Hot water is typically the largest gas load in a Perth home — and for households looking to ditch gas, reduce bills, or make the most of a solar system, replacing it is one of the most impactful decisions you can make. Two technologies dominate the conversation: solar hot water and heat pump hot water.
Before comparing them, it is worth clearing up a common source of confusion. Solar hot water — also called solar thermal — is a completely different technology from the solar panels on your roof. If you have solar PV panels, you do not already have a solar hot water system. They are separate products, separate systems, and separate decisions.
Once that distinction is clear, the comparison between the two becomes much more straightforward — especially for Perth households who have solar panels or are planning to install them.
What Is Solar Hot Water?
Solar hot water — properly called a solar thermal system — uses collectors mounted on your roof to absorb heat directly from sunlight. A fluid circulates through those collectors, picks up heat, and transfers it to a storage tank, usually located either on the roof alongside the collectors or on the ground nearby.
This is fundamentally different from solar PV panels. Solar PV panels generate electricity from sunlight. Solar thermal collectors generate heat directly from sunlight. The two systems do not interact — a solar thermal hot water system does not connect to your solar panels, your inverter, or your battery.
Solar thermal systems perform well in Perth’s climate. The city’s high solar irradiance means collectors can meet 80 to 90 percent of a household’s hot water demand on good days. But performance is dependent on direct sunlight. On overcast winter days — and Perth does have cloudy periods, particularly in June and July — output drops, and an electric or gas booster element kicks in to make up the difference.
- How it works: Roof-mounted thermal collectors heat a fluid that transfers energy to a storage tank.
- Roof space required: Yes — dedicated collector panels separate from any solar PV panels.
- Connection to solar PV: None. Solar thermal and solar PV are independent systems.
- Performance in cloudy weather: Reduced — a booster element handles shortfalls.
- Maintenance: Collectors, fluid circuit, and storage tank all require periodic attention.
What Is a Heat Pump Hot Water System?
A heat pump hot water system works on the same principle as a reverse-cycle air conditioner — it extracts heat from the surrounding air and uses it to heat water stored in a tank. It does not generate heat directly. Instead it moves heat from the air into the water, which is why it uses two to three times less electricity than a conventional electric resistance element.
The heat pump unit and storage tank are typically integrated as a single outdoor unit — there are no roof-mounted components and no fluid circuits running through the roof space. It runs on electricity, which means it can be powered by your solar PV system during the day.
Because it draws heat from air rather than relying on direct sunlight, it operates effectively regardless of cloud cover, at night, and throughout winter. Perth’s mild climate — with warm to hot air temperatures for most of the year — makes it an excellent environment for heat pump operation.
- How it works: Extracts heat from ambient air and transfers it to a water storage tank — like a reverse-cycle air conditioner for water.
- Roof space required: No. The unit sits at ground level or on a wall bracket.
- Connection to solar PV: Yes — runs on electricity, which can come directly from your solar generation.
- Performance in cloudy weather: Unaffected — draws heat from air, not sunlight.
- Maintenance: Minimal. Single integrated unit with no roof components or fluid circuits.
How They Compare: The Key Differences
Upfront Cost
Solar thermal systems typically cost between $3,000 and $7,000 installed, depending on system size and whether the tank is roof-mounted or ground-mounted. Heat pump hot water systems sit in a similar range — $3,500 to $7,500 installed — before any rebates. After the federal STC rebate (which applies to heat pumps as well as solar panels), the net cost of a quality heat pump installation is often comparable to or less than a solar thermal system.
Running Cost
On a standalone basis — drawing entirely from the grid — a heat pump costs approximately $300 to $400 per year to run, depending on household size and usage patterns. A solar thermal system running well in Perth’s climate can cost $50 to $200 per year with a booster element making up shortfalls.
However, the picture changes significantly when a heat pump is paired with solar PV. Schedule the heat pump to run during your peak solar generation window — typically 10am to 2pm — and it runs almost entirely on energy your panels are producing that would otherwise be exported to the grid at the low DEBS off-peak rate. In this scenario, heat pump running costs drop to $50 to $100 per year, comparable to or better than a solar thermal system.
Solar PV Integration
This is the decisive factor for most Perth households.
A heat pump runs on electricity. If you have solar panels, that electricity can come from your own generation rather than the grid. Set a timer or smart schedule to run the heat pump during peak solar hours and you are using power your system is producing at that moment — power that would otherwise be exported for a low return.
A solar thermal system has no connection to your solar PV setup whatsoever. It is a separate energy system that operates independently. Having solar panels does not reduce the running cost of a solar thermal system by a single cent.
