Government incentives and rebates
Your first step is to understand what systems are available. See Solar heater and heat pumps explained for an explanation of the different types. Then check out whether you qualify for Renewable Energy Certificates (RECs) - or the federal government solar rebate. The Office of the Renewable Energy Regulator provides a register of products that are eligible for RECs. This handy calculator will calculate for you how many RECs the product you're considering qualifies for.
Various state governments also offer rebates. Queensland, for example, offers rebates of up to $1000. New South Wales, Western Australia, Hobart, South Australia and Victoria all offer rebates, so make sure you check these websites for details if applicable.
Next, think about the installation. If you opt for solar panels, you’ll need a section of roof with good access to sunlight, preferably facing north for maximum exposure. There are considerations if you opt for a thermosiphon system; the roof must bear the load of the water tank, which can weigh several hundred kilograms and might require reinforcing the roof. And if the roof is difficult to access, the supplier might charge more for installation.
Check with your local council about building regulations. Councils are unlikely to object to you installing solar panels, but there may be restrictions. If you live in a strata building, there will almost certainly be limitations on what system you can install.
For most apartment buildings, it’s difficult to install solar panels for individual units, and most units won’t have suitable outdoor space for a heat pump. However, the owners’ corporation could consider a commercial installation for the entire building. Villas and townhouses have more options, but owner’s corporation approval may still be needed.
Getting a quote for solar hot water
CHOICE's 2008 shadow shop confirmed prices vary a lot between suppliers and models, so it’s worth getting a few quotes before deciding on a system. These two quotes from different retail suppliers for two models of heat pump show why.
- Dux Airoheat (250 L), total cost $3340. The base price, including installation, was $6160. The supplier offered a discount of $1020 for the RECs (30 RECs at $34 each) and said our home owner would also get the NSW rebate of $800. The final cost included the federal rebate of $1000, which only applies when you’re replacing an electric hot-water system.
- Siddons Solarstream (327 L), total cost $1875. The base price was $4125, less $1450 for RECs (29 RECs at $50 each). The supplier didn’t include the $1000 federal or $800 state rebate, or installation, but they could recommend suitable plumbers. Installation would probably cost about $1000, which would be offset by the federal rebate if you qualify, bringing the net cost to about $1875.
The second option might turn out cheaper, but you’d need to arrange the installation yourself. The first option includes installation, but note the lower price quoted for RECs ($34 vs $50). It’s worth comparing the value of RECs offered by different suppliers, as RECs discounts will be an approximation; the actual value will be based on the market rate when you buy the hot-water system.
Suppliers usually need about 30 minutes to assess your home. Retail suppliers are often connected with just one or two brands, but most brands have a wide range of products, so suppliers should be able to quote on a range of different types and models.
They should also be familiar with RECs and rebates and how they apply to you, but you need to read up on them too. Our Sydney shadow shopper has a gas hot-water system, which means he doesn’t qualify for the federal rebate (it only applies when you replace an electric system), but one supplier’s representative offered to sign a declaration that the old system was electric so he could get the rebate! We don’t recommend you try to get away with a trick like that.
Questions the supplier should ask you
- Your hot water needs — how many people live in the house? How much showering and hot clothes washing do you do each day, and what time of day do you do it? (Typically, one person uses about 50 L of hot water per day.)
- What sort of hot-water system do you currently have?
- Is gas connected to the property?
Questions you should ask the supplier
- Is installation included in the quote?
- How long will it take from placing an order to complete installation?
- Is RECs buyback included, and if so, at what price for the RECs?
- Will they help you apply for government rebates?
- Can you keep your existing hot-water heater as part of the new system? It might be possible to incorporate it as a booster for the solar hot-water system. However, you wouldn’t be eligible for RECs, because they only apply to completely new installations.