Hot Water Heat Pump vs Electric Element Calculator

Are hot water heat pumps worth it? A heat pump is a fancy and efficient way to heat water. It is basically bolting a reverse cycle air conditioner onto an old-school hot water tank. Why would you do this? Because it will use a quarter of the electricity compared to an old electric hot water tank.

However, heat pumps are more expensive upfront and generally less reliable. So are the savings worth it?

Recently I invited Karl Jenson from iStore to debate me on YouTube. I was in the camp that it is more affordable in the long term to install an old-school resistive element hot water tank and heat your hot water with excess solar power. I’ve listened to many old grumpy plumbers over many years complain about the reliability of heat pumps.

Karl works for iStore, so of course, he favours heat pumps.

“I wouldn’t put a heat pump on my mum’s place”

– Anonymous plumber

I figured the best way to settle this debate was to allow each to come to the table with their own biases, put the figures in a calculator, and work out how much each system would cost over ten years. Below is the calculator I made for the debate. If you are unsure, an explanation for each field is below the calculator.

The Calculator below is designed for customers considering switching from an old electric tank to a heat pump. Muck around with it. Assume minimum hot water usage. Assume you have no solar. Assume old-school tanks last longer than heat pumps. Assume you get a cheap “hot water diverter”,… and an explanation for each field is in the footnotes below the calculator.




(1) How much hot water do you use on a resistive electric element? You’ll have to guess if you don’t have electric element hot water. Or if you currently have a heat pump, multiply the usage of your heat pump by four.

In Brisbane, with a family of four, I average 7kWh of hot water a day. Southern states use significantly more hot water than Queensland because the inlet water temperature is significantly cooler – and Southerners are soft.

(2) What will the average power price be over the next ten years? Will it increase compared to wage growth? Your guess is as good as mine. I’m keeping it conservative and adding the price we are paying for power today in Brisbane.

(3) I’ve added the Solar Feed-in-Tariff because, hopefully, most people will heat their hot water from excess solar power during the day. Excess solar is NOT free power. It’s an “opportunity cost”. You would have been paid 8 cents a kWh if you didn’t use it to heat your hot water.

If you don’t have solar, then type ‘0’ cents and 0% for the Solar Feed-in-Tariff price and percentage, and move on to the Electric Element section.


(4) I entered the prices for what I was told was a simple supply and installation (swap out) in Brisbane. You can either use my figures or go and get a quote.

(5) The $800 hot water diverter, or Catch Relay, is necessary for our calculations when using an old-school electric element tank. It will allow you to heat more of your water with surplus solar. I recommend Catch Power as a simple and affordable solution. If you get this installed as part of your solar installation, it will only cost a few hundred dollars more than a Fronius smart meter.


(6) How much of your hot water will be supplied by solar? Well, again, this depends. Do you usually have 3.6kW element and 3.6kW of surplus solar for 2 or 3 hours a day? Or do you send very little solar power back to the grid? I think 80 per cent is generous if you have a large solar system. Remember, there will always be rainy days.

(7) How long will your resistive hot water tank last? Ask some plumbers, and they will tell you 20 + years. But I tend to think newer tanks were not made the same way as they used to be. I default on 15 years. The calculator will account for a percentage of the cost of the hot water system. For example, if you say the hot water system will last 20 years, then the calculator will only add half of the upfront price.


Heat pumps consume a quarter of the energy of an electric element tank, so we have calculated this from your bill data.

(8) This price was just an over-the-phone estimate I was given for replacing an electric element with an iStore Heat Pump.

(9) Because a heat pump only draws about 1kW (compared to 2.4kW of 3.6kW electric element), it is much more likely that more of that will be supplied with surplus solar.

The iStore Heat pump does not need a Catch Relay or diverter. The iStore has a built-in timer. It can’t be switched on and off as often as a simple element, but because it only draws about 1000 watts, it will likely sit under your excess solar curve most of the time.

(10) While iStore has a 5-year warranty, from the conversations that I have had with experienced installers, it is fair to expect it to last at least ten years. Karl Jenson claims it will last 15,000 run hours, but that’s not backed up in any iStore document. As with the electric element calculations, if you estimate a heat pump will last ten years, the calculations will account for 100 per cent of the cost of the hot water system. Assuming the system will last 15 years, the calculations will allow for 66% of the cost.


There are so many variables to consider if you want to know if a heat pump is better for you than an old-school electric element tank.

  • If you are now paying 30+ cents rather than 20 + cents for electricity
  • If you use a moderate amount of hot water.
  • If an electric element tank no longer lasts 20 + years, as I claimed.
  • If heat pumps are close to the price of an old-school tank and a Catch Relay
  • If a heat pump will last 10+ years as Karl claims

Then I was wrong. Heat pumps are the more economical solution.

Mark Cavanagh

Mark is the Owner and Manager of MC Solar & Electrical. He’s an Electrician, accredited solar installer/designer and an electrical contractor.

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