2026 New Zealand Heat Pumps: Costs and Subsidies

Heat Pump Types in New Zealand

Heat pumps in New Zealand generally come in several configurations, primarily air-source and ground-source types. Air-source heat pumps extract and transfer heat from outside air to inside the home, whereas ground-source heat pumps use subterranean heat through ground loops. Air-source is the most common due to lower upfront costs and ease of installation.

Common Variants

• Single-split systems: Consist of one outdoor unit connected to one indoor unit, suitable for heating or cooling single rooms.
• Multi-split systems: One outdoor unit connected to multiple indoor units, allowing different areas or rooms to be heated separately.
• Ducted systems: Utilise ductwork to distribute heated or cooled air throughout a house, typically more complex and expensive to install.

Considerations for Selection

The choice depends on home size, layout, existing heating infrastructure, and climate considerations. Multi-room dwellings or larger homes may require multi-split or ducted systems for optimal performance.

Typical Costs in New Zealand (2026)

When considering heat pumps in New Zealand, typical price ranges include:

• Basic option: Around NZD 2,000 to NZD 3,500, usually a single-split system suitable for small to medium-sized rooms with standard installation.
• Standard option: Approximately NZD 3,500 to NZD 6,000, often including multi-split systems serving multiple rooms or installations requiring minor electrical upgrades.
• Premium option: Typically NZD 6,000 to NZD 12,000 or more, covering ducted systems, ground-source heat pumps, or installations with significant structural modifications.

Costs vary due to factors like installation complexity, required system capacity, site accessibility, and electrical supply upgrades.

Government Subsidies and the Warmer Kiwi Homes Programme

The Warmer Kiwi Homes programme, administered by the Energy Efficiency and Conservation Authority (EECA), provides subsidies for home heating and insulation improvements aimed at increasing home energy efficiency and health outcomes.

Eligibility Criteria

In 2026, the subsidy generally targets homes built before 2008. Eligibility often requires recipients to hold specific community benefit cards such as the Community Services Card. The programme supports low to middle-income households, including some deciles beyond the lowest income brackets.

An important condition is that the home must meet minimum insulation standards, particularly in ceiling and underfloor areas. Homes not already meeting these standards may be eligible for complementary insulation grants to ensure heating improvements result in meaningful energy savings.

Subsidy Coverage

The subsidy may cover a significant portion of heat pump purchase and installation costs, with percentages depending on household income and region. The Warmer Kiwi Homes programme also supports insulation work, which enhances the effectiveness of heating systems.

Installation Considerations

Effective heat pump installation involves several factors:

• Professional assessment: Accurate sizing of heat pump capacity based on home size, insulation quality, and climate is essential.
• Insulation status: Installing or upgrading insulation may be necessary prior to or alongside heat pump installation to optimise energy efficiency.
• Electrical requirements: Some installations may require upgrades to existing electrical systems, especially in older homes.
• Permits and regulations: Compliance with local building codes and regulations should be observed.
• Site access: Installation complexity increases with factors such as multi-storey buildings or buildings with solid walls.

Running Costs and Energy Efficiency

Heat pumps, especially when installed in well-insulated homes, can be a cost-effective heating source. Electricity use for heat pumps varies depending on operation modes, temperature settings, and climate. Modern heat pumps typically have high coefficients of performance (COP), offering more heat energy output than electrical energy consumed.

Understanding local electricity tariffs and time-of-use pricing can help manage operating expenses. Some regions in New Zealand provide off-peak electricity rates which can influence running costs.

Insulation and Its Role in Heating Performance

Insulation quality significantly affects a home’s heating efficiency. The Warmer Kiwi Homes programme emphasises insulation as a condition for heating subsidies because uninsulated or poorly insulated homes lose heat rapidly, increasing energy consumption and reducing comfort.

Common insulation areas include:

• Ceiling
• Underfloor
• Walls (in some cases)

Meeting EECA minimum insulation standards is a prerequisite for most government heating assistance.

Regional and Environmental Factors

New Zealand’s varied climate affects heat pump performance and selection. Areas like Auckland experience milder winters compared to South Island locations such as Christchurch or Dunedin, where heating demands and insulation requirements may be higher.

Environmental considerations also include choosing refrigerants in heat pumps with lower global warming potential (GWP) and maintaining units to ensure optimal efficiency and longevity.

Summary of Key Points

• Heat pumps are a common, energy-efficient home heating option in New Zealand.
• Costs depend on system type, installation complexity, and home specifics.
• The Warmer Kiwi Homes programme offers subsidies for heat pumps and insulation primarily for homes built before 2008.
• Meeting insulation standards is necessary to qualify for subsidies and achieve energy savings.
• Professional installation and proper sizing are critical for performance and cost management.
• Running costs depend on electricity usage, local tariffs, and home efficiency.

This information reflects the current understanding of heat pump installations and related subsidies in New Zealand for 2026 and aims to assist informed decision-making regarding home heating improvements.