Savings with Solar Batteries and Heat Pump - Solar Citizens

Savings with Solar Batteries and Heat Pumps

So you’ve got solar on your roof, but your energy bills have increased alarmingly. What are the best ways to reduce your energy bill? The most effective are:

  1. Improve your home insulation (first the ceiling, then your windows)
  2. Improve your home's solar access, i.e. more sun in winter or more shade in summer
  3. Replace your gas hot water heater with an electric heat pump.
  4. Add a solar battery

Assuming you have already done what you can on #1 and #2, this blog will explore the pros and cons of getting a solar battery or heat pump.

According to Solar Analytics, households with rooftop solar on average have a 6kW system that generates 7760 kWh a year – with 40% of this solar energy used in the home and 60% exported or sold back to the grid. 

So on average, they bought 4,105 kWh from the grid when the sun wasn’t shining. Decreases in solar feed-in tariffs and increases in peak pricing for electricity bought from the grid have led to increases in energy bills for solar customers.

A solar battery will store the excess solar energy generated during the day and allow you to use it in your home in the evening. The money you save by avoiding purchasing from the grid in peak periods far outweighs what you would otherwise earn selling back to the grid at times of solar saturation. 

Alternatively, a heat pump will reduce your gas or electricity bill by reducing how much energy you use because they are 3-4 times more efficient than older technologies.  

The table below shows a summary of the Pros and Cons of each option.



Heat Pump

Cost (after rebates)

$6,000 - $17,000 (5 to 13kWh)

$1,000 - $5,000

Savings (per annum)

$390 to $1,600

$440 - $1,100 (replacing gas)


10-15 years

10-20 years

Back-up in a power outage

Yes (if included)


Return on Investment (ROI)

Negative to +15%

8% to 51%

Environmental benefit

Variable, depending on the impact on coal-fired generators and the ability of batteries to enable more and bigger solar installations

High. Replaces gas with 3-4 times more efficient electricity, with the potential of being 100% renewable

Generally recommended for

Higher energy users with a big solar system, especially on a Time-of-use tariff

Anyone with gas hot water who has space for the heat pump system


To find out the cost and benefit of these technologies based on your energy profile, you can use the free online tool Solar Maximiser

Solar Battery

The key advantages of adding a battery to your solar system are a) reducing your energy bill by self-consuming more of your own solar in the evening, and b) having back-up so that you still have power for at least some of your energy loads if there is a grid blackout.

Whilst the economics of household batteries will continue to change as prices come down, Solar Analytics have crunched the number for their 35,000 customers and with the recent electricity price rises batteries will make a positive return on investment for 22% of their solar customers. Their battery calculator finds that a 8.6kWh battery is the most commonly recommended size, however this varies significantly depending on the customer energy profile and preferences. 

For general guidance on purchasing a solar battery refer to this Choice article.

Heat Pump

Heat pump hot water systems use a heat exchanger like your fridge or air conditioner, except that it is heating rather than cooling. They extract heat from the air and use it to heat the water which is then stored in a 200 to 300 litre water tank.

The main advantage of a heat pump is that it is 3-4 times more efficient than any other source of heating, so it will only use approximately 2kWh per day, and this can all be provided from your solar system. This makes them much greener than any other form of hot water heating. 

The main disadvantage is that the upfront cost is higher than gas or resistive electric hot water systems. The operation of the heat pump will also generate some noise when it is running, which can be annoying if it is located directly outside your bedroom window.  

For more information on choosing between different types of hot water heating, see this Choice article. 

Because of the lower climate/greenhouse impact of heat pumps, there are several government rebates to offset the purchase of heat pumps. Your heat pump retailer will be able to explain these to you, or you can use Solar Maximiser. SwitchedOn has also compiled a list of rebates available that are currently available around the country to help purchase efficient electric appliances.

A word of caution

You get what you pay for. Just like rooftop solar, there are some very poor-quality heat pumps and batteries on the market. It pays to shop around and seek independent information before making your purchase. Be cautious with any offer that looks too good to be true… because you will end up with poor quality, inefficient equipment that does not deliver the savings promised. 

This explainer comes to you courtesy of Solar Analytics CEO Stefan Jarnason. Solar Analytics offers software that simplifies your decision to electrify your house and helps deliver more value from your solar systems. You can find out more about Solar Analytics and their services here.