How much does a hot water system cost?

Understanding Hot Water System Running Costs

We understand that hot water is crucial to keeping a household comfortable. If you’re noticing your hot water isn’t as warm as you’d like, it might be time to consider upgrading your hot water system. Fallon Solutions are experts in gas and electric hot water systems and with over 60 years of experience, we’re your local specialists. Whether you need supply and installation, repairs, replacements, or servicing, we’ve got you covered. Our team is skilled in all major hot water heater brands.

We are available 24/7 for hot water emergencies in the Greater Brisbane area.

Call now on 1300 054 488 – We Can Be There Today! Financing options are also available.

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Hot Water System Costs

When calculating the potential costs of a hot water system, you need to consider several key items. From purchase pricing to installation fees and running costs, let’s break it down.

Hot Water System Styles

To begin, let’s take a look at the different types of hot water systems, as well as the varying kinds of hot water service… confusing we know, but it will (hopefully) make a little more sense after we have finished.

There are two basic types of hot water units:

• Storage: Storage systems store heated water in an insulated tank until the water is needed.
• Instantaneous: An instantaneous heater, also called a continuous flow system, heats water as and when it is needed.

After considering types, you have to consider the hot water service:

• Electric: Offered in both storage and instantaneous systems.
• Gas: Available in both storage and continuous flow systems, for either LPG or natural gas.
• Solar: Offered in either electric boosted or gas (LPG or natural) boosted.
• Heat Pump: operates by extracting the warmth in the outside air to a heat exchange system that then heats the water.

Hot Water System Cost Breakdown

Now we know all the hot water system types and services, it’s time to turn to cost. There are a few different costs to consider, including:

1. Purchase price.
2. Installation cost.
3. Ongoing energy bills.
4. Ongoing maintenance and servicing.
5. Any applicable electricity tariffs.
6. Any available rebates or incentives.
7. Costs of any additional system parts.

Initial Costs for Each Style of Hot Water System

So, let’s look at the upfront costs of hot water systems. It’s important to note that purchase prices for hot water systems in Australia vary significantly based on make, model, capacity and features. The below cost indications are a guide only and do not include installation fees. Installation costs can vary depending on the provider of the service – speak to your local hot water professional regarding how much installation will be for your preferred hot water system. These prices are average to the Australian market in 2024-2025.

• Electric hot water systems usually cost around $450 – $2,500 and are the cheapest option to purchase.
• Gas hot water systems sit in the middle of the initial costing scale, ranging in price from around $750 to $2,000.
• Heat pump hot water systems are a little more on the expensive side, generally costing around $2,500 to $t,000 and being the more costly electric option.
• Solar hot water heaters are the most expensive choice when it comes to upfront financial contributions, costing between $3,600 – $7,000.00+ depending on a range of factors (ie. energy usage, household size, number of panels required etc.)

Hot Water Running Costs

When it comes to running costs, this can be a little tricky depending on the type of hot water system you have, its size and whether you have any rebates or incentives. The following image gives a pretty good representation though.

As can be seen, electric storage is the most expensive system when it comes to ongoing costs, followed by off-peak electric storage and solar (gas-boosted – LPG). The cheapest is the solar system (gas-boosted natural gas), but solar (electric-boosted) and heat pumps aren’t too far behind.

Environmental Costs

When it comes to costs, it isn’t just financial that we need to consider. There is also the environmental impact that hot water systems have, with some systems being kinder to the environment than others.

Electric storage systems emit the largest amounts of CO₂ into the air each year, followed by gas storage systems (both 3 and 5 star). The best option for the environment is a gas-boosted solar hot water system, followed by an electric heat pump arrangement and a solar-electric-boosted system.

How Can I Reduce Hot Water Running Costs?

There are a few ways in which you can reduce your costs when it comes to hot water:

1. Choose an energy-efficient hot water system – solar is the most energy efficient.
2. Fix any leaking or dripping faucets or fixtures as soon as possible.
3. Limit your shower length.
4. Install a low-flow shower head.
5. If and where possible, allow your washing machine to use cold water only to wash your clothes.

Hot Water System Sizing:

Need help deciding what size hot water system is best for your home or business? Use our helpful calculator for an informed recommendation.

Resources:

Fallon Solutions (Hot Water Systems – pros & cons): Hot water systems comparison

Energy Rating (Electric Water Heaters): https://www.energyrating.gov.au/industry-information/products/electric-water-heaters

Energy Rating (Gas Water Heaters): https://www.energyrating.gov.au/industry-information/products/gas-water-heaters

Australian Government – YourHome (Hot Water Service): http://www.yourhome.gov.au/energy/hot-water-service

Sustainability Victoria (Choose the right hot water system): https://www.sustainability.vic.gov.au/energy-efficiency-and-reducing-emissions/save-energy-in-the-home/water-heating/choose-the-right-hot-water-system

Sustainability Victoria (Compare water heating running costs): https://www.sustainability.vic.gov.au/energy-efficiency-and-reducing-emissions/save-energy-in-the-home/water-heating/calculate-water-heating-running-costs

Canstar Blue (Hot Water Systems Compared): https://www.canstarblue.com.au/hot-water-systems/

CHOICE (How to buy the best hot water system): https://www.choice.com.au/home-improvement/water/hot-water-systems/buying-guides/hot-water-systems

The information contained on this page should be used as a guide only, and should not be read in isolation. Please ensure you complete your own extensive research regarding the costs associated with hot water systems, including consulting with a professional, to ensure you purchase the best system for your needs.

Terms and Conditions

• This offer is valid for domestic customers only.
• While this offer cannot be combined with any other offer, it can be used in conjunction with a 15% Home Protection Plan member discount.
• This offer does not apply to travel fees.
• This offer is applicable during normal business hours, not after-hours call-outs.
• The homeowner must be present during the hot water system replacement.
• Not applicable for under sink hot water purchases