Choosing a Hot Water System: Electric, Gas or Solar?

15 May 2018    Hot Water

Winter is coming Perth! And that means not only do you have to worry about White Walkers and the Army of the Dead, but your Hot Water System. When a hot water system goes – it tends to go suddenly. At that point you don’t have the luxury of time and being able to carefully review the available options, unless you love cold showers! Instead, you get a replacement of the same type wheeled in ASAP – and try to forget about it until next time. But what if you were missing out on a better product?

Water heating accounts for roughly a quarter of typical household energy use – and it can be even more. It’s worth reviewing your hot water use well before your current system dies and then checking out the alternatives. You may find a hot water system (HWS) that saves energy and money and is kinder to the environment.

The first decision you’ll need to make when choosing a HWS is the heating method: electricity, gas or solar?


An electrically heated storage tank system is usually relatively cheap to buy and install, but is usually the most expensive to run, especially if it’s on the continuous (full day) rate.

Systems that run on off-peak electricity are much cheaper to run, but need a larger tank as the water heated overnight has to last you all day. And off-peak electricity isn’t available to all homes.

A four-person household typically needs a 125–160L tank for a continuous system or 250–315L for off-peak.

  • Can be installed indoors or outdoors.
  • Electric instantaneous water heaters are also available.
  • They range in price from about $300 to $1500 (not including installation).


Natural gas is a good option if you have the connection for it. It’s cheaper than electricity (though gas prices are rising) and because gas rates don’t vary through the day, gas hot water systems can heat water as needed.

A four-person household needs a tank of about 135–170L. You also have the option of an instantaneous system.

Usually installed outdoors due to venting requirements, but can be installed indoors with a flue.

Have an energy efficiency star rating.

Some have a pilot light, which uses a small amount of gas. Electric ignition is more economical, but in a blackout you can lose your hot water supply.

Liquid petroleum gas (LPG) bottles are an alternative to natural gas – but expect to pay significantly more in running costs.

They range in price from about $900 to $2000 (not including installation).


Consists of solar collector panels and a storage tank. A four-person household typically needs about four square metres of solar collector area (two panels) and a 300–360L tank. You need a large tank to allow for days with less sunlight (or more hot showers than usual).

If your panels can’t be installed in an ideal location, they may be less efficient and you’ll need a larger collection area.

The storage tank usually has an electric or gas booster element to keep the water hot on days with less sunshine.

Comparatively expensive and time-consuming to install, but a well-chosen system will pay for itself in the long run due to very low running costs.

Government rebates and other incentives can help offset the purchase cost.

See our solar hot water buying guide for more information.

They range in price from about $2000 to $7000 (not including installation).

New Hot Water System installation