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Understanding Electric Hot Water System Replacement Regulations

Electric Hot Water Systems and Heat Pump Regulations

Looking for a brand new hot water system isn’t like shopping for a brand new pair of shoes. You can’t just go to the local shopping centre and try on pair after pair. There are government regulations and guidelines which outline specific requirements for replacing electric water heaters.

And although you may not be able to go for a like-for-like replacement, that could actually be a good thing! To help better understand the rules, we’ve collated what you need to know about Australian regulations. After this, you’ll know exactly what to expect if you’re searching for a replacement electric hot water system.

The Importance of Energy Conscious Hot Water

With a heavy focus on reducing greenhouse gas emissions and improving environmental efficiency, the Building Code of Australia implemented a phase-out of electric hot water systems from 2010. Initially, new build homes could not be constructed with an electric storage tank system. Gas, solar and electric heat pumps remain the only viable options. 

Regulations soon extended to the replacement and installation of water heaters on existing, or established, homes. Therefore, an existing storage tank water heater needs to be replaced by a high-efficiency unit. Renewable energy sources are in, and the standard electric tank is out.

As roughly one-quarter of the average household’s energy usage goes into heating water, it makes sense. Not only do the national regulations reduce carbon emission production, but there are clear savings on energy bills.

How Water System Regulations and Requirements

Despite the introduction of new building code regulations over a decade ago, they’re not really mainstream knowledge. And in reality, the average Aussie isn’t scouring the internet on a casual basis for hot water facts.

Preparation is a handy thing, though. Each state may have its own specific requirements, so it’s always good to check local government websites first. Still, for the likes of South Australia, Victoria and Queensland, hot water replacement building codes are pretty similar.

For example, when replacing a water heater in an established home, guidelines indicate that a new unit must be:

  • a low emission water heater
  • gas instantaneous, continuous flow or storage with a minimum 5 star energy rating
  • solar storage tank, including gas or electric boosted 
  • electric heat pump

Additionally, certain regulations also go into specifics surrounding greenhouse gas and carbon emission output. Victorian regulations on Class 1 buildings state that a replacement water heater can not exceed 100g CO2-e/MJ of thermal energy load. There are also STCs.

What is a Small-Scale Technology Certificate?

Occasionally, you’ll find a mention of small-scale technology certificates or STCs. Although they’re not a daily talking point, when you take a dive into electric hot water systems and water heater replacement, STCs are going to pop up. 

To understand what STCs are, we’ll take one quick step back. They’re a part of the Small-scale Renewable Energy Scheme, which as the Australian Government states, “creates a financial incentive for individuals and small businesses to install eligible small-scale renewable energy systems.” 

Small-scale technology certificates were created as a part of the scheme. The STCs balance out carbon emissions produced by non-renewable energy sources. Certificates can be purchased by organisations and entities, which surrender them to the Clean Energy Regulator.

In terms of the everyday Aussie, STCs are applicable to solar hot water systems and heat pump hot water systems. One certificate equates one megawatt hour of renewable energy that is either generated or displaced, by the water heater. 

As an individual, you may be able to sell small-scale technology certificates and recoup some of the upfront expenses. For a rough estimate, a new solar or heat pump unit should have 17 STCs if it is 220 litres or smaller, or 38 STCs for a larger system. The Clean Energy Regulator website will have further information on how you can make the most of STCs.

Understanding Electric Hot Water System Replacement Regulations

Can I Still Purchase an Electric Hot Water System?

You probably have one big question left: can I still purchase and install an electric hot water system? The answer is yes, albeit with some considerations.

Like-for-like replacements can be installed when a unit is still under warranty. It’s best to contact the manufacturer in that case. Meanwhile, there are exceptions to regulations for apartments and multi-storey buildings. There also is not a lot of enforcement of the regulations outside of new builds.

However, sticking to the Building Code of Australia regulations, you’re looking at gas, solar or heat pumps. Not everyone has access to natural gas, though, while solar can be more expensive upfront. Therefore, heat pump hot water systems are your best choice.

Heat Pump Hot Water Systems: Yes, They Are Worth It

If you’re unfamiliar with heat pump water heaters, they absorb warmth from the air. Heat energy is transferred via a refrigerant, heating the water stored in a tank. 

Also referred to as air-source heat pumps, electricity is used, but the overall system is three times more efficient than a standard electric storage tank. Lower running costs and fewer carbon emissions equate to plenty of positives.

According to Sustainability Victoria, for a 4 person household using 150 litres of water per day, an electric storage tank costs $1115 per year at peak tariff rates. It also produces roughly 4110kg of greenhouse gas emissions. In comparison, a standard heat pump running at peak tariff rates costs just $460 to run annually, producing 1695kg of emissions.

The output is no different to an electric water heater as the water is still hot, and the pressure is still good. However, there is a minor dependence on ambient temperature, and cooler climates will impact the efficiency of heat transference. Still, that’s where a backup electric element will kick in to ensure complete performance and reliability in all conditions.

There’s also some increased noise production while the heat pump is in use. That is easily negated by installing the heat pump away from bedrooms or purchasing the quietest options available.

Making the Final Decision

Ultimately, if the savings have caught your attention, the heat pump may be the perfect replacement for an electric hot water system. It complies with all regulations and is the most straightforward swap.

Research will bring you one step closer to understanding what the best water heater might be for your home. Likewise, a helpful move could be chatting to a local hot water specialist. 

The team here at Jim’s Plumbing can assist in hot water replacement, removal and installation. With access to the latest models and all the leading brands, we can easily source a system that will suit your needs, and meet all Australian building codes. If you want to know more, just contact Jim’s Plumbing.

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