How Does a Hot Water Heat Pump Work?

The reason hot water heat pumps are so efficient is that they move existing heat rather than generating it from scratch. Even on a 5C winter morning in Christchurch, the air outside contains a large amount of thermal energy. A heat pump captures that energy and concentrates it to heat the water in your cylinder to 60-65C.

Think of it this way: the electric element in a standard hot water cylinder converts 1kW of electricity into 1kW of heat, and that is as good as direct conversion gets. A heat pump uses 1kW of electricity to move 3-4kW or more of heat from the air into the water. It is not creating energy from nothing; it is using a small amount of electricity to harvest a much larger amount of ambient heat.

This is the same technology behind your fridge and the air-to-air heat pump on your lounge wall. What has changed in recent years is its application to domestic hot water, plus efficiency gains and falling hardware costs that make it practical for New Zealand homes. One naming note: in NZ, "heat pump" on its own usually means space heating. The product this guide covers is the hot water heat pump, which heats the water in your cylinder.

A hot water heat pump works through four stages in a continuous cycle:

1. Evaporation: A liquid refrigerant flows through the evaporator coil (the unit with the fan). As air passes over the coil, the refrigerant absorbs heat and evaporates into a gas. This works because the refrigerant has an extremely low boiling point, so even cold air carries enough energy to boil it.

2. Compression: The compressor squeezes the low-pressure gas into a high-pressure, high-temperature gas. This is where the heat gets concentrated. The compressor is the main electricity user, but because it only compresses gas rather than generating heat directly, it uses a fraction of what a resistive element would.

3. Condensation: The hot gas passes through a heat exchanger wrapped around or inside the cylinder, transfers its heat to the water, and condenses back into a liquid. The water heats to the set temperature, typically 60-65C.

4. Expansion: The liquid refrigerant passes through an expansion valve, dropping its pressure and temperature so it can absorb heat again. The cycle repeats.

Once the cylinder reaches the set temperature, the compressor stops. It restarts when the water temperature drops below a threshold or when triggered by a timer.

COP stands for Coefficient of Performance: the ratio of heat output to electrical input. A COP of 3.5 means 3.5 units of heat for every 1 unit of electricity.

In dollar terms: at a typical NZ residential rate of about 35c/kWh, delivering 10kWh of heat into your water with a standard electric element costs about $3.50. A heat pump with a COP of 3.5 delivers the same 10kWh of heat using roughly 2.9kWh of electricity, about $1.00. That is around a 70% cut in hot water running cost, which lines up with the 65-75% savings typically quoted for swapping an electric cylinder for a hot water heat pump.

An important detail: COP varies with air temperature. Manufacturers quote COP at a standard test condition (often around 20C ambient). In colder conditions there is less heat in the air to harvest, so COP drops; in warmer conditions it improves. The seasonal COP, averaged across a year of real weather, is the more useful number for estimating bills.

For most of the upper North Island, seasonal performance sits close to rated performance. In the coldest inland South Island areas it drops in winter but stays well above 2.0, still at least twice as efficient as an element.

The refrigerant is the working fluid that carries the heat. The choice significantly affects cold-weather performance.

R134a: Common in older and budget models. Performance drops noticeably below about 5C ambient, and it is a synthetic fluorocarbon with a high global warming potential that is being phased down globally.

R290 (propane): A natural hydrocarbon refrigerant with near-zero climate impact if leaked and good low-temperature performance. Systems use very small charges and must meet strict safety standards. Increasingly the standard choice in new integrated models.

CO2 (R744): Carbon dioxide as a refrigerant. Excellent cold-weather performance, holding strong efficiency even well below freezing, and particularly good at heating water to high temperatures. It runs at much higher pressures, which requires specialised components and pushes up the price. In New Zealand, CO2 split systems are the premium tier; Reclaim Energy is the best-known example.

