Heat pumps: The fastest growing solar technology you’re probably overlooking

I remember a time when ‘solar panels’ meant ‘solar hot water’ panels.

There was a time when you had to refer to solar power to be clear you weren’t referring to what was Australia’s dominant solar technology. They were referring to metal panels mounted on your roof (and then evacuated glass tubes).

When I started in the industry (2005), for every PV system installed, there were 28 Solar Hot Water Systems added.

In cumulative terms, the crossover point occurred in 2012 when there were just under 1 million of each. Now there are cumulatively 3.5 Million PV systems in Australia. Compared to 1.5 million solar water heaters (1.2M Solar Hot Water Systems + 0.3M ASHPs).

(This is based on REC/STC registration, some SHW / ASHP systems haven’t claimed certificates)

For solar water heating, the tide has turned. More accurately the tide has turned because of the rise of Air Source Heat Pumps, a technology classified as renewable by the Clean Energy Regulator and deemed worthy of creating STCs.

SHPs essentially extract latent heat from the atmosphere at low temperature and pump it into a water storage tank at high temperature, much in the same way a reverse cycle air conditioner pumps heat from the outside to the inside of your home.

In 2010 PV overtook SHW in the number of annual installations (190,000). The growth of photovoltaics (solar power) came at the clear expense of solar hot water.

Solar Hot Water sales slumped back, levelling off in 2013 at ~50,000/year. But Solar Hot Water sales have now been further displaced by ASHP, which is a shame for the Australian manufacturers of Solar Hot Water systems.

PV may still be the dominant technology – there are still far more PV systems installed in the last 12 months (323,000) than there were SHW plus ASHP (115,000). But the growth rate of ASHP installations is far greater than PV.

In the first 10 months of 2021, the number of PV systems (sub-100kW) grew by 7%; the number of ASHPs grew by 76%. The number of ASHP systems installed in 2022 will grow by a further 46%, in stark contrast to PV installations which are set to contract by 22%.

2022 will be the first year of decline in PV installations since 2016

PV retailers are turning their attention to installing other electrical devices – batteries and EV chargers. While an ASHP may be a plumbing technology, the PV industry shouldn’t overlook ASHPs, as:

• ASHPs are part of a trend of home electrification;
• The new 7-star requirements for new-build homes will also drive ASHP uptake;
• ASHP can soak up excess PV generation;
• Eligible Victorians can double-dip and claim a rebate for both PV and ASHP;
• Electrical work is still required to install an ASHP.

Warwick Johnston is the managing director of SunWiz