Local hot water manufacturing at risk over ‘unfair’ energy scheme

Taxpayer-funded incentives have caused an invasion of cheap, low-quality heat pumps from overseas. Australian-made hot water companies have called on politicians to stand up for local jobs.

The future of one of the country’s last surviving Australian-made industries remains in limbo due to a taxpayer-funded invasion of foreign-made green energy products, experts claim.

Representatives from hot water brands Rheem, Dux and Rinnai, which employ a combined 1700 local workers, warn lucrative heat pump discounts have created an unfair playing field against their overseas rivals.

The companies also said they had significant capacity to ramp up production and supply of heat pumps if the major government schemes had been designed to prioritise local manufacturing.

Instead, multiple incentives resulted in an open market for thousands of cheap, imported units to be installed for free.

The NSW discounts were scaled back last year after reports of false advertising, unlicensed workers and aggressive sales tactics. However, new heat pump systems are still allowed to sell for as little as $200, a price local companies say is simply impossible to match.

Tee Nget and Mohammed Assaad working on the heat pump water heater production line at Rheem Australia in Rydalmere. Picture: Justin Lloyd

Rheem chief executive Chris Taylor told The Daily Telegraph: “If governments are going to give taxpayer dollars away, we think they should be prioritising local manufacturers and Aussie workers.”

“Australia is fortunate to have three major players who manufacture water heaters locally. We’ve got this covered as a country.”

Rebecca Aitu working at Rheem Australia. Picture: Justin Lloyd

On Thursday this masthead toured Rheem’s factory at Rydalmere in Sydney’s west, which has been operating for more than 70 years. The company’s hot water units are crafted on site using BlueScope Steel and a meticulous safety and inspection process.

Long-time employee Mohammed Assaad said workers’ jobs were “very important”.

“Our workers love this country. We have to look after Australian manufacturing,” he said.

“To the government, please, keep our jobs here. Stop bringing these hundred-dollar heaters from overseas that won’t last for two years.”

The heat pump water heater production line at Rheem Australia. Picture: Justin Lloyd

Rheem is one of three major players in hot water production in Australia. Picture: Justin Lloyd.

The Australian Manufacturing Workers’ Union has also warned it remains “extremely concerned” about the quality of foreign-made hot water systems and heat pumps.

“The goods we are seeing are often non-compliant with Australian safety and quality standards,” AMWU NSW secretary Brad Pidgeon told this masthead.

“Taxpayer dollars should be going towards our world-class goods and supporting our local economies and jobs.”

Attempts to raise the alarm about issues in the hot water industry appear to have fallen on deaf ears.

In December, Dux chief executive Simon Terry wrote a letter to the Commonwealth Government saying: “Our concern is low-quality heat pumps pose significant risks not only to product reputation and energy efficiency, but also to high-value Australian manufacturing jobs in the renewable energy industry”.

“In Dux’s case, these are regional jobs, which are critically important to the NSW Southern Highlands and South Coast, so we intend to fight tooth and nail to protect them.”

This masthead has revealed spot-checks by the NSW Building Commission discovered heat pump compliance rates of just 9 per cent.

More than 400,000 discounted heat pumps have been installed across Australia over the past five years, as part of an urgent push to have consumers replace electric and gas units with energy-efficient devices.

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Originally published as Local hot water manufacturing at risk over ‘unfair’ energy scheme