Replacing a gas water heater with a heat pump: what changes at home

Gas water heater, electric water heater or heat pump

Anyone looking into this switch is almost always comparing three appliances. All three give you hot water for showers and the kitchen, but they do it in very different ways, and that changes what the house needs to have.

In practice, an electric water heater is the simplest swap, but it uses about three times as much electricity as a heat pump to heat the same water. For a family that showers every day, that difference turns up on every bill. A heat pump needs more space and a little more work. That is why it pays to plan the switch, rather than decide in a hurry on the day the gas heater breaks down.

Why so many Algarve homes are making this switch

Many homes in the Algarve are not connected to a natural gas network. They heat their water with butane or propane bottles, or with piped propane. Switching to a heat pump means no more carrying gas bottles, no more naked flame inside the house and no more relying on a flue that always has to work properly.

The climate helps. A heat pump performs better the milder the air it takes its heat from, and Algarve winters are among the mildest in Portugal. In homes with solar PV panels, the heat pump can run during the sunny hours and heat the water with electricity the house produces itself.

Then there are holiday homes and rentals. With timer programming, the water is hot for the time the guests arrive, and the house uses no energy in the weeks it stands empty.

Four questions we ask on the technical visit

1. Where does the tank go?

In most homes a hot water heat pump is a floor-standing tank almost as tall as a person, and when full it easily weighs more than 300 kg. It rarely fits where the gas heater was. The usual places are the utility room, the garage, a large pantry or a covered outdoor store. The floor has to take the weight, and there has to be space left around it for servicing.

The distance to the bathrooms matters too. The further away the tank is, the longer cold water runs before the hot arrives. In large villas we solve this with hot water recirculation, which we explain in our guide why hot water takes so long to arrive (in Portuguese).

2. Where does the air come from?

The unit draws in air, takes the heat out of it and returns it colder and drier. In a garage or a utility room, that is quite welcome in summer. In a small, closed pantry, the air cools quickly and efficiency drops. Each manufacturer states a minimum room volume; below that, we connect the unit to the outside with two air ducts, one to draw air in and one to expel it.

If the home is in an apartment building and the ducts have to go through the façade, speak to the condominium administration (administração do condomínio) first.

3. How many people live in the house?

That is what decides the size of the tank. We explain how to choose in the next section.

4. Can the electrical installation cope?

The heat pump needs its own circuit on the consumer unit (quadro elétrico). It is also worth checking your contracted power (potência contratada), especially if the backup element can come on at the same time as the oven or the hob. The circuit is a job for the electrician; on the visit we tell you what needs to be ready.

What size of tank to choose

As a rule of thumb, allow 40 to 50 litres of hot water per person per day. The table shows the sizes we install most often for each household.

A starting point for the conversation on the technical visit. The final size depends on how the household uses hot water, not just on the number of people.

If in doubt, go one size up. Unlike a gas water heater, a heat pump takes a few hours to reheat the whole tank. If the whole family showers at the same time, what counts is the stored water, not the power of the unit.

Every model has a backup electric element for days when the house is full. If that element is coming on every day, the tank is too small. For a rental property, size it for maximum occupancy, not for the average over the year.

What happens to the gas

Disconnecting the gas water heater and closing off the gas pipe is an alteration to the gas installation. Decree-Law no. 97/2017 (Decreto-Lei n.º 97/2017) reserves this type of work for credentialed gas installation companies (entidades instaladoras de gás credenciadas). The technician closes and caps the point where the water heater was and checks that the rest of the installation is left safe.

iStarTec does not do gas work. That step is carried out by the credentialed gas technician before we remove the old heater and install the tank.

After the switch:

• If the water heater was your only gas appliance, you can stop buying gas bottles or end your gas contract.
• If you keep a gas cooker, the gas installation stays live and is still subject to the gas regulations.
• The opening for the old heater's flue can be closed up by the builder or, in some cases, reused for one of the heat pump's air ducts.

How the installation goes

1. Technical visit. We look at the gas heater, the location for the tank, the consumer unit, the water pressure and the route for the pipework.
2. Quote. Free and detailed, with a reply within 24 working hours.
3. Gas closed off, by the credentialed gas technician.
4. Pipework. We remove the old heater and run the cold and hot water to the new tank location.
5. Tank installation with a safety valve group, an expansion vessel and, if the mains pressure is high, a pressure-reducing valve.
6. Drainage for the safety valve group and the condensate, plus air ducts if the room is small.
7. Commissioning. Filling, bleeding the air, and setting the timers, the temperature and the anti-legionella cycle. Before we leave, we show you how it works.

The water is only off during the final connections. How long the job takes depends mainly on the distance between the old water heater and the new tank location.

How to spend less running a heat pump

• Programme the heating hours. On a two-rate (bi-horária) electricity tariff, heat during the off-peak hours (horas de vazio). With solar PV panels, heat during the sunny hours.
• Only use the backup element when you need it, for example when the house is full.
• Keep the anti-legionella cycle switched on. The World Health Organization says legionella bacteria live and grow in water between 20 and 50 °C, and recommends that water leaves the heating unit at 60 °C or above. In a holiday home that stays shut for weeks, this cycle matters even more.
• Switch on holiday mode when the house is empty, and programme it for your return.
• Insulate the hot water pipes that run through garages, store rooms or unheated areas.
• Have it serviced once a year. Algarve water is hard: limescale builds up in the tank, and the magnesium anode, which protects the tank against corrosion, gradually wears away. Checking the anode, the air filter and the condensate drain keeps efficiency up and extends the life of the equipment.

What about government grants?

The E-Lar programme, run by the Fundo Ambiental (Portugal's Environmental Fund), supported replacing gas appliances with electric ones, but left heat pumps out: it covered hobs, ovens and electric water heaters. The 2nd phase is closed to new applications. If you already have an approved voucher (vale), check the deadlines on the Fundo Ambiental website, because payment requests have a cut-off date (30 November 2026).

Grants change often. When a programme opens that applies to your switch, we provide the technical paperwork you need: a detailed quote, the equipment data sheet and an itemised invoice.

When a heat pump is not the best choice

• Apartments with no room for a floor-standing tank. A smaller wall-mounted model, or an electric water heater, may be the only option.
• One person with low hot water use. The savings on the bill take longer to pay back the work.
• Villas with a good south-facing roof. Solar thermal, with the heat pump as backup, heats most of the water with the sun. We compared the two options in heat pump vs solar thermal for domestic hot water (in Portuguese).
• Homes where you also want heating. An air-to-water heat pump can heat the house, for example through underfloor heating, and the domestic hot water with the same machine.

On the visit we tell you which of these cases applies to your home. If a hot water heat pump is not the right answer, we tell you that too.