Heat Pump or Solar First? Where to Spend $10k

If you've got around $10,000 to spend and you're choosing between a heat pump and a solar system, for most New Zealand homes the heat pump wins the first round. A good high-wall heat pump runs roughly $2,500 to $4,500 installed, and EECA's Gen Less programme rates modern heat pumps as the most efficient way to heat a home, delivering around 3 to 4 units of heat for every unit of electricity. That means your remaining budget can still cover a meaningful solar system, or your insulation, or both over time. Solar is genuinely worthwhile in NZ, but it saves you money on power you're already using efficiently. Heating an under-insulated home with a low-cost plug-in heater and then bolting solar on top is doing the maths in the wrong order.

Why this question matters more than the brochures admit

Here's the thing nobody selling you either product wants to say out loud: a heat pump and a solar array solve different problems, and the order you buy them in changes how much you actually save.

A heat pump reduces the energy you need to keep your home warm and dry. Solar changes where that energy comes from and what you pay for it. Reduce demand first, then generate. Do it the other way around and you've sized and paid for a solar system to feed an inefficient home.

For a lot of Kiwi households, the single biggest line on the winter power bill is heating. Stats NZ household data and EECA's own research both point to heating and hot water as the largest chunk of residential electricity use. So if you only have one move to make this year, the move that shrinks that chunk usually returns more, faster.

The honest maths on a heat pump first

Let's use a real-ish scenario. Take a 1970s weatherboard place in Christchurch, three bedrooms, currently heated by a couple of plug-in oil column heaters and the odd blast of an old wall panel. Power bill spikes to maybe $380 a month across June, July and August.

Plug-in resistive heaters are 100% efficient, which sounds great until you realise that means one unit of power in, one unit of heat out. A modern heat pump delivers a Coefficient of Performance (COP) of around 3 to 4 in mild conditions, per EECA Gen Less figures. So for the same warmth, you're buying roughly a third of the electricity.

• Old heaters: say $900 of electricity across winter to heat the living areas.
• Heat pump: the same comfort for closer to $300, often less if you run it smartly.

That's a $600-ish winter saving on a $3,500 install, and you also get a warmer, drier home, which the Otago University He Kāinga Oranga housing research has linked directly to fewer respiratory illnesses and doctor visits. The payback is genuinely good and the health dividend is real, especially in colder, damper regions like Southland, the Manawatū and the West Coast.

Frosty Central Otago is the one caveat. Heat pump COP drops as it gets properly cold, so on a hard Alexandra morning at minus 5, that 3-to-4 ratio falls back toward 2. Still better than a plug-in heater, but size the unit properly and look at models rated for low ambient temperatures.

The honest maths on solar first

Now the same Christchurch house with $10k spent on solar instead. A fully installed 5kW system runs roughly $9,000 to $12,000 in 2025, around $1.70 to $2.00 per watt, per current installer pricing. We keep a running breakdown of what that per-watt figure looks like region by region over here: https://nzsolaris.co.nz/cost-per-watt-nz/

A 5kW system in Canterbury might generate somewhere around 6,500 to 7,500 kWh a year, using NIWA's solar irradiance data for the region as a guide. Sounds like a lot. But the savings depend entirely on how much of that power you use yourself versus export to the grid.

This is the bit the sales pitch skates over. You pay roughly 28 to 35 cents per kWh to buy power, but most retailers pay you only 7 to 17 cents per kWh to export your surplus. Self-consumed solar is worth two to four times more than exported solar. We pull apart the buy-back rates properly here: https://nzsolaris.co.nz/are-solar-panels-worth-it-nz/

So if that house is empty all day, with everyone at work and school, most of the solar generated at midday gets exported at the low rate. The system still pays back, but slowly. Heat the home inefficiently in the evening when the sun's gone, and solar does nothing for your single biggest cost.

The insight the installers don't volunteer: efficiency makes your solar smaller and lower-cost

Here's the genuinely useful bit, and it's why order matters so much.

When you install a heat pump before you size a solar system, you change the shape of your demand. A heat pump's load is far smaller and far more predictable than resistive heating. That means:

• You can often specify a smaller solar array for the same proportion of bill offset, because your home simply needs less power.
• Your self-consumption rate improves, because a heat pump runs at modest, steady wattage you can schedule into daylight hours, rather than a 2.4kW heater hammering the grid at 7pm.
• You avoid the classic trap of over-sizing an array to cover an inefficient house, then exporting the excess for peanuts.

