About the Hot water upgrade incentive
Under the Energy Savings Scheme, installers can take a discount off the price of a new heat pump or solar hot water system. The NSW Government gives indicative amounts of up to $640 when replacing an electric water heater and up to $330 when replacing a gas one.
The bigger discount for replacing electric systems reflects the bigger saving: an old electric storage heater uses far more power than a heat pump to heat the same water.
Discounts vary between installers, so get more than one quote. A heat pump can also be timed to run in the middle of the day on solar or a cheap time-of-use rate.
Who can get it
- All NSW households and small businesses may be eligible.
- You are replacing an existing water heater with an efficient heat pump or solar hot water system.
- You may not qualify if your current system is already efficient.
How to apply
- Find installers offering the Energy Savings Scheme discount for hot water.
- Get several quotes showing the discount applied.
- Pay the remaining amount, including the required minimum payment.
How it is paid: As an upfront discount on your installer's quote.
Contact: NSW Climate and Energy Action, hot water upgrade. Official information.
Moving or switching retailer?
Concessions applied by your retailer do not always move with you. When you move house or switch, give your card details to the new retailer and check the next bill. See how to claim a concession.
Other energy help in New South Wales
- Low Income Household Rebate: Up to $285 a year ($313.50 in embedded networks).
- Family Energy Rebate: Up to $180 a year ($198 in embedded networks).
- Seniors Energy Rebate: $200 a year.
- Medical Energy Rebate: Up to $285 a year ($313.50 in embedded networks).
- Life Support Rebate: Depends on equipment, up to $1,343.20 a year.
- Energy Accounts Payment Assistance (EAPA): $50 vouchers towards an unpaid bill.
- NSW Gas Rebate: Up to $110 a year ($121 in embedded networks).
- Home Energy Saver: Discount up to $4,000 or zero-interest loan up to $15,000.
- Air conditioner upgrade incentive: Up to about $550 to $560 off a 6 kW system.
See every program on our New South Wales rebates page.
Common questions
Up to about $640 when replacing an electric water heater and up to about $330 when replacing a gas water heater, according to the NSW Government. These amounts are indicative.
The discount applies to the installation, so a renter would need the landlord's agreement to replace the water heater.
No. All NSW households and small businesses may be eligible, depending on the savings from the upgrade.
Sources
Every rate on this page comes from the regulator or the regulated retailer. Last checked October 2026. Prices include GST unless we say otherwise.