Solar diverter vs heat pump hot water: making the right choice for Perth homes

If you already have solar and a hot water tank in decent shape, a solar diverter is the cheaper, faster upgrade: it uses the tank you've already got, costs meaningfully less to install than a heat pump system, and typically pays back faster from grid savings alone. If your hot water system is old, gas-fired, or you want the lowest running cost for the next decade, a heat pump hot water system costs more to install but uses roughly a third of the electricity for the same hot water.

Both turn midday solar you'd otherwise export for almost nothing into hot water you'd otherwise buy from the grid. The right choice depends on the age of your current system, how much solar surplus you generate, and whether you're staying electric-resistive or switching away from gas. Here's how to work out which fits your Perth home.

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Why does hot water timing matter if you have solar?

Most Perth homes with electric hot water heat the tank on a timer, a setup from before rooftop solar was common, often running overnight. If you're on Synergy's flat A1 rate, that overnight heating costs exactly the same per kWh as heating at midday: currently 33.2621c/kWh, day or night. A smaller number of older homes are still on Synergy's separate controlled-load hot water tariff, which is no longer offered to new customers and does charge less overnight, but even then none of that heating comes from the solar sitting unused on the roof.

The arbitrage that makes both technologies worth considering:

1. Your panels generate the most power roughly between 9am and 3pm.
2. Any of that generation your home doesn't use gets exported at Synergy's DEBS rate: 2c/kWh outside the 3pm-9pm peak window.
3. Draw grid power for hot water instead, and you pay the A1 rate: 33.2621c/kWh.
4. Shift the heating into that same 9am-3pm window, and the gap between those two numbers, 31.26c/kWh, becomes your saving.

That's the financial case for both a solar diverter and a heat pump hot water system. Where they differ is how they capture it.

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What does a solar diverter do?

A solar diverter is a small device that watches your home's net metering point and redirects surplus solar generation into your existing hot water element before any of it reaches the grid.

How it works. When your panels are generating more than the house is using, the diverter feeds that surplus into the hot water element. It modulates the power continuously, using phase-angle or burst-fire control depending on the model, to match whatever surplus is available, so it never pulls extra from the grid. The element itself doesn't change.

What you need. A resistive electric storage system: the standard element-in-a-tank setup most older WA homes already have, including most legacy continuous-supply electric systems. A diverter doesn't work with gas, instant electric, or heat pump systems.

Cost. A solar diverter costs meaningfully less to install than a heat pump hot water system. Some installers bundle it into a solar package at a lower add-on price. Get a quote from a local installer to confirm pricing for your setup.

For a closer look at how diverters pay for themselves in a typical Perth household, see our guide to solar diverters for hot water.

Pros:

• Low upfront cost
• Works with your existing tank, no replacement needed
• Simple installation
• Starts saving as soon as the tank next needs heating

Cons:

• Only helps when there's surplus solar: on low-generation days (winter, heavy overcast) the tank still heats from the grid, or not at all
• Inherits the existing element's efficiency: resistive heating is 1 kWh in for 1 kWh of heat
• An old, poorly insulated tank stays inefficient, the diverter just changes where the power comes from
• Doesn't work with gas, instant, or heat pump systems

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What does a heat pump hot water system do?

A heat pump hot water system uses the same refrigerant cycle as a reverse-cycle air conditioner, run to move heat inward instead of outward: it pulls heat out of the outside air and pumps it into the tank. It still runs on electricity, but for every unit it consumes it moves about four units of heat into the water.

Coefficient of Performance (COP): the ratio of heat delivered to electricity consumed. Most heat pump hot water systems run at a COP between 3 and 5 depending on the model and the air and water temperature on the day, with around 4 typical in Perth conditions: one unit of electricity in for about four units of heat out, the reason they use so much less power than a resistive element. The worked figures below use a COP of 4 as a representative mid-range value.

Cost. A heat pump hot water system costs more to install than a solar diverter, with pricing varying by size, brand, and tank capacity, so get a few quotes to compare. WA doesn't currently offer a dedicated rebate for heat pump hot water, unlike some other states' energy-efficiency schemes. Check whether the system qualifies for Small-scale Technology Certificates (STCs): most heat pump hot water units do, which reduces the install cost. Ask your installer for the STC value on your specific system, since it depends on the unit's rated capacity.

How to combine with solar. Set the heat pump's timer to run during the 9am-3pm solar window. On the A1 tariff, it draws power at 33.2621c/kWh but delivers about four times the heat, working out to a net effective cost of roughly 8.3c/kWh. Paired with solar self-consumption, that's about as cheap as hot water gets without a battery.

For the full rundown on running costs and how it stacks up against other systems, see our complete guide to heat pump hot water in Perth, or check our tips on timing your hot water system around solar.

Pros:

• Roughly three to five times the heating efficiency of a resistive element, around four times in typical Perth conditions
• Works on a timer regardless of solar: still benefits low-solar days
• Runs on any electricity source: solar, grid, or battery
• Useful lifespan of 10 to 15 years
• Eligible for STCs

Cons:

• Higher upfront cost than a diverter
• Needs outdoor installation space, since the unit draws air from the environment
• Makes some noise, similar to a small air conditioner unit, so avoid siting it directly under a bedroom window
• Heats more slowly than a resistive element on high-draw days
• Loses some efficiency as ambient temperature drops, which is common on Perth winter mornings: expect a modest performance dip on those mornings rather than the outdoor unit's full capacity

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How do a solar diverter and heat pump hot water compare side by side?

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Which is right for your situation?

Choose a solar diverter if:

• Your existing hot water tank is less than 8 years old and in good condition
• You want low upfront cost and a fast payback
• You're on an A1 tariff and generating meaningful solar surplus at midday
• You don't have space for an outdoor heat pump unit

Choose a heat pump hot water system if:

• Your existing hot water system is approaching replacement age (10-plus years for resistive systems)
• You're replacing a gas hot water system and want to electrify
• You want the lowest possible long-term electricity cost for hot water
• You have space for the outdoor unit

If you're on Midday Saver rather than A1, the numbers shift again: daytime electricity on that plan runs about 8.852c/kWh. Set the heat pump's timer to the 9am-3pm window and that works out to roughly 2.2c/kWh effective hot water cost (8.852c divided by a COP of about 4), cheaper than the 2c/kWh you'd get for exporting that same power under DEBS, except you end up with hot water instead of an export credit. For a full breakdown of when Midday Saver beats A1 and when it doesn't, see our Midday Saver vs A1 comparison.

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Is solar thermal hot water still worth considering?

Traditional solar thermal, flat-plate or evacuated-tube collectors bolted to the roof, still exists as an option, but it's a harder case to make for a new install:

• Highest upfront cost of the three options covered here
• A separate plumbing loop running across the roof
• Collector performance drops over 10 to 15 years as the system ages
• No way to redirect the extra capacity elsewhere on a cloudy day
• Lower STC value than heat pump systems in most configurations

For most new Perth installs, heat pump hot water has replaced solar thermal as the system that actually pairs well with a solar array. Our full comparison covers where solar thermal still makes sense: solar thermal vs heat pump hot water.

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Not sure which category your current system falls into? Check the compliance plate near the tank. It lists the manufacture date and element wattage, and that alone tells you whether you're looking at a diverter-friendly resistive tank or a system old enough to justify replacing outright.