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Types Of Hot Water Systems

Did you know that a hot water system can make up almost 30% of an average Australian household’s total electricity bill? The hot water system you have installed right now could be costing you big time and it all comes down to what kind of hot water system you have. We have made things easy for you and compared electric, gas, solar and heat pump hot water systems to help you find the best and most cost-effective water heating solution for your home.

Hot water systems can either be a ‘storage’ design or a ‘continuous flow’ design. A storage hot water system heats and holds hot water in its tank until it is ready to use. While this provides instantaneous hot water, the system is limited by its storage capacity. On the other hand, a continuous hot water system swiftly heats up an unlimited amount of water when you need it. While it does take a few moments to heat up, an instantaneous system won’t waste energy by keeping water warm when no one is using it.

Types Of Hot Water Systems

Electric Water Heaters


Electric water systems heat water using an electric-powered element which sits at the base of the water tank, the element inside is coiled around the pipes to rapidly heat the water being held.


Electric water heaters provide a low up-front cost and are a dependable way of keeping your water warm. Newer systems can also be programmed to do the majority of the heating during off-peak periods as to help minimise your energy bill.


Electric water heaters are generally the most expensive long-term hot water solution. These systems also have a high emitting rate of greenhouse gas and are generally discouraged.

The cost of this hot water system can range from $200 to $2,000.

Gas Water Heaters

Gas Hot Water Systems

Gas water heaters that use the storage system, use a gas burner to continuously heat and maintain water in a tank at roughly sixty degrees celsius. On the other hand, gas water heaters that use the continuous flow systems also use a burner, but this only ignites when the water is needed.


Overall, gas hot water systems produce lower greenhouse gas emissions than that of an electric hot water system and depending on your location gas systems are usually considered to have lower usage rates compared to electricity, making them the most cost-effective option long term.


Gas hot water systems work at their optimum level only if you are connected to mains gas, this is because LPG bottles are more expensive and creates the risk of running out of hot water.

The cost of this hot water system can range from $800 to $1,900.

Solar Water Heaters

Solar Hot Water Systems


Solar hot water heaters use the storage design as they use the heat generated from the sun which is collected from the solar panels installed on the roof of the property. This energy is then used to warm and maintain the water in your tank. If there is inadequate solar generation, the system can be boosted to a temperature of 60°C by either electric or gas boosters.


Solar hot water systems have the capability of receding your household energy consumption by up to 90%. As hot water systems are infamously energy hungry, this can help with significant savings on your power bills, this system is also the most environmentally friendly option.


Solar hot water systems are the most expensive hot water system to install and can be unreliable and have to use boosters if there has been insufficient solar generation throughout the day. 

The cost of this hot water system can range from $2,000 to $8,000.

Heat Pump Water Heaters

Heat Water Pumps


Heat pump water heating systems use a fan that sucks warm air into the system, which is then moved to the water storage tank. Essentially this kind of hot water system is a reverse fridge, rather than working to push hot air out to keep your fridge cool, it pumps hot air in to heat the water up.


Heat pumps are one of the most energy efficient hot water solutions. While they need electricity to run, they are roughly three times more efficient than traditional electric water heaters.


Heat pumps are considered very unreliable and servicing costs are generally quite expensive. This system is also only suitable in warm environments and while some heat pumps do come with boosters, if the climate isn’t suitable, there is little benefit in spending the extra money on a heat pump. 

The cost of this hot water system can range from $2,500 to $4,000


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