Why Eco Foot Recommend Heat Pump Systems Over Tankless Water Heater Installation?

Why do so many households ask about tankless water heater installation?

Because it sounds convenient, space-saving, and promises “hot water on demand.” But what many Victorian residents don’t realise is that there are better, rebate-backed options available, especially under the Victorian Government Hot Water Replacement Scheme.

As a trusted provider of energy upgrades, we want you to make a well-informed decision. So, before you lock in that tankless water heater installation, take a minute to read this insider guide.

5 reasons why heat pump systems often outperform tankless units

1. Heat Pump Systems Are Rebate-Eligible, Tankless Aren’t

The biggest difference is the fact that Tankless(instantaneous) water heater installation is not covered under the Victorian Government Hot Water Replacement Scheme. That means no rebates, no installation support, and no energy bill relief from the program.

On the other hand, heat pumps are eligible. Through the Victorian Energy Saver Program (under the VEU initiative), households that install heat pumps may get significant financial support in some cases, paying as little as $200 out of pocket.

So if you’re asking, “Who is eligible for government free hot water systems in Victoria?” — it won’t be for electric tankless water heaters or gas tankless water heaters. It’s heat pumps all the way.

2. True Energy Savings with Heat Pump Technology

Tankless units are often advertised as “energy efficient.” But let’s break that down. These systems heat water instantly when the hot water tap is turned on. Sounds efficient, right?

They often draw a lot of power (electric) or require upgraded gas lines (gas models) to work effectively. And when your cold water input temperature is too low (which is common in Victorian winters), your system ends up working harder.

Heat pumps work differently. They draw ambient heat from the air and use a compressor to heat water stored in a tank. This method delivers up to 70% energy savings compared to traditional tank heaters, and without the performance issues seen in tankless hot water systems during winter.

Also, if you’re looking for energy savings and reduced energy consumption, heat pumps are the gold standard.

3. Tankless Units Come With Hidden Costs

Before installing a gas tankless(instantaneous) unit, you might need to upgrade your gas supply, which isn’t cheap. And if you are opting for electric tankless water heaters. Be prepared for possible changes to your electrical circuit to accommodate the load.

Add in the fact that tankless units often require water supply line modifications, and suddenly, your upfront installation cost is much higher than you expected.

Meanwhile, a heat pump water heater system typically comes with free or low-cost installation when done through an accredited provider like us, under the Victorian Energy Upgrades Program.

4. Heat Pumps Are Better for Families and Large Homes

If you have multiple family members using hot water on demand, a tankless water heater installation may fall short. Because these systems heat water as it flows, the pressure can drop when more than one person is using hot water at the same time.

Heat pump hot water systems, on the other hand, store hot water in well-insulated storage tanks, meaning there’s always hot water ready, regardless of how many taps are running. This makes them the first choice for busy homes where multiple showers, appliances, or baths might be used at once. Newer models come with smart features that let you schedule heating times, making it easier to manage energy use.

5. Tap into Government Support Now

The Heat Pump Hot Water Rebate in Victoria and other incentives under the VEU Program are currently active, but rebates are subject to change. Waiting could mean missing out on current offers, including the Federal Government Hot Water Rebate.

Many homeowners ask us about Vic hot water upgrades reviews, and the feedback is consistent: households love the cost savings, quiet performance, and comfort that heat pumps bring.

As an accredited VEU provider, we handle everything:

• Site eligibility
• Old system decommissioning
• Installation
• Rebate paperwork

Installer’s Advice (How You Can Avoid a Costly Mistake)

As accredited professionals installing hot water systems across Victoria, we’ve seen just about everything.

One of the most common issues we come across is this:

People are replacing their old electric storage unit with a new tankless (instantaneous) water heater, only to realise weeks later that they’ve missed out on a huge discount from the government.

We genuinely care for these customers. They often say things like:

• “We thought we were doing the right thing.”
• “Nobody told us we wouldn’t get the rebate.”
• “It’s brand new — how can it not be eligible?”
  

Rebate eligibility is all about long-term efficiency, energy ratings, and if the system meets the Victorian Energy Upgrades (VEU) or other government program standards.

Tankless Water Heater Installation

Tankless water heaters might sound great. Instant hot water, small wall-mounted units, minimal footprint. But here’s something you overlook:

• They don’t store water – and most rebates are only offered on storage-based systems like heat pumps.
• They require high power draw during usage, which spikes your energy bills.
• And worst of all, they’re not currently eligible under most Victorian rebate schemes in 2025.

We’ve had customers in suburbs like Werribee, Hoppers Crossing, or Ballarat call us after installing one privately, only to be shocked when they realise it wasn’t claimable under any rebate.

What We Recommend Instead: Rebated Heat Pump Systems

We always recommend exploring rebated heat pump hot water systems first — especially if:

• You live in a regional area with high electricity costs
• You’re replacing an old electric, solar, or gas system
• You want to claim rebates that can cover most of the system and installation costs

A client had recently swapped their non-functional gas unit for an Ecogenica 290L heat pump. With government support and our help navigating the paperwork, they paid just over $200 upfront. They now enjoy:

• Up to 70% less energy usage on hot water
• Steady hot water pressure
• Quiet operation (lower than a dishwasher!)
• And yes, full VEU rebate compliance

Rebates are to push smarter, cleaner energy. If you want support, savings, and sustainability, go for a heat pump and do it through an accredited installer like Eco Foot.

Make sure to factor in:

• Installation costs
• Ongoing energy use
• Lack of rebates

Instead, explore how heat pump water heaters offer superior energy savings, support from the Victorian government, and reliable hot water. Get in touch with our team today to learn more or check your eligibility for the Victorian Energy Upgrades Program.