For Auckland, Northland and most coastal areas, R290 and R134a models perform well. If you are in Canterbury, Otago or Southland, or anywhere with hard frosts, a CO2 model is worth the premium for its winter performance.

Hot water heat pumps come in two configurations:

Integrated (all-in-one) systems have the compressor, evaporator and cylinder in a single unit. NZ examples include the Rheem AmbiHeat, Rinnai HydraHeat, Stiebel Eltron WWK series and Econergy integrated cylinders. Advantages: simpler installation, one connection point, lower install cost, compact footprint. Disadvantage: the compressor sits on the cylinder, so they run louder than splits, and the whole unit must live where the cylinder lives.

Split systems have a separate outdoor unit connected to the cylinder by refrigerant lines. NZ examples include Reclaim Energy and the Rheem EcoPlus. Advantages: much quieter at the cylinder, flexible placement of the outdoor unit, generally higher efficiency. Disadvantages: higher installation cost and two units to find space for.

If the unit will sit near a bedroom window or a neighbour's boundary, a split system is the safer choice. The difference between a quiet split and an integrated unit is very noticeable at night.

Residential hot water heat pump cylinders in NZ typically range from about 200L to 340L. Unlike continuous-flow gas, a heat pump heats water in advance and stores it, so cylinder sizing matters.

General guidance:

• Around 200-250L: 1-3 people with typical use.
• Around 270-300L: 3-4 people; the most common replacement size. NZ models in this class include 270L and 275L units.
• Around 340L: 4-6 people or high hot water use; the Rinnai HydraHeat 340L is an example at this end.

Recovery time is how long the heat pump takes to reheat a depleted cylinder, typically a few hours for a full reheat rather than the hour or so an element or gas burner takes. That is why correct sizing matters: a well-sized cylinder rides through the morning rush and reheats during the day.

Most systems include an electric element boost that can supplement the heat pump during unusually heavy demand. It costs more to run, so it is best reserved for exceptions rather than daily use. For the full sizing method, see our sizing guide.

A common question is whether hot water heat pumps work in cold weather. The answer is yes, with some physics to understand.

When the air temperature drops toward freezing, moisture in the air can freeze on the evaporator coil. The system periodically runs a defrost cycle to melt this ice, briefly reversing the cycle and borrowing some heat back. Defrost cycles reduce net efficiency and add a few minutes of run time, which is normal and automatic.

In New Zealand terms, climate zones run from mild (Northland and Auckland) through moderate (Waikato, Bay of Plenty, Gisborne) and cooler central regions (Taranaki, Hawke's Bay, Manawatu-Whanganui, Wellington, Nelson and Tasman, Marlborough) to the coldest zones (Canterbury and the West Coast, then Otago and Southland). Frosty inland areas like Central Otago are the toughest test a hot water heat pump faces here.

• Mild and coastal areas: near-rated efficiency most of the year.
• Cooler regions: efficiency dips on winter mornings but remains far ahead of an element.
• Frost-prone inland areas: expect regular defrost cycles in winter. A CO2 model holds its performance best here, and sizing up one cylinder size gives a buffer for slower winter heating.

Even at its winter worst, a heat pump delivering a COP of 2 is still half the running cost of an element, and across the whole year it is far better than that.

Efficiency is not constant through the year, and knowing the pattern helps you set expectations.

Summer (Dec-Feb): Peak efficiency. Warm air means short run times and the highest COP. This is also when solar production peaks, making daytime heating on solar most effective.

Autumn and spring: Good efficiency, close to the "average" quoted performance.

Winter (Jun-Aug): Lowest efficiency and longer run times, with defrost cycles in frosty areas. Hot water demand also rises in winter, so the system works hardest exactly when it is least efficient. This is already baked into seasonal COP figures.

For annual cost estimates, a seasonal COP of around 3.0-3.5 is a reasonable planning assumption for most of New Zealand, with the warm north doing better and frosty inland areas a little worse. Many modern controllers display live and historical performance so you can see actual COP against expectations.