The Facts on Heat Pumps
How do they work?
A heat pump system is made up of a water storage tank and a heat pump. The heat pump consists of a condenser, a compressor and an evaporator.
Heat pumps work like a refrigerator in reverse. They extract heat from the surrounding air to heat a refrigerant gas which is held in the evaporator. The gas expands and moves to the compressor which increases the temperature and pressure of the gas, a process which generates heat. Heat energy is transferred to the water and the gas cools and returns to the evaporator to start the cycle again.
Unlike solar hot water systems, heat pump systems do not need to be exposed to direct sun.
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What you need to know about heat pumps
- Before purchasing a heat pump, consider that these systems make a similar level of noise as ducted air conditioning or a pool filter. You will need to ensure the system is not installed near bedroom windows and does not adversely impact your neighbours as it may be subject to noise control.
- You will need to allow space around the system for ventilation.
- The preferred supplier will help you ascertain whether a Development Application is required by your local council.
Financial Incentives
RECs
What are Renewable Energy Certificates?
Renewable Energy Certificates (RECs) are an electronic form of currency. You receive one REC for every one megawatt hour (MWh) of electricity generated by your heat pump hot water system.
Small-scale and Large-scale Technology Certificates
RECs have been reclassified as Large-scale Technology Certificates (LTCs) and Small-scale Technology Certificates (STCs). New solar and heat pump hot water heaters may be eligible to create STCs. RECs is still an umbrella term that covers STCs and LTCs.
What are RECs worth?
The value of a REC is not a fixed price. RECs are a tradeable commodity, so the value of a REC is determined by the demand and supply for RECs and may vary from buyer to buyer and from day to day.
What can I do with my RECs?
There are two main choices for residents in relation to RECs:
- You can surrender your RECs to a registered agent (usually via the retailer of the product) in return for a discount or a cash payment at the time you buy your new system.
- You can hold onto your RECs and sell them at a future time or retire them so your heat pump system fully contributes to directly reducing greenhouse gas emissions rather than allowing another polluter to offset their emissions.
How do RECs relate to the Renewable Energy Target (RET) scheme?
The Renewable Energy Target (RET) scheme sets targets for the production of additional electricity generated from renewable energy sources. Australia currently has a set target of sourcing 20% of energy from renewable resources by 2020.
Electricity retailers and other purchasers of wholesale electricity (called liable parties) are required to contribute towards these increasing annual targets.
The liable parties show their compliance with the requirements of the RET scheme by obtaining RECs, where each REC is equal to one MWh of electricity generated from a renewable energy source.
The Office of the Renewable Energy Regulator, phone (02) 6274 2192, has more information about RECs.
Rebates
$600 is available from the Australian Government under its Renewable Energy Bonus Scheme. The Australian Government's website has details of eligibility requirements.
Fact Sheet