Commercial Heat Pump: A Game-Changer for Energy Costs 

Heat without the gas

Commercial and industrial businesses have long relied on natural gas or LPG for heating, hot water, and process heat. But rising gas prices and the push to decarbonise mean it’s time to evaluate alternatives. One of the most promising is the commercial heat pump — a technology that uses electricity to move heat rather than burn fuel. 

What is a heat pump in a commercial sense?

At its core, a heat pump is like a reverse refrigerator. Instead of cooling a space by extracting heat, it extracts heat from the air, water, or ground and upgrades it to a higher temperature for use. 

For businesses, this means you can generate hot water, steam (in some cases), or process heat using electricity rather than burning gas. 

Key features for commercial/industrial heat pumps: 

• Temperature range: Many commercial units can provide water at 60–90°C, with some advanced models reaching 120°C, suitable for a wide range of industrial processes. 

• Efficiency: Heat pumps can achieve a Coefficient of Performance (COP) of 2–4 (i.e. 200–400% efficiency). That means for every unit of electricity used, two to four units of heat are delivered. 

• Scalability: Units can be designed for anything from large office buildings and hospitals, to industrial plants requiring significant thermal loads.

Why are commercial heat pumps a viable investment for businesses?

1. Lower operating costs 
When paired with competitive electricity contracts — especially from renewables — heat pumps can significantly reduce energy costs. Because they use less input energy than direct electric heaters, the long-term savings can be substantial. 

2. Reduced exposure to volatile gas markets 
Gas prices have become unpredictable, with global shocks driving local costs higher. Heat pumps hedge your business against that volatility by shifting demand to electricity. 

3. Decarbonisation benefits 
Electricity grids are decarbonising rapidly. By electrifying heat loads, businesses can lower their Scope 1 emissions, improve ESG ratings, and get ahead of tightening environmental regulations. 

4. Future-proofing 
Investing in heat pump technology now helps ensure your energy infrastructure aligns with future carbon pricing, emissions caps, or energy efficiency standards. 

5. Integration with renewables 
Heat pumps can run on renewable electricity — either sourced from the grid via Power Purchase Agreements (PPAs) or from on-site solar/battery systems. They also enable demand flexibility strategies, letting you shift loads to off-peak periods.

Who should be considering heat pumps?

Heat pumps aren’t a one-size-fits-all solution, but they make strong sense in several sectors: 

• Food & Beverage Manufacturing 
  Hot water and process heating are central to breweries, dairies, abattoirs, and commercial kitchens. 

• Hospitals & Aged Care 
  Hot water demand is high and constant — heat pumps can dramatically reduce operating costs. 

• Commercial Property 
  Hotels, office towers, shopping centres, and leisure facilities with high hot water or HVAC loads. 

• Industrial Process Heat (mid-temperature) 
  Sites that use gas boilers for heating water up to ~120°C, such as pharmaceuticals, textiles, or paper.

What to consider before investing

Heat pumps are not without challenges. Businesses need to factor in: 

• Upfront capital costs (higher than gas boilers, but offset by lower running costs and grants/incentives). 

• Electrical infrastructure upgrades (transformers, switchboards). 

• Space and noise requirements (large units need external siting). 

• Technical limits — some very high-temperature or specialised processes may not suit heat pumps. 

This is why feasibility studies (like those supported by the NSW Heat Pump Feasibility Grant) are valuable. They de-risk the transition by mapping costs, constraints, and payback periods.

Conclusion: A strategic opportunity

Heat pumps are no longer niche — they are a proven, commercially viable technology that helps businesses lower energy costs, cut emissions, and future-proof their operations. 

If your business spends heavily on gas for heating or hot water, now is the time to ask: Could a heat pump work for us?

Want to know if a heat pump could work for your business?

Engage with one of our energy consultants today to discuss your site’s gas use, eligibility for grants, and the potential business case for switching.

At Leading Edge Energy, we work with commercial and industrial energy users every day to cut costs, reduce risk, and build sustainable energy strategies.