Put plainly: every dollar you spend on efficiency first can let you spend fewer dollars on panels later, while getting the same result. The heat pump quietly makes the solar quote smaller. No installer is going to tell you to buy less of their product.

The smartest play of all: stack them and time the heat pump to the sun

Once you've got both, the real magic is running your heat pump during daylight, off your own panels. This is where the self-consumption maths flips in your favour.

On a sunny Canterbury or Hawke's Bay afternoon, your panels are producing free-to-you power that would otherwise export at 8 to 17 cents. Push that into the house as heat instead, and you're effectively storing warmth in the building's fabric for the evening. A well-insulated home with a heat pump cycled up in the afternoon stays comfortable well past sunset.

This is the single best reason to do the heat pump first and the solar second. You build the efficient demand, then feed it for free. Do it in reverse and your panels spend their best hours exporting cheaply while your heating bill stays exactly where it was.

What about a battery instead?

People often ask whether the second $10k should go on a battery rather than more panels. For a lot of homes, the honest answer is not yet. Batteries still add years to the payback for many households, and a heat pump scheduled to run in daylight is a far more cost-effective way to "store" your solar as heat than a lithium battery is to store it as electricity. We get into when a battery actually pencils out properly elsewhere, because it genuinely depends on your usage pattern and your retailer's rates.

Don't forget the lowest-cost win of all: insulation

Before either, if your ceiling or underfloor insulation is thin or missing, that's the highest-return dollar you can spend, full stop. EECA's Warmer Kiwi Homes programme has historically offered grants covering a large share of insulation costs for eligible households, and insulation makes both your heat pump and your solar work harder for you.

An uninsulated home is a bucket with holes in it. Heating it, however you generate the power, is pouring warmth out through the ceiling. Check whether you qualify for help through the EECA Warmer Kiwi Homes scheme before you spend a cent on anything else.

A simple decision order for most NZ homes

If you're starting from scratch with a typical, slightly tired Kiwi home, this order returns the most for your money:

• 1. Insulation and draught-stopping. Lowest cost, highest health and comfort return. Check Warmer Kiwi Homes eligibility first.
• 2. A correctly sized heat pump. Cuts your largest winter cost and makes everything downstream more efficient.
• 3. Solar, sized to your now-efficient home. Sized for daytime self-consumption, with the heat pump scheduled into sunny hours.
• 4. Hot water on a timer or diverter, then a battery if the numbers stack for you.

That said, this isn't a hard rule. There are homes where solar should genuinely go first, and we'll be straight about those.

When solar genuinely should come first

Reverse the order if your situation looks like this:

• You already heat efficiently. If you've got a good heat pump and a warm home, the efficiency gain is banked. Solar is your next logical move.
• You're home during the day. Retirees, shift workers, people working from home. High daytime occupancy means high self-consumption, which is exactly what makes solar pay back faster.
• You've got an EV or are about to. Daytime charging off your own panels is one of the strongest cases for solar in NZ right now, and it shifts the whole equation.
• You're on a punishing daytime tariff. If your retailer charges a premium for daytime power, offsetting it with solar is worth more than average.

The full picture on what tips solar from "nice idea" to "clearly worth it" is laid out properly here: https://nzsolaris.co.nz/are-solar-panels-worth-it-nz/

Where neither makes sense yet

Being honest about the limits is the whole point. Hold off, or think hard, if:

• You're renting. You can't bolt panels to a roof you don't own, though a portable heat pump or pushing your landlord on insulation under the Healthy Homes Standards is fair game.
• You're moving within a few years. Solar's payback typically runs well beyond a short ownership horizon, and you rarely recover the full cost in the sale price.
• Your roof is heavily shaded. A south-facing or shaded roof, common on Auckland's tighter two-storey sites with a neighbour's poplar in the way, can gut a solar system's output. A heat pump cares nothing for your roof aspect.
• Your power use is genuinely tiny. If your bill's already low because the house is empty most of the time, the savings on either may not justify the spend.

What a fair quote looks like, for both

When you're getting numbers, here's what good looks like.

