Heat Pump Hot Water vs. Solar Hot Water Systems – A Comparison for Melbourne Residents

Experiencing cold showers or waiting for hot water can be a major inconvenience, especially in winter. What’s worse is receiving a high energy bill at the end of the month.
Fortunately, the increasing popularity of renewable energy solutions like heat pumps and solar hot water offers potential relief.

But how do you decide?

This blog compares heat pump hot water systems and solar hot water systems- how they work, their effectiveness, cost and suitability for Melbourne.

Heat Pump Hot Water and Solar Hot Water- Understanding the Systems

Heat Pump Hot Water Systems

Heat pumps work by extracting heat from the ambient air and using it to heat water. This process involves a heat exchanger, a refrigerant cycle, and a storage tank. They are versatile and efficient across various climates. Heat pumps can use 60 to 75% less electricity compared to traditional electric hot water systems.

Solar Hot Water Systems

Solar hot water systems use solar collectors to absorb sunlight, which heats the water stored in an insulated tank. There are two main types of solar collectors: flat plate and evacuated tube. 

While highly efficient in sunny conditions, these systems may require electric boosters during cloudy or rainy periods. Solar hot water systems are best suited for regions with consistent sunlight.

Cost Comparison

Upfront Costs 

Heat pump systems generally have a higher initial installation cost compared to solar hot water systems. However, both systems are eligible for government rebates and incentives under programs like the Victorian Energy Upgrades (VEU) program, which helps offset these costs.

Operational Costs 

Heat pump systems tend to have lower monthly energy bills due to their efficient use of ambient air. In contrast, solar hot water systems can benefit from free solar energy but may incur additional costs if electric boosters are frequently needed. 

The payback period for solar systems is typically shorter (3-5 years) compared to heat pumps (7-10 years).

Energy Efficiency and Environmental Impact

Efficiency of Heat Pumps 

Heat pumps offer consistent efficiency regardless of weather conditions, making them reliable year-round. They are particularly effective in Melbourne’s moderate climate, where sunlight is not always guaranteed. Heat pumps can provide significant energy savings, reducing greenhouse gas emissions substantially.

Efficiency of Solar Systems 

Solar hot water systems are highly efficient in optimal conditions with abundant sunlight. However, their efficiency can drop during periods of low sunlight, necessitating the use of electric boosters. This variability can impact overall energy savings and environmental benefits.

Maintenance and Lifespan

Maintenance Requirements 

Heat pumps require regular maintenance due to their mechanical components, which can include servicing every 3-5 years. Solar systems, with fewer moving parts, typically have lower maintenance needs, though newer technologies might present unique challenges.


Heat pumps generally have a lifespan of 10-15 years, while solar hot water systems can last up to 20 years. However, the longevity of solar systems is primarily due to the durability of the solar collectors rather than the entire system.

Climate Suitability- Heat pumps vs Solar for Melbourne

Heat Pumps in Melbourne 

Melbourne’s climate, characterised by cooler winters and variable sunlight, makes heat pumps an ideal choice. These systems do not rely on solar energy, ensuring a consistent hot water supply throughout the year. Heat pumps are efficient and reliable in less sunny climates like Melbourne.

Solar Systems in Melbourne 

Solar hot water systems face challenges in Melbourne due to inconsistent sunlight. Electric boosters may be needed more frequently, which can affect efficiency and cost savings. Despite this, solar systems can still be a viable option with proper planning and installation.

Practical Considerations for Melbourne Residents

Comparison Chart: Heat Pump Hot Water vs. Solar Hot Water Systems


Heat Pump Hot Water Systems

Solar Hot Water Systems

Energy Source

Ambient air


Climate Suitability

Suitable for varied climates, including less sunny areas

Best for sunny regions with consistent sunlight

Upfront Cost

Higher initial cost

Lower initial cost

Operational Cost

Lower monthly energy bills

Free energy from the sun but may need boosters


Consistent efficiency

High efficiency in optimal conditions


Requires regular maintenance

Low maintenance due to fewer mechanical parts


10-15 years

Up to 20 years

Installation Complexity

Moderate, easier to position

Higher, optimal placement of collectors needed

Space Requirements

Compact, can be installed in various locations

Requires roof space for collectors

Environmental Impact

Low carbon emissions, uses renewable energy

Zero emissions, highly sustainable

Government Rebates

Eligible in some states

Eligible in some states

Payback Period

7-10 years

3-5 years

Other considerations

Space and Installation 

Heat pumps require less space and are easier to install in various locations compared to solar systems, which need roof space for solar collectors. This makes heat pumps more adaptable to different household settings.

Energy Source Versatility 

Heat pumps can be powered by solar PV panels for additional savings, providing a hybrid solution that combines the benefits of both technologies. Solar systems, on the other hand, rely solely on sunlight, which can be a limiting factor in less sunny climates.


While both heat pump and solar hot water systems offer significant benefits over traditional systems, heat pump hot water systems are particularly advantageous for Melbourne residents. 

Their consistent efficiency, lower maintenance needs, and adaptability to Melbourne’s climate make them a superior choice. 

For more information, explore Gas Chill’s heat pump hot water installation options and ensure you have hot water all year round.