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Australians rely on their hot water service every day, but in reality, not many of us really understand how they work. When it comes time to invest in a brand new hot water system, it’s easy to get confused between electric, gas, solar and heat pump options.
If you’re currently struggling to understand the difference, we’re here to help! At PlumbCall, we’ve installed and serviced all of the most common hot water units on the market today. Today, we’re going to share our insights and, hopefully, help you make an informed decision.
Keep reading for our comprehensive guide to electric, gas, solar, and heat pump hot water systems.
If you’ve already decided to invest in a new system, feel free to skip to the section below! Otherwise, here are some of the key signs you might need to ditch your current system and get a replacement.
Another key sign is the age of your system. While lifespan will vary from brand to brand, older systems should be serviced by a licensed hot water plumber. At this point, your plumber will be able to assess the condition of the system and, where appropriate, recommend that you get it replaced.
If you’re looking for a more eco-friendly option, this is also a great reason to make the switch and explore the different options available to you,
For more info, make sure to check out our recent blog ‘Why Is My Hot Water Service Not Working Properly? Key Issues and Solutions’.
These hot water systems use electric heating elements inside a storage tank to heat water. From here, the water is stored and kept hot until needed. The system then either operates on a continuous rate (heating water throughout the day) or an off-peak rate (heating water during low-demand times, typically overnight).
Instantaneous electric water heaters are also available, but they generally supply hot water to only one outlet at a time.
Of the various options available, electric systems are typically the cheapest to purchase and install. This has made them a popular choice for many property owners, particularly anyone looking to go gas-free. However, they can sometimes be more expensive to run if they operate on a continuous rate.
Properties with off-peak electricity, however, may be able to make savings on running costs. In this case, these electric systems will require a larger tank to make sure enough hot water is available throughout the day.
Flexible installation is another advantage of electric systems, as they can be placed both indoors or outdoors.
According to figures released by Canstar Blue, the average cost for electric hot water service installation in 2023 was between $1,000 to $1,700. Installation is generally straightforward and takes about two to three hours for a replacement. Of course, make sure to get a quote from your plumber to make sure it aligns with your budget!
Running costs will depend on the efficiency of each make and model. Systems with a higher star rating, for example, are less expensive to run and will ultimately be more friendly to your pocket, whereas less efficient systems may be cheaper upfront, but more expensive in the long run.
Rheem, Rinnai, Aquamax, Dux
Gas hot water systems use natural gas or liquid petroleum gas (LPG) to heat water. They are available in two main types: storage tank systems and instantaneous (continuous flow) systems. Storage tank systems heat and store water, while continuous flow systems heat water on demand.
Gas systems can be more cost-effective than electric systems due to the lower cost of gas and the consistent heating provided throughout the day.
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Natural gas systems are generally more economical than electric systems, but they require a gas connection. However, because they rely on a fossil fuel resource, gas systems emit more greenhouse gas emissions and are therefore less eco-friendly.
LPG systems are a viable alternative for properties without a gas connection, though they are typically more expensive to operate and have some of the highest annual rates of any hot water service option. Gas systems typically need to be installed outdoors due to venting requirements, but indoor installation is possible with a flue.
While gas systems are efficient, it’s important to consider their long-term viability, as gas prices may rise in the future, and environmental concerns may make gas a less favourable option over time.
The price of gas hot water units will vary quite a lot depending on the specific type, brand, and model you select. However, we can provide some estimates based on recent industry figures. For a storage based system, you’re looking at installation costs within a ballpark range of $1830 to $3000, and a cost of $735 – $1,575 for an instantaneous/continuous flow system.
Much like the requirements for an electric system, installation typically takes no more than two to three hours for a straightforward replacement.
Vulcan, Rheem, Rinnai, Aquamax
Using the natural power of ultraviolet rays, these hot water systems involve interconnected solar collector panels and a storage tank. The panels absorb sunlight to heat the water, which is then stored in the tank.
These systems often come with an electric or gas booster to ensure hot water is available on cloudy days or during periods of high demand. Solar systems are designed for long-term savings, as they rely primarily on free solar energy.
Solar systems are environmentally friendly and offer low running costs over time. However, the initial purchase and installation costs can be high. The efficiency of the system also depends on the placement of the solar panels, with optimal performance achieved when the panels are installed in locations that receive ample sunlight.
The system also requires a large storage tank to account for days with less sunshine. We should note that government rebates and incentives (such as Victoria’s Save with Solar program) can help to offset upfront costs, making them a more viable long-term investment for your home or business.
Getting a solar hot water system installed will typically cost between $3000 and $7000. The installation process can be time-consuming and usually requires a day or less to complete, depending on the complexity of the setup.
Low running costs are a major advantage of a solar setup. Let’s use the graph below to illustrate this in action. In this graph, we can see that both solar boosted gas and solar boosted electric systems had the lowest average annual energy costs in 2023–even for households with four people.
Rheem, Splitline, iHeat
Heat pump hot water systems work by extracting heat from the air and using it to heat water. The system essentially operates like a reverse refrigerator, where the refrigerant absorbs heat from the surrounding air and transfers it to the water in the storage tank.
Heat pumps are highly energy-efficient, often using only 30% of the energy required by conventional electric systems. They are especially effective in warmer climates but can include an electric booster element for colder conditions.
Heat pump systems are more expensive upfront compared to traditional electric or gas systems, but their energy efficiency leads to lower running costs over time. They are particularly cost-effective when paired with solar panels, as they can be powered by your own solar-generated electricity.
Installation usually takes place outdoors due to ventilation needs, and the compressor can be noisy, so it’s important to consider placement away from living areas or neighbouring properties. Heat pumps perform best in warmer climates, but models designed for colder regions are available, often with a booster element for added reliability.
Heat pump hot water systems typically cost between $2000 and $7600 for installation, not including installation. Installation usually takes two to three hours for a straightforward replacement. Government rebates can also help reduce the overall cost, making heat pumps a more attractive option for long-term savings.
Chromagenm, Stiebel, Rinnai, Haier
Now that we’ve covered each type, let’s quickly recap. Here’s a quick comparison of these four different hot water systems.
Pros: Cheapest to purchase and install, flexible installation, options for off-peak savings.
Cons: Higher running costs if not on off-peak rates, less eco-friendly.
Cost: $1,000 to $1,700 (installation)
Pros: More cost-effective than electric, continuous heating, works in all weather.
Cons: Requires gas connection, emits more greenhouse gases, potential future cost increases.
Cost: $735 to $1,575 (installation)
Pros: Environmentally friendly, low running costs, government rebates available.
Cons: High upfront cost, performance depends on sunlight, requires a larger tank.
Cost: $3,000 to $7,000 (installation)
Pros: Highly energy-efficient, low running costs, ideal for pairing with solar panels.
Cons: Expensive upfront, performance varies with climate, can be noisy.
Cost: $2,000 to $7,600 (installation)
Please note that the prices outlined are only estimates and will depend on your individual circumstances, so make sure to check with your local PlumbCall service provider for accurate quotes.
Whether you need a new hot water service in Darwin, Bendigo or Bundaberg, we have licensed plumbers available across various different regions of Australia. Our team can repair and install every type of hot water system, and will always provide a high standard of workmanship.
Our services also come with money back guarantees, excellent customer service, and competitive quotes for installation. Don’t put your hot water needs off any longer–reach out to your local PlumbCall team for expert assistance!
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