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Choosing the right hot water system for you: [Fuel, Type, Size, Cost]


Trying to find a new hot water system that meets your needs? Available fuel sources are:

Runs through the night into the early morning hours. Sometimes, with off-peak electricity, there is a second boost during the day. This is a relatively cheap way to run your hot water system. As a hot water specialist, I believe off-peak electricity is the cheapest and simplest way of heating water. However, it is not so good for the environment.

This is expensive to run. My professional opinion is to avoid this fuel source at all costs. Though in some circumstances this is unable to be done. Also it is not so good for the environment. My recommendation would be to consider solar or heat pumps if continuous electricity is the only available fuel source.

Researching gas hot water systems? Some benefits include being relatively cheap and very good for the environment. If you are considering going to natural gas from another fuel source, please consider a few things.

  1. If natural gas is available in the street and;
  2. How long will it take to put the gas on?

Avoid at all costs. This is very expensive and not so good for the environment. In cases where LPG is the only fuel source available, I usually recommend a heat pump.

Size & Type

How large and what type of hot water system do you want to install?

If you are considering an electric hot water system, do you want a small or large tank?

Smaller tanks (25-160 Litre capacity) tend to run on “continuous power electricity”.

Larger tanks (250-400 Litre capacity) tend to run on “off peak 1” or “off peak 2” power. Off-peak 1 is turned on from 11 PM and 7 AM approximately. Whereas “off peak 2” is turned on between 11 PM-7 AM and has an additional boost from approximately 1 PM-4 PM.

When looking into electric ones, one must consider that off-peak 2 is slightly more expensive.

This type of electric hot water system is expensive to run. My professional opinion is to avoid this fuel source at all costs. However, in some circumstances, this is unable to be done. Also, it is not so good for the environment. I recommend considering solar or heat pumps if continuous electricity is the only available fuel source.

Gas storage systems are expensive to run. My professional opinion is to avoid this fuel source at all costs. However, in some circumstances, this is unable to be done. Also, it is not so good for the environment. I recommend considering solar or heat pumps instead of gas hot water systems if continuous electricity is the only available fuel source.

These electric hot water systems have poor flow rates and are expensive to run. I would normally suggest electric instantaneous water heaters unless you already have an existing one. In these cases, I usually recommend the Stiebel Eltron DHF 15 for Sydney customers, which delivers 4.5 litres per minute.

A continuous flow system is efficient and have 5-6 star gas efficiency. Additionally, gas continuous flow, or instantaneous, have reasonably good flow rates. Though for larger houses, I normally suggest a product that has 5 star gas efficiency. Keep in mind these systems have a lot of components. Unfortunately this means there are more things that can go wrong, making it very difficult to fix if they break down.

They range in capacity size from 12 -32 litres. The 26 litre capacity size are the most common gas hot water systems on the market. The size is measured by the amount of hot water that can be delivered in one minute at a 25 degree rise.

Heat pumps are basically an air conditioner that heats hot water. By being designed this way, it saves about ⅔ of the energy used to heat up the hot water. This benefit of decreased energy consumption is reflected in the price of heat pumps. Heat pump water heaters will generally cost upwards of $3,000. Tank sizes range from 160-315 litres in capacity.

Solar hot water systems are available in Hiline (tank on roof) or Loline (tank on ground), with tank sizes range from 150-400 litres in capacity.

Using solar hot water energy consumption can be reduced by up to 65-90%, depending on hot water usage. Usually, I recommend the Rheem Hiline Stainless Steel system due to the longevity of the tank and minimal working parts. Keep in mind for stainless steel, it is a more durable product so you see that in the price tag. So a Rheem Hiline Stainless Steel 300L 2 panel will cost upwards of $4,000.


If you are looking into getting a new hot water system, you’ll want to compare the cost. By cost, I am referring to the unit itself, plus – installation, running costs (how much energy is used and how much this energy costs), and maintaining the unit.

You may think you want to buy the most efficient hot water system available. However, if the installation costs for just getting the heater up and running are going to be excessive, it may not be economical. For example, solar hot water systems have a payback period of close to 20 years since you need to install solar panels.

Also, something to contemplate with gas continuous flow vs. storage gas unit is efficiency vs. retrofitting costs. You know the efficiency of a gas continuous flow is better than a gas storage tank. However, don’t forget to weigh up the retrofitting costs when changing from a storage hot water system to continuous flow. This can blow out in some instances.

Consider the location of the hot water system – Can it be wheeled around on a trolley and simply be put into position? Does it need to be lifted over air conditioners to be put in place? All options for the location of the heater need to consider the house’s layout. The location of the heater needs to avoid possible “dead legs” (this is cold water that is just wasted down the drain when waiting for the hot water to come out). The best position for hot water systems is to be as close as possible to the kitchen, as this is the tap that gets turned on most frequently in the house.

Gas and electricity are increasing in price, but does that mean solar hot water systems, heat pump water heaters, electric hot water systems, or continuous flow is the answer? To find out the answer that best suits your needs for energy costs of hot water, check out Rheem’s “Running cost Calculator below”.

Hot Water Cost Calculator

Heater Type
Running Cost Per Year
Average Cost for Tank
Average Cost Supply and Install
4 Star gas storage Natural Gas$960.17$800$1,500
5 Star gas storage Natural Gas$898.26$1,100$1,710
6 Star Continuous flow Natural Gas$837.72$800$1250-$1900
4 Star gas storage LPG$1,165.91$900$1,500
5 Star gas storage LPG$1,067.11N/AN/A
6 Star Continuous Flow LPG$966.60$800$1,250
Electric Storage Continuous Tariff$1,022.84$500$950
Electric Storage Off Peak 1$587.07$900$1,450
Electric Storage Off Peak 2$768.93$900$1,450
Solar electric boosted loline$389.11$3,200$4,200
Solar electric boosted hiline$443.90$3,200$4,200
Solar Gas Boosted Hiline$523.98$4,000$5,300
Solar Gas Boosted Loline$494.06$4,000$5,300
Heat Pump$478.11$3,200.00$3,800
Runnings costs per year are calculated using Rheem Running Cost Caulclator and are based on average energy prices July 2015.
Prices are estimates and are to be used a guides only.
Runnings costs are based on daily load of 200 Litres per day.

Whether you need

Same Day Hot Water Service can solve your problems and fit and properly install the correct hot water systems for any needs. We are available with 24/7 Emergency Service and cover these service areas. And most importantly, you can do this on the same day you contact us before 10 AM.

Same Day Hot Water Service has serviced Sydney’s residential and commercial premises for 20 years. We are a family-owned and operated company that supplies and installs hot water systems. We aim to provide you with the most dependable hot water, drain and plumbing services.

Progress, human ingenuity and improvements in hygienic living have meant that we all are fortunate enough to have the immediate convenience and luxury of always-present hot water. Our modern lifestyles are built around it, and when it’s not available, it’s immensely inconvenient and needs to be solved efficiently and with as little fuss as possible.

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