The Ultimate New Zealand Heat Pump Running Cost Guide

Why Running Costs Matter More Than Purchase Price

When most people start shopping for a heat pump, the first thing they look at is the installed price. That makes sense. A heat pump is a significant investment, and it is natural to compare brands and models based on what they cost to buy.

But the purchase price is only part of the story. A quality heat pump can remain in your home for 12–20 years. Over that time it may run for thousands of hours through both winter and summer. The electricity it uses, how efficiently it runs, and whether it is correctly sized can make a big difference over the life of the unit.

A cheap heat pump that is too small, poorly positioned or never serviced can become disappointing to live with. A correctly sized and well-maintained system may cost more upfront, but it can be more comfortable, more reliable and cheaper to operate over time.

How a Heat Pump Actually Works

One of the biggest misconceptions about heat pumps is that they create heat. They do not. Instead, they move heat from one place to another.

Even on a cold winter morning, there is still heat energy in the outside air. A heat pump uses refrigerant to absorb that heat, compress it to a higher temperature, then release it inside your home.

A fan heater is different. Electricity passes through an element and the element gets hot. One kilowatt of electricity gives roughly one kilowatt of heat. A heat pump uses electricity mainly to run the compressor and fans so it can move heat that already exists.

What Is COP and Why Are Heat Pumps So Efficient?

COP stands for Coefficient of Performance. It tells you how much heat a heat pump delivers compared with the electricity it uses.

A normal electric heater is close to COP 1.0. That means 1kW of electricity gives about 1kW of heat. A heat pump may operate around COP 3 to 5 in good conditions, meaning 1kW of electricity can move around 3–5kW of heat into the home.

This is why comparing heating systems by electrical input alone can be misleading. A 5.4kW heat pump does not necessarily use 5.4kW of electricity while heating. If it is operating at a COP of 3.5, it may use roughly 1.54kW of electrical input while delivering 5.4kW of heat output.

Why Frosty Mornings Cost More

Heat pumps work hardest when it is cold outside. On frosty mornings there is less easily available heat in the outdoor air, and moisture can freeze on the outdoor coil.

When the outdoor coil ices up, the heat pump may enter a defrost cycle. During defrost, the system temporarily clears the ice from the outdoor coil. Indoor heating can reduce for a short period while this happens.

This is normal. It does not usually mean the heat pump is faulty. It does mean the system may use more energy and deliver less heat during very cold, frosty conditions than it would on a mild winter evening.

Why Correct Heat Pump Sizing Matters

Choosing the correct size heat pump is one of the most important parts of getting good comfort and low running costs. An undersized heat pump may run flat out for long periods and still struggle to reach the set temperature. This can make the unit feel like it is always working but never quite catching up.

Bigger is not always better either. An oversized unit may cost more to buy than necessary and can heat smaller areas too quickly, causing more cycling in some situations. The goal is not the biggest unit. The goal is the correct unit for the room.

A heat pump should be selected based on room size, ceiling height, insulation, windows, sun exposure, home age, layout and how the room is used.

Best Heat Pump Temperature Settings

For winter heating, a good starting point is usually around 18–21°C. Some people prefer 22°C, especially in older or draughtier homes, but every extra degree can increase energy use.

Setting the heat pump to 30°C does not generally heat the room faster. It simply tells the heat pump to keep heating until it reaches a much higher temperature.

For summer cooling, a good starting point is often around 23–25°C. Setting cooling to 16°C usually does not cool the home faster; it just makes the system work harder and keep cooling for longer.

Heat Pump vs Wood Fire

A real fire is hard to beat for atmosphere. The flame, radiant heat and cosy feeling of sitting in front of a wood burner on a cold winter evening is something a heat pump simply cannot recreate.

If you have access to free dry firewood and enjoy cutting, stacking and lighting a fire, a wood burner can be a very good heating option. But not everyone has free firewood or the time and space needed to manage it.

Buying firewood can mean paying for delivery, stacking it, storing it, keeping it dry, carrying it inside, lighting the fire, cleaning ash and allowing for chimney maintenance. For some people, that is part of the appeal. For others, it is a lot of work.

A heat pump gives a different type of comfort. Pick up the remote, set the temperature and walk away. No smoke, no ash, no firewood and no relighting. It also provides cooling in summer, which a fireplace cannot do.

Heat Pump vs Gas Heating

Gas heating can provide strong heat and may suit some homes, especially where a good flued gas heater is already installed. But running costs depend on gas price, appliance efficiency, daily charges and how the heater is used.

Flued gas heaters send combustion gases outside, which is generally better for indoor air quality than unflued portable gas heaters. Unflued gas heaters release moisture and combustion by-products into the room and are not ideal for many homes.

A heat pump avoids combustion inside the room and also gives cooling in summer. When comparing gas and heat pumps, look at running cost, installation, maintenance, comfort and year-round usefulness.

Maintenance: The Part People Forget

To be upfront, heat pumps need maintenance. If you want the system to keep running efficiently, you should allow for regular filter cleaning and professional servicing.

We recommend allowing around $180 per year for annual servicing. This helps keep the indoor and outdoor coils clean, drains clear, airflow healthy and the system operating as efficiently as possible.

Blocked coils and dirty filters restrict airflow. When airflow is restricted, the heat pump has to work harder and for longer to heat or cool the room. That can raise running costs and place extra pressure on the compressor, fans and internal components.

Dirty indoor coil

Moisture and dust can contribute to mould and reduced airflow.

Dirty outdoor coil

Blocked outdoor coils reduce heat transfer and efficiency.

Restricted airflow

The outdoor unit needs clear airflow to perform properly.

So, Are Heat Pumps Cheap to Run?

In most New Zealand homes, a correctly sized and well-maintained heat pump is one of the most economical and convenient ways to heat. It is usually much cheaper to run than standard electric heaters because it moves heat rather than creating it directly.

That said, the true cost depends on the house, the electricity plan, the outdoor temperature, the temperature setting, and the condition of the unit. A dirty, undersized or poorly maintained heat pump will not perform as well as a clean, correctly selected system.

If you already have a fireplace and free firewood, you may still love using it. But if you want efficient everyday heating, summer cooling and push-button convenience, a heat pump is hard to beat.

Frequently Asked Questions