Roof Space
Solar thermal collectors require dedicated roof space — separate from and in addition to any solar PV panels. For households with limited roof area, or those who want to maximise the number of solar PV panels, adding a solar thermal system competes directly for the same resource. A heat pump requires no roof space at all.
Reliability Across Seasons
Solar thermal performance drops on cloudy days and in winter when direct solar irradiance is lower. The booster element compensates, but at the cost of additional grid electricity consumption. Heat pump performance is effectively independent of sunlight — it extracts heat from air, and Perth’s ambient air temperatures remain warm enough year-round for efficient operation.
Installation Complexity
Solar thermal installations involve roof-mounted collectors, pipework running into the roof space or along the exterior, and either a roof-mounted or ground-mounted tank. Heat pump systems are simpler — a single unit installed outdoors, connected to water supply and electrical supply. For most Perth homes, a heat pump installation is faster and involves less structural work.
The Solar PV Factor: Why It Changes the Calculation
For Perth households that already have solar panels — or are planning to install them — the heat pump is the clear choice. The reasoning is straightforward.
Hot water accounts for a large share of most households’ energy costs. If you can cover that load with energy your solar system is already producing, you eliminate most of that cost. A heat pump scheduled to run during peak solar generation does exactly that — it consumes electricity your panels are generating at that moment, at an effective cost near zero, rather than exporting it to the grid at 2 cents per kilowatt-hour.
A solar thermal system cannot do this. It generates heat from sunlight through its own separate collectors. It does not benefit from your solar PV investment in any way. The two systems exist in parallel, each doing their own thing, with no integration between them.
For a household that has solar and is replacing gas hot water, the choice is not really solar thermal versus heat pump — it is heat pump versus continuing to pay for grid electricity for hot water. And that calculation favours the heat pump substantially.
Why Most Perth Households Are Choosing Heat Pump
The shift toward heat pumps in Perth has been clear over recent years, and the reasons are practical rather than trend-driven.
- Pairs with solar PV for near-zero running costs when scheduled during peak generation.
- No dedicated roof space required — preserves roof area for additional solar PV panels.
- Consistent year-round performance regardless of cloud cover or season.
- Simpler installation with less structural involvement.
- Single integrated unit with minimal maintenance requirements.
- Federal STC rebate reduces upfront cost at point of sale.
- Smart scheduling and WiFi control allow precise integration with solar generation windows.
For households already on solar and battery, the heat pump rounds out an energy setup where hot water, household loads, and EV charging can all be covered by self-generated solar power. That is the goal of going all-electric — and the heat pump is a central part of it.
iStore: The Heat Pump Positive Energy Solutions Installs
Positive Energy Solutions supplies and installs the iStore heat pump hot water system. iStore is Australian-designed and has a strong track record across Perth and WA — well-suited to the local climate and widely supported by local service networks.
iStore 270L
The 270L model is suited to households of around three to six or more people, depending on usage patterns. It is the most popular choice for Perth family homes.
- Tank capacity: 270 litres.
- Refrigerant: R290 — a natural refrigerant with very low environmental impact.
- Coefficient of Performance (COP): Approximately 4.82 under standard test conditions — meaning for every 1kWh of electricity consumed, around 4.82kWh of heat energy is delivered to the water.
- Energy saving: Up to 74% less energy than a conventional electric resistance element.
- Controls: Built-in timer, WiFi-ready for app-based scheduling and monitoring, smart solar boost mode.
- Warranty: 5 years parts and labour.
iStore 180L
The 180L model suits smaller households — typically one to three people. It carries the same core technology as the 270L, including R290 refrigerant, WiFi-ready controls, and smart scheduling capability.
Your Positive Energy Solutions energy consultant will recommend the right model for your household size and hot water demand.
Rebates and Incentives for Heat Pump Hot Water in Perth
Heat pump hot water systems attract federal government support through the Small-scale Technology Certificates (STC) scheme — the same mechanism that reduces the upfront cost of solar PV panels. When you install an eligible heat pump, a set number of certificates are generated based on the system’s efficiency, capacity, and your location. The value of those certificates is passed back to you as an upfront discount at the point of sale.
For a 270L heat pump installation in Perth’s climate zone, the STC rebate is typically worth approximately $1,500 to $1,800, applied automatically to your purchase price. No separate claim or paperwork is required — your installer handles it as part of the installation.
There is currently no WA state-level heat pump rebate — a previous state scheme has closed. The federal STC discount is the primary government incentive available to Perth households for heat pump hot water. Positive Energy Solutions manages the STC application as part of every installation.
Note: Where a heat pump is installed as part of a broader solar and battery bundle, the Plenti no-interest loan may be available to assist with the full project cost. Speak to your energy consultant about bundling options.
