The average Kiwi household spends around $700 a year just heating water. Larger families easily push past $1,200. That's because most homes still run a 1970s technology — a resistive electric element heating an insulated tank — at 95% efficiency.
A modern hot-water heat pump (also called HPHW or air-source water heater) uses a tiny refrigeration cycle to pull heat out of the air and put it into the water. The result: 3.0–3.5× more efficient than electric resistive across NZ regions.
The numbers (4-person Kiwi family, Auckland, 2026)
- Modern electric cylinder: ~$880/yr
- Hot-water heat pump (Carrier Blue 270 L): ~$260/yr
- Annual saving: ~$620
- Install cost: ~$6,500 → payback ~6–7 years
Other quick wins while you're at it
- Wrap your existing cylinder ($40–60, pays back in months)
- Insulate the first 1–2 m of hot pipe coming off the cylinder
- Drop the temperature to 60 °C (any lower risks legionella)
- Install a low-flow showerhead — a 9 L/min head saves ~$200/yr vs a 15 L/min head
Run the maths for your household with our Hot Water Sizer.