Heat pump:

• A proper sizing calculation based on your room volume and insulation, not a guess off the floor area.
• A high-wall unit from a reputable brand installed for roughly $2,500 to $4,500 for a main living area.
• An installer who is a registered electrician and who'll talk you through running it on a timer to suit your sun, not just "set it to 21 and forget it".

Solar:

• A clear per-watt price in the $1.70 to $2.00 range for a standard install, with no vague "from" pricing.
• A generation estimate based on your actual roof and region, ideally referencing NIWA-style irradiance data, not a national average.
• An honest self-consumption assumption. If a quote assumes you'll use 60% of your generation but the house is empty all day, the payback figure is fiction.
• Warranty terms in writing, with the install workmanship warranty stated separately from the panel and inverter warranties.

The complete walk-through of costs, finance options and realistic payback for a NZ solar system lives here, and it's worth reading before you sign anything: https://nzsolaris.co.nz/the-true-cost-of-going-solar-in-nz-bills-finance-and-roi/

Paying for it without the upfront sting

You don't have to find $10k in the couch cushions. Several banks offer low-rate or interest-free green loans for both heat pumps and solar, and many councils run targeted rates schemes that let you spread the cost across your rates bill.

You can check what green finance you might qualify for using our quick tool here: https://nzsolaris.co.nz/green-finance-qualifier/

And if you've been burned by the collapse of the old solar subscription model and are wondering what replaced it, we've covered exactly what happened and what the sensible alternatives are now: https://nzsolaris.co.nz/solarzero-subscription-alternative/

Frequently Asked Questions

Is a heat pump cheaper to run than solar saves me?

In its first winter, a heat pump replacing plug-in resistive heaters usually delivers a bigger, faster saving than solar, because it cuts your largest cost at the source. EECA rates heat pumps as the most efficient electric heating, delivering 3 to 4 units of heat per unit of power. Solar saves more over its full 25-year life, but takes longer to get going.

Can I run my heat pump entirely off solar in winter?

Not reliably. Winter is when your heating demand peaks and your solar output bottoms out, especially in cloudier regions like Wellington and the West Coast. You'll offset some daytime heating with solar, but you'll still draw from the grid on cold, dull days and at night. Solar trims the bill; it doesn't zero it.

Should I get a bigger solar system so it covers my heating too?

Usually no. Over-sizing an array to cover inefficient heating means you generate a lot of midday surplus that exports at a low buy-back rate. It's far better to install an efficient heat pump first, then size the solar to your reduced, daytime-shiftable demand.

What if I'm out at work all day?

Then solar's self-consumption case weakens, because most of your generation exports cheaply while you're away. A heat pump on a timer, or hot water heating shifted into daylight, helps soak up that midday solar. If the house is empty all day, do the heat pump and insulation first.

Does my region change the answer?

Yes. In sunny, milder spots like Nelson, Hawke's Bay and Canterbury, solar performs well and a heat pump's COP stays high. In frosty Central Otago, heat pump efficiency dips on cold mornings, so size carefully. In cloudier places like the West Coast, the heat pump's value holds up better than solar's.

Is a battery a better second purchase than more panels?

For most homes right now, no. A heat pump scheduled to run in daylight is a more cost-effective way to use your solar than storing it in a battery. Batteries can still add years to payback depending on your usage and retailer rates, so run the numbers carefully before committing.

What about insulation, where does that fit?

First, always, if yours is thin or missing. EECA's Warmer Kiwi Homes programme has covered a large share of insulation costs for eligible households. Insulation makes both your heat pump and solar work harder, and it's the lowest-cost comfort and health gain you can buy.

Can I finance both without paying upfront?

Often, yes. Low-rate and interest-free green loans cover heat pumps and solar through several NZ banks, and some councils offer rates-based schemes to spread the cost. It's worth checking what you qualify for before assuming you need cash upfront.

The Bottom Line

For most Kiwi homes with $10k and a choice to make, the order is: get the home tight and warm, then put a heat pump in, then add solar sized to the efficient home you've created. You'll save sooner, live in a healthier house, and end up needing a smaller, lower-cost solar system than if you'd done it the other way around.

If your home's already warm and efficient, or you're home during the day, or there's an EV in your future, flip the order and look at solar first. The cleanest way to know which camp you're in is to see real numbers on your actual roof. When you're ready, get into the full cost and payback picture over here: https://nzsolaris.co.nz/the-true-cost-of-going-solar-in-nz-bills-finance-and-roi/