General manager of Harvest Hot Water Erik Olbrei said many small businesses in the industry were not eligible to participate in the scheme by offering rebates to customers looking to install more efficient hot water heat pumps in their homes.

He said the smaller players in the industry were at risk of being priced out by the larger competitors who were part of the government scheme offering extra financial incentives.

"We have been going on for about five years, just limping along, and for the firms that don't get the rebates, it's hard to compete," Mr Olbrei said.

"Closing is what I'm looking at right now, basically putting the business in mothballs because at the moment it is just not viable.

"What I'm calling for is for the scheme to be opened up to all of the firms in the ACT."

Mr Olbrei said he had tried several times to get his business to be able to participate in the government scheme, without success.

Under the scheme, which was set up in the ACT in 2013, Canberrans are able to access rebates to switch over to more energy-efficient appliances, such as hot water heat pumps.

Government figures have shown hot water is the second biggest energy user in Canberra homes, with heat pumps using up to 80 per cent less energy than standard hot-water systems.

Since the introduction of the scheme, more than 45 per cent of ACT homes have taken part, saving on average $5.80 per week.

The scheme had a large review in 2018, which found it was effective in reaching a large amount of ACT households.

While Mr Olbrei said the scheme was good in getting Canberra homes to produce less carbon emissions, it favoured larger players in the industry.

"If we had access to the full lot of rebates, the prices for the hot water heat pump models could also be driven down," he said.

"That way, the market could work to drive down prices and make a hot water heat pump replacement more appealing and also have better value."

It's a similar situation being felt by Pure Electric, which also sells hot water heat pumps to customers, but is not eligible to offer rebates to customers.

"It's a really badly thought out and badly implemented scheme," its director Matthew Wright said.

"It favours only a couple of providers that have the monopoly in the industry, unlike similar schemes in other states which are open to more players.

"It's still a very closed sort of thing."

ACT Energy and Emissions Reduction Minister Shane Rattenbury said the choice of installers under the scheme was a commercial decision by ActewAGL.

"The Independent Competition and Regulatory Commission undertakes independent analysis of ActewAGL's processes in undertaking [the scheme's] activities," Mr Rattenbury said.

"The performance of the scheme is regularly evaluated.

"As a tier one regulated retailer under the scheme, ActewAGL is obligated to undertake energy saving activities in households and small-medium businesses. The rebates and discounts offered to customers are a commercial decision by ActewAGL."

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