The Australian heat pump industry is growing in leaps and bounds, with many rushing to electrify homes and small businesses. However, the industry advocacy group is urging caution and urgent reform before long-term damage is done to the credibility of the technology and the programs designed to support it.
The Air-Conditioning and Refrigeration Equipment Manufacturers Association of Australia (AREMA) has issued a warning that, while state-based incentive schemes have good intentions, they are undermined by flaws in product performance, installer capability, and regulatory enforcement.
“We strongly support the electrification of homes and the move towards net zero,” said Air-Conditioning and Refrigeration Equipment Manufacturers Association of Australia. Managing Director Greg Picker. “Programs designed to accelerate that shift need to be built on solid foundations, but right now, that is not the case.”
The industry confirmed that it has raised concerns with the government over the past two years, but has seen little movement on reforms.
“We have seen equipment installed that poses safety risks, fails to deliver promised electricity savings, and is put in by people who are not properly trained or licensed.”
According to AREMA, the core issues lie in three areas: product safety and performance, workforce competency, and compliance.
“There are well-designed, highly efficient heat pumps that deliver real benefits to households and businesses, but they’re being crowded out of the market by cheaper, poorly made products backed by aggressive sales tactics and questionable practices,” Greg said.
“Sadly, these quality products have become the exception. Responsible companies can’t compete against cut-price products with installers who are focused on how many rebates they can get in a day.”
He added that responsible manufacturers and skilled tradespeople are finding it increasingly difficult to compete in an environment where short-term volume is rewarded over long-term outcomes.
“If we don’t see meaningful reform this year, then we believe the incentive schemes should be paused until they can be fixed. Otherwise, we risk eroding public trust in a very promising technology,”
AREMA is calling for clear and enforceable minimum standards for safety and energy performance, mandatory training and licensing for tradespeople who install hot water heat pumps, and a strong compliance framework to prevent fraud and misuse of government funds.
“These are not complicated asks, they are basic requirements for any program that is spending public money and reshaping the way Australians use energy.”
For now, AREMA advises consumers to take a cautious approach.
