. The NSW Home Energy Saver program launched in June 2026 with zero-interest loans of up to $15,000 over ten years for households with combined taxable income up to $210,000, plus discounts of up to $4,000 for lower-income households expected later in 2026. The government announcement lists solar, batteries, insulation and air conditioning among eligible upgrades but does not specifically name hot water. Confirm eligibility on the official program page before counting on it.
Tell us what is happening and we will give you a fixed price before we start. Licensed, Kiama-based, 24/7 for emergencies.
Prices reviewed 23 August 2026. Where published sources disagree, we show the range that spans them rather than picking the number that suits us.