A guide to heat pumps: what are they and are they more efficient?

The technology isn’t new, yet few realise the power and efficiency of the humble heat pump.

Your Home
8 min read
Over half of Australians* still rely on gas as a source of energy, but few realise that there’s a more cost-effective, energy-efficient option – heat pumps.

A common – but perhaps less-known – use of heat pump technology is the reverse-cycle air conditioner. While you might be used to cranking the air-con in summer to keep you cool, studies show that using it to heat your house in winter can save you hundreds of dollars.

What is a heat pump and how does it work?

For heating your home, heat pump technology gathers heat from outside and warms it to a higher temperature, then moves it from one place to another.

It uses a compressor and liquid or gas refrigerant (the stuff that’s in your fridge) – a substance that absorbs heat from the environment – to concentrate heat and move it around to warm your house.

It can also be reversed to extract heat from inside your house and cool it in the process. That’s how your reverse cycle air conditioner keeps you cool in summer.

How does a heat pump work in winter?

It can be difficult to fathom how heat pumps can extract heat from the air during colder months – and it can’t be explained without a little help from science.

Air contains a high level of energy, dropping to its minimum only at Absolute Zero temperature (or minus 273 degrees Celsius). As temperatures rarely drop below zero degrees Celsius in Australia, the air still contains a lot of energy in the cooler months – in fact, almost as much as in summer.

Heat pumps harness this energy to heat the air and push it into your home.

Types of heat pumps

There are several types of heat pump technologies available.

Geothermal or ground source heat pumps: Because soil absorbs energy from the sun, the temperature underground stays consistent throughout the year. Geothermal heat pumps use the heat from under the soil to warm up your home, often by hydronic heating systems.

Air source heat pumps: These pumps take heat from the outside air to create warmth in your house in winter, and reverse the process in summer to keep your house cool. This is typically how reverse-cycle air conditioning works.

family in bathroom during bathtime

Costs to install

Heat pump hot water systems are highly efficient and will save you money in the long run. However, they are a significant investment, costing between $2,500 and $4,000. Installation costs can vary, depending on the complexity (whether you’re replacing an existing system with an upgrade or changing energy type and location of the system).

Split-system, reverse-cycle air conditioners range from $600 up to $5,500, while ducted systems start at $5,000 but can easily cost over $10,000 with installation.

When it comes to picking your home heating and cooling, choose wisely. Often, lesser upfront costs may mean higher running costs – the more energy stars, the lower the running costs.

Why heat pumps are better than their gas counterparts

More efficient
Because they use electricity to move hot or cold air from one place to another, rather than to generate it, heat pumps can deliver up to 10-15 times as much energy as they use. In fact, premium heat pumps can heat up a room at 600% efficiency, while gas heaters are around the 50% to 95% mark.

Cost less to run
Because they use less energy to run, they’re also better for your wallet. Although they may be more expensive to install, they can provide significant savings in the long run.

According to a 2015 Melbourne Energy Institute report, households in Canberra could save $1,733 per year and those in Melbourne $658 per year in heating costs just by switching off their gas and using reverse-cycle air conditioners.

Switching from gas to heat pumps to heat water can also lead to significant savings, not only because they’re more efficient. Heat-pump water heaters act as batteries, so you access electricity when it’s cheaper, and store it for later.

Safer than gas
With heat pumps, you don’t need to worry about house fires or filling your home with dangerous fumes, unlike some gas heaters.

Two for one
Heat pumps not only provide warmth in winter, but they can also keep your home cool in summer, so you get two functions in one system.

It’s worth exploring all your options to create a more energy-efficient home. When you take control of your energy usage, you can save money and reduce your impact on the environment. And, it can even increase the value of your property.

Where is your electricity is going?

AGL Energy Insights helps you to take control of your electricity costs and find out where you could start making savings.

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*Sources of energy used by Australia households (Australian Bureau of Statistics)