Part of the Bigger Picture: Going All-Electric
For most Perth households, a heat pump hot water system is not a standalone purchase — it is one part of a wider transition away from gas and toward a home powered by self-generated solar energy.
Positive Energy Solutions can coordinate the full electrification bundle: solar and battery, heat pump hot water, and EV charger as a single project. Doing it this way is more cost-effective than coming back for each separately — one switchboard assessment, one installation mobilisation, one project managed from start to finish.
When the heat pump is sized and scheduled as part of a system designed for your complete energy picture — including solar generation, battery storage, and EV charging loads — the result is a home where gas is eliminated and most energy needs are covered by what your panels produce.
See our full guide: Going All-Electric in Perth 2026.
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- Fronius GEN24 Plus Inverter Perth 2026: Full Review for WA Homeowners
Frequently Asked Questions
Does a heat pump work in winter in Perth?
Yes. Heat pumps extract heat from ambient air — they do not rely on sunlight. Even on a cold, overcast Perth winter day, the ambient air temperature is warm enough for efficient operation. Perth’s mild winters make it a particularly good climate for heat pumps year-round.
Can I run my heat pump on solar power?
Yes — this is one of the key advantages of a heat pump over solar thermal. Set your heat pump timer to run during your peak solar generation window (typically 10am to 2pm) and it draws directly from your panels rather than the grid. This reduces the effective running cost to near zero, since you are using electricity your system is already generating that would otherwise be exported at the low DEBS off-peak rate.
Does a heat pump make noise?
iStore heat pumps produce sound during operation — similar in level to a quiet air conditioning unit. For most installations the noise level is low enough to cause no issue. For bedrooms or particularly noise-sensitive locations, placement and orientation can be managed during the installation design. Your energy consultant will discuss siting options during the assessment.
What size iStore do I need?
The 270L model suits most Perth family homes with three or more people. The 180L is appropriate for smaller households. Your Positive Energy Solutions energy consultant will recommend the right size based on your household size, typical hot water usage, and how the system will be scheduled around your solar generation.
Can a heat pump replace my gas hot water system?
Yes — a heat pump is a direct replacement for a gas continuous flow or gas storage hot water system. The installation involves removing the existing gas system, installing the heat pump unit and tank, connecting to water supply and electrical supply, and setting up your scheduling. Once the heat pump is running, you can arrange to have your gas hot water disconnected — and depending on your other gas loads, potentially have the gas connection removed from the property entirely.
Is there a WA state rebate for heat pump hot water?
There is currently no WA state-level rebate for heat pump hot water systems — a previous state scheme has closed. The federal STC rebate applies and is typically worth approximately $1,500 to $1,800 for a 270L installation in Perth’s climate zone, applied automatically at point of sale. Where a heat pump is part of a broader solar and battery project, the Plenti no-interest loan may be available to assist with the full project cost.
I already have solar thermal — should I switch to a heat pump?
If your solar thermal system is in good condition and performing well, there is no urgent reason to replace it. If it is ageing, requiring maintenance, or you are adding solar PV panels and want to maximise roof space and solar integration, a heat pump is worth considering as a replacement. The ability to schedule the heat pump during peak solar generation means it works with your solar PV system in a way that solar thermal simply cannot.
Ready to Replace Your Hot Water System?
Positive Energy Solutions supplies and installs iStore heat pump hot water systems across Perth. Whether you are replacing gas, upgrading an ageing electric system, or bundling a heat pump with a new solar and battery installation, we can design and manage the full project.
About the Author
Jason Wiktorowicz
Sales Manager, Positive Energy Solutions | Perth, WA
Jason has been at the centre of Western Australia’s energy transition for over a decade. As Orchestration Lead on Project Symphony — WA’s largest virtual power plant pilot — and Stream Lead on Project Encore, he worked directly with AEMO, Western Power and Energy Policy WA to shape how distributed energy resources connect and operate on the SWIS. That work included developing and rolling out CSIP-AUS, now mandatory for all new WA grid connections. He also led Emergency Solar Management (ESM), the first program of its kind in WA, VPP for Schools (VPP4S), which provided direct market benefits through Supplementary Reserve Capacity, and REBAR, the WA Residential Battery Rebate scheme.
His earlier career spanned Synergy, Infinite Energy and Curtin University’s Sustainability Policy Institute, where he co-authored peer-reviewed research on net-zero urban precincts, solar integration and peer-to-peer energy trading, published in the journal Urban Planning in 2018.
At Positive Energy Solutions, Jason leads sales with a focus on system design accuracy and long-term performance. Positive Energy Solutions installs solar and battery systems, EV chargers and heat pumps, and holds partner accreditations with Fronius, SigEnergy, iStore and SunPower. Connect with him on LinkedIn.
