How much does a hot water heat pump cost in NZ?

Quick answer: EECA puts a new hot water heat pump at about $7,500 to buy and install, against about $3,000 for a standard electric cylinder. It then costs about $333 a year to run instead of $1,176, so for a typical four-person household the extra upfront cost comes back in a little over five years. Swapping one into an existing home often costs more: in EECA's own trial of 70 homes the average all-in price was about $10,400.

Why are people asking about hot water at all?

Because it is the biggest single job your power does. EECA says hot water accounts for about a third of the energy used in the average New Zealand home, and it runs every day of the year, not just in winter.

It is also what people are asking installers about right now. In October, 52% of the homes that asked for quotes through the Cogo platform included hot water, up from 42% over the past year.

What does a hot water heat pump cost to buy and install?

EECA's comparison for a four-person household with average hot water use:

• Hot water heat pump: about $7,500 to buy and install, and about $333 a year to run
• Standard electric cylinder: about $3,000 to buy and install, and about $1,176 a year to run
• Gas continuous flow: about $3,000 to buy and install, and about $1,071 (about $706 without the gas connection charge) a year to run

The $7,500 is a typical figure, not a quote. EECA notes the most efficient models and bigger systems cost more.

The more honest number for an existing house comes from EECA's 2024/25 pilot, which put hot water heat pumps into 70 homes of different sizes, climates and incomes around the country. The units alone ranged from $1,900 to $7,800 (about $5,800 on average). Installation ranged from $1,600 to $9,500 (about $4,600 on average). Add those together and the average job came to about $10,400.

Why does installation vary so much?

Because you are rarely just swapping one box for another. The things that push the price up:

• Where it goes. A hot water heat pump needs to sit outside, or have its outdoor unit outside, with room for air to move. If your old cylinder is in a hallway cupboard, the new one may need to move, and so does the plumbing.
• Which type. Some are one unit with the tank and heat pump together. Others split them, with the heat pump outside and the tank wherever suits. Split systems are more flexible and usually cost more.
• Taking the old one out. Removing a cylinder, and capping off gas if you are leaving it, is part of the job.
• Electrical work. A new circuit, a switchboard upgrade or a timer adds to the bill.

None of this is a reason to avoid one. It is a reason to get two or three quotes that spell out what is included, so you are comparing the same job.

How long does it take to pay back?

On EECA's figures a hot water heat pump costs about $843 a year less to run than an electric cylinder ($1,176 minus $333).

• Replacing an electric cylinder that has died anyway: you were going to spend about $3,000 regardless, so the real decision is the extra $4,500. At $843 a year that comes back in a little over five years.
• Replacing a cylinder that still works: you are paying the whole price, not the difference. On the pilot's $10,400 average that is closer to twelve years, which is why the best time to switch is usually when the old cylinder is near the end of its life.
• Coming off gas: against EECA's gas figure the saving is about $738 a year. If hot water is your last gas appliance, you also stop paying the daily connection charge, which is a big part of that gap.

These are averages. A bigger household uses more hot water and saves more. A couple in a small flat saves less.

Is there anything cheaper than a whole new system?

If your electric cylinder is still sound, yes, and it is worth doing first.

• Heat it at off-peak times. Most retailers now offer cheaper night rates. A timer or a smart thermostat moves your hot water onto them. EECA's trials priced smart thermostats at about $450 to $550 fitted.
• Fix the obvious losses. Lag the first metre or two of pipe from the cylinder and check the cylinder wrap on older tanks.

We have covered these in more detail in our guide to cutting your hot water bill.

What should I do now?

1. Find out how old your cylinder is. It is usually written on a label on the tank. If it is getting on for 15 years or more, start planning before it fails, not after.
2. Get two or three quotes for a hot water heat pump, each listing what is included: removal, any moving of plumbing, electrical work.
3. Compare them against what a like-for-like cylinder would cost you, because that is the true price of the upgrade.

Run your own numbers with Cogo to see what a hot water heat pump could save your household, alongside your other options, and get quotes from local installers.

FAQ

How much does a hot water heat pump cost in New Zealand?

About $7,500 bought and installed, on EECA's figures, compared with about $3,000 for a standard electric cylinder. In EECA's trial of 70 existing homes the average all-in cost was about $10,400.

How much does a hot water heat pump cost to run?

About $333 a year for a four-person household with average hot water use, against about $1,176 for a standard electric cylinder, according to EECA.

How long does a hot water heat pump take to pay for itself?

If you are replacing a cylinder that needs replacing anyway, a little over five years on EECA's figures. If you are replacing one that still works, it takes much longer, because you are paying the full price rather than the difference.

Is a hot water heat pump worth it if my cylinder still works?

Often not straight away. Moving your water heating to off-peak hours with a timer or smart thermostat is a cheaper first step, and the heat pump makes most sense when the cylinder is near the end of its life.

This article is general information only. It is not financial, energy or product advice. What you save depends on your home, your power plan and how you use energy, so get quotes from qualified installers or licensed dealers and seek independent advice for your own situation.