How Energy Efficient Are Hot Water Heat Pumps vs Gas and Electric?

New Zealand households can save around $284 a year by switching from a standard electric hot water cylinder to a hot water heat pump (according to EECA), and even more if you’re on a higher power plan or already have solar.

We break down where those savings come from, how a hot water heat pump stacks up against gas and electric, and what a renewable heating system could mean for your power bill in New Zealand.

How Much Less Electricity Does a Hot Water Heat Pump Use?

A hot water heat pump uses around 60-75% less electricity than traditional electric hot water systems, and roughly a third of the energy needed by gas water heating.

This efficiency comes down to something called the Coefficient of Performance, or COP. It’s a simple ratio where a COP of 4 means the heat pump delivers four units of hot water heating for every one unit of electricity it draws from the grid.

Most hot water heat pumps sold in New Zealand run at a COP between 2 and 4, depending on the model and where you live. Units in warmer regions like Auckland typically achieve a higher COP than the same model would in Christchurch, according to EECA’s own testing.

Is Gas Hot Water Cheaper Than Electric in NZ?

No, not once you look at the full running cost rather than the sticker price. EECA’s modelling for a typical 4-person household over a 10-year period puts a hot water heat pump at around $333 a year in electricity, against roughly $1,071 a year for a gas continuous flow system, before the ongoing daily gas connection fee is added.

After weighing up the upfront and running costs over a 10-year period, a hot water heat pump comes out around 21% cheaper than gas overall, and around 27% cheaper than sticking with a standard electric cylinder.

How Hot Water Heat Pumps Transfer Heat (and Why It’s So Efficient)

A hot water heat pump doesn’t generate heat the way an electric element does. Instead, it uses a refrigerant-based heat transfer system to draw warmth from the outside air, and a compressor concentrates that heat before transferring it to your hot water cylinder.

Because it’s moving existing heat rather than manufacturing it from scratch, this kind of heat transfer system uses far less electricity to do the same job as a conventional element. For water heating specifically, it’s what makes a hot water heat pump one of the best heat transfer systems available in NZ for cutting both running costs and emissions.

Are Hot Water Heat Pumps a Renewable Heating System?

Yes. A hot water heat pump is classed as a renewable heating system because most of the energy it uses to heat your water comes from the surrounding air, not from burning fuel. Add in the fact that New Zealand’s electricity grid typically runs at 80-90% renewable generation year-round (mostly hydro, geothermal, and wind), hitting a record 96.4% renewable in the final quarter of 2025, according to MBIE, and running a hot water heat pump is about as close to fully renewable hot water as most homes can get without solar.

Hot water pump heaters also save around 7,000kg of emissions over a 15-year period compared with gas or LPG water heater systems, because they emit very little carbon dioxide when powered by New Zealand’s renewable electricity grid. In comparison, a standard electric cylinder emits around 3.5 times more CO₂ than a hot water heat pump over its lifetime, and a gas system emits around 6.5 times more.

The Real Cost Savings: What This Means for Your Power Bill

So, is gas hot water cheaper than electric? Not once you add up the full picture. If we consider the purchase, installation, and ongoing energy costs, New Zealand homeowners can save around $284 each year by switching to a hot water heat pump from a standard electric hot water cylinder.

That’s because you’re drawing less electricity from the grid, and you’re not spending on gas connection fees or gas cylinders that are also prone to leaking! If you live in an area with higher electricity costs, or your house has solar panels installed, your savings will be even greater – a testament to the great energy efficiency of a hot water pump heater.

Consumer NZ backs this up in practice: one reviewer’s household saw their daily hot water cost drop from $19.25 to $16.21 in the first winter after switching, and expects the heat pump to pay for itself in running-cost savings within 10 years.

Make the Switch and Save Today!

Want a hot water heat pump that’s genuinely built around energy efficiency, not just marketed that way?

For a premium hot water pump heater that uses as little electricity as possible to meet your home’s hot water needs, contact A2W Plumbing and Hot Water. We provide outstanding hot water pump heaters, along with precise installation, to greatly enhance your home’s energy efficiency.