2025 New Zealand Heat Pumps: Costs, Rebates, Warmer Kiwi Homes Eligibility, Installation and Savings — An Informational Guide

Heat pump types and typical cost ranges in 2025

Heat pump systems come in various configurations, and total costs depend greatly on system type and installation complexity.

• Air‑source (split) systems: The most common residential choice. For a single indoor and outdoor split system, purchase plus installation costs vary widely by model, capacity and site conditions. For many New Zealand homes, the all‑in cost generally sits in a lower‑to‑moderate residential range.
• Multi‑split and ducted systems: These provide zoned heating and cover more floor area, which increases equipment needs and installation complexity — and therefore cost.
• Ground‑source (geothermal) and complex systems: Systems needing ground loops, significant site works, or full hydronic integration are considerably more expensive and can approach commercial pricing.
• Water‑source and specialised systems: Usually used where a water heat source is available or in commercial contexts; their pricing reflects greater complexity.

Cost drivers to watch: - The size and capacity needed for your home - Number of indoor units and heating zones - Requirement for new or upgraded electrical supply - Access and mounting challenges (for example, multi‑storey or solid walls) - Ductwork, site works, or ground loops for geothermal installations - Installer labour rates and regional demand

Get multiple quotes from experienced installers so you can compare system sizing, warranties, and the full scope of work rather than focusing only on the headline unit price.

What the Warmer Kiwi Homes heat pump subsidy covers and how it works in 2025

Warmer Kiwi Homes offers targeted financial support to help eligible homeowners install heat pumps. Key points to understand:

• The programme subsidises a large portion of approved purchase and installation costs for qualifying heat pump installations, with a maximum approved subsidy amount set by the programme.
• After approval and installation under the programme, many households experience a substantially reduced out‑of‑pocket cost for a qualifying split system installation.
• The subsidy is administered through EECA‑approved providers and installers who manage the application on the homeowner’s behalf.

Eligibility and how the subsidy is linked to insulation: - Eligibility commonly focuses on homes built before 2008 and on households with a Community Services Card, SuperGold Combo Card, or those living in government‑identified low‑income areas. - To qualify for the heat pump subsidy, a dwelling must meet EECA’s minimum ceiling and underfloor insulation standards. Warmer Kiwi Homes can also provide insulation support to help homes reach those standards. - EECA‑approved providers can assess eligibility and determine the right combination of insulation and heating support for the home.

Insulation: why it matters and the subsidy linkage

Insulation is both a condition of subsidy eligibility and one of the most effective ways to maximise savings from a heat pump.

• Meeting the required ceiling and underfloor insulation standards reduces heat loss, which lowers the required heat pump capacity and cuts running costs.
• The Warmer Kiwi Homes programme also supports insulation upgrades, with a separate subsidy component for insulation work in qualifying homes.
• Prioritising insulation upgrades before or alongside heat pump installation improves comfort, reduces energy use, and typically enhances the payback on the heating upgrade.

Application steps and typical timeline

Following a clear sequence helps avoid delays and improves the chance of subsidy approval:

• Verify eligibility: Contact an EECA/Warmer Kiwi Homes approved provider to review your home and household circumstances.
• Obtain quotes: Ask for at least three quotes from EECA‑approved installers who can handle the subsidy application.
• Apply and schedule: Approved installers submit the subsidy application and, once approved, arrange the installation.
• Installation and inspection: Installers complete the work and any post‑install checks required by the programme.

Overall turnaround from the first quote to finished installation is commonly a few weeks to a couple of months, though scheduling can take longer in peak demand periods.

Installation best practices to maximise performance and savings

Work with an experienced, accredited installer and follow these practical recommendations:

• Proper sizing: Make sure the installer performs a room‑by‑room assessment and sizes units to the home’s heat‑loss profile; oversized or undersized units reduce comfort and raise costs.
• Combine with insulation upgrades: Do insulation and draught‑proofing work before or at the same time as the heat pump to boost effectiveness.
• Site preparation: Clear access paths and mounting locations, and sort any electrical supply needs before the installer arrives.
• Seasonal timing: Scheduling installation in spring or autumn can shorten lead times.
• Confirm warranty and service terms: Be clear on recommended routine maintenance and what the warranty covers.

Running costs, maintenance and expected savings

Running costs and savings vary with usage, climate, and home performance:

• Annual running costs for a well‑sized basic split system depend on household behaviour, insulation and local climate, but many households find running costs are substantially lower than older electric or inefficient heating methods.
• Routine maintenance, such as filter cleaning and an annual service by a qualified technician, helps preserve efficiency and typically involves modest yearly costs.
• Smart controls, correct zoning, and consistent maintenance all help lower energy use and extend equipment life.

Simple habits — regular filter cleaning, prompt repairs, and sensible thermostat settings — protect efficiency and savings.

Features and technologies that improve efficiency

When comparing models and options, look for technologies that support long‑term efficiency:

• Inverter compressors for variable output and smoother, more efficient operation
• Modern refrigerants and efficient heat‑exchange components
• Smart thermostats and app controls for scheduling and remote management
• Zoned controls and sensors to heat only occupied spaces

Ask installers to explain how these features could affect operating costs and comfort in your specific home.

Other funding sources and practical next steps

In addition to Warmer Kiwi Homes, consider: - Local council or electricity retailer programmes that sometimes offer complementary incentives - EECA guidance and tools for home energy efficiency - Community or charity programmes that may assist eligible households with retrofit work

Practical next steps: - Verify your eligibility with an EECA‑approved provider - Get at least three EECA‑approved quotes that include full scopes of work - Prioritise insulation and draught‑proofing where needed - Plan for routine maintenance to preserve savings

Deciding which system suits your home

Selecting the right system depends on household needs, building layout, and long‑term running costs:

• For many households, a correctly sized split system heat pump offers the best mix of affordability and performance.
• Larger, whole‑house ducted systems or geothermal solutions are appropriate for bigger or unusual properties but require careful analysis of long‑term costs and benefits.
• Always request a heat‑loss assessment and ensure proper insulation before committing to a system.

Conclusion

In 2025, heat pumps continue to be a practical path to warmer, healthier, and more energy‑efficient homes in New Zealand. By understanding system types, how the Warmer Kiwi Homes programme ties subsidies to insulation, and by following installation and maintenance best practices, homeowners can make informed decisions that enhance comfort while managing ongoing energy costs.

Sources

• EECA — Energy Efficiency and Conservation Authority (New Zealand): https://www.eeca.govt.nz/
• Archipro — The true cost of buying and installing a heat pump in New Zealand: https://archipro.co.nz/article/heat-pump-installation-costs-new-zealand

Prices, financing options, and availability vary by region, dealer, and current promotions. Always verify current information with local dealers. Offers and incentives are subject to change and may vary by location. Terms and conditions apply.