What are the pros and cons of different hot water systems?

Having hot water in your home or business really is a big aspect we all take for granted, especially stepping into a warm shower or bath after a long day. But, have you ever really considered how your hot water system works, what it does and how it functions all year round?

Hot Water

Granted it likely isn’t something you’d speak about with your friends at a dinner party, but it is an important aspect to consider especially if you are looking to upgrade or replace your current system. We have therefore put together some information regarding the different kinds of hot water system, their advantages, disadvantages and brands which manufacture each kind of system. If you have any questions regarding anything in this article, give Fallon Solutions a call on 1300 054 488.

A few hot water facts

According to the Australian Government:

  • Water heating is the largest source of greenhouse gas emissions from the average Australian home.
  • Water heating uses the second-largest amount of energy in households, behind space heating and cooling.
  • Water heating accounts for about 21-25% of energy used in the home but generates about 23% of the greenhouse gas emissions.
  • Around 50% of Australians use electric water heaters, but this contributes to around 80% of hot water greenhouse gas emissions.
  • Around 50% of the water used in the home is used in the bathroom, around 1/3 in the laundry and then the remainder is used in the kitchen.
  • Electric storage hot water heaters are the most commonly chosen systems in Australia.

Types of hot water systems

There are two main types of hot water heaters:

  • Storage systems: Store hot water in an insulated tank until needed.
  • Continuous Flow systems: Otherwise known as instantaneous systems, which heat hot water as and when needed.
Hot Water

Storage Systems


  • Common choice, especially for electric hot water.
  • Usually come with 5-10 year warranties.
  • Usually contain 1-2 sacrificial anodes, which draw away nasties that corrode tanks.
  • Stainless steel tanks last for a long time and require little maintenance.


  • Mild-steel storage tanks can corrode, however regular maintenance can address this.
  • Heat loss over time, so always install in a sunny area where possible.
  • Local water quality can decide which tank is best – you may not have to!
  • Stainless steel tanks are expensive.

Continuous Flow Systems


  • Cheaper to run than storage systems.
  • No heat is lost like in storage tanks.
  • Water is heated as needed, so do not run out.
  • Only heat the amount of water that is going to be used.


  • Not actually instantaneous – take a few moments for the water to heat up.
  • Electric models use the full electricity tariff whenever they are in use, so running costs may be higher than for an off-peak tank, but less than a continuous tank system.
  • Continuous flow water heaters may not turn on because of a combination of low flow shower heads and too high a trigger point for the hot water heater to start up.

These systems can be powered by a few different types of energy sources, otherwise known as services.

Types of Hot Water Service

There are 4 main hot water service types available in Australia:

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Advantages and Disadvantages of Different Hot Water Systems

So, now we’ve covered the different types of systems, what are their benefits (and deficits)? It is worth noting that each option is suitable for different needs, so if you are unsure, it is best to speak to your local hot water specialist.

Electric Hot Water


  • Low upfront costs, including purchase and installation.
  • Easy to install.
  • Reliable.
  • Heat in off-peak times is more cost-effective.
  • Can install either inside or outside, as do not require a flue.


  • Generally expensive long-term.
  • Higher greenhouse gas emissions if not powered by a renewable energy source.
  • If run on off-peak timing, a larger tank is required in order to store water for a whole day’s worth of usage.

Solar Hot Water


  • Can reduce your hot water system’s energy consumption by up to 90%.
  • Very environmentally friendly.
  • May be available for rebates or other government incentives.
  • Will pay for itself in time, due to low running costs.
  • Booster options are available to assist on overcast days.


  • Large upfront costs.
  • Can be unreliable on overcast days.
  • Time-consuming to install.
Solar Hot Water

Gas Hot Water


  • Cheap to run if you already have the connection (cheaper than electricity!).
  • Gas rates do not vary throughout the day.
  • More cost-effective than other options.
  • Energy-efficient.
  • Fewer greenhouse gas emissions.


  • LPG costs can be quite higher, especially compared to natural gas.
  • Electric ignition, although more economical, means no hot water in a blackout.
  • Only really viable if already connected to mains gas.
  • Must be located outside or if inside, must have a flue.

Heat Pump Hot Water


  • Much more efficient electric option.
  • Government rebates and incentives may be offered.
  • One of the most energy-efficient options available.
  • Booster options are available to assist on cold days or high demand times.


  • Usually installed outside, as need a well ventilated area.
  • The compressor can be noisy.
  • Only suitable in warm climates.
  • Can be unreliable.
  • High servicing costs.
Hot Water Shower

Hot Water System Brands

There are a huge array of brands that produce all different hot water system types. They include:

Rheem Hot Water: Known for electric storage hot water, however, they also manufacture gas, heat pumps and instantaneous systems.

Aquamax Hot Water: Gas, electric and solar hot water system providers.

Bosch Hot Water: Provide instantaneous gas hot water heaters.

Rinnai Hot Water: Known for gas (including instantaneous), electric and solar hot water systems.

Thermann Hot Water: Known for electric, gas, continuous flow, and heat pump systems.

Thermasol Hot Water: Electric hot water providers.

Vulcan Hot Water: Known for gas and electric hot water systems.

Quantum Hot Water: Provide renewable hot water systems using heat pumps.

Apricus Hot Water: Solar hot water provider.

Fallon Solutions

Your knowledgeable hot water specialists

If you have any questions regarding hot water systems or their components, or would like to speak to one of our friendly team members regarding any of the extensive hot water services that Fallon Solutions provide, give us a call today on 1300 762 260 . We have years of industry experience with hot water units, so get in contact now


Energy Rating (Water Heating): http://www.energyrating.gov.au/products/water-heaters

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

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

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