The question of whether to switch from electric to gas hot water used to have an obvious answer (yes, gas is cheaper to run and recovers faster). In 2026 the answer has shifted, the better switch for most Gold Coast households is to a heat pump rather than to gas.
The headline comparison, running cost per year
For a typical 3-4 person Gold Coast household using 150-200 L of hot water per day, at 2026 tariffs:
- Heat pump: $200-300 per year
- Gas continuous flow (natural gas): $480-680 per year
- LPG continuous flow (hinterland): $700-1,000 per year
- Gas storage: $600-900 per year
- Electric storage: $800-1,200 per year
- Solar hot water with electric boost: $100-300 per year (if north-facing roof unshaded)
Heat pump and solar are clearly the cheapest to run. Gas continuous flow saves on standing pilot losses versus gas storage but does not beat heat pump.
Install cost comparison
- Switch from electric storage to heat pump: $3,600-5,800 install (after STC rebate). Save $500-900 per year versus current electric. Payback 4-8 years.
- Switch from electric storage to gas continuous flow: $2,800-4,500 install (includes gas line install if not already present). Save $200-400 per year versus current electric. Payback 7-15 years.
- Switch from electric storage to like-for-like electric: $1,400-2,400 install. No running cost change.
Why heat pump beats gas in 2026
- Federal STC rebate cuts heat pump install cost by $1,000-1,800. No equivalent rebate for gas units.
- Gold Coast electricity rates plus heat pump COP of 3-4 deliver effective per-kWh cost well below gas. The maths has shifted as both grid electricity and gas have risen, but gas has risen faster.
- No standing pilot losses. Heat pumps only run when heating water. Gas storage units burn gas continuously to maintain pilot.
- PV solar pairing. If you have solar PV, the heat pump can run on free electricity during peak production. No gas equivalent.
When switching to gas continuous flow is still the right answer
- Very high simultaneous demand households. 5+ people, multiple simultaneous showers, very high daily usage. Gas continuous flow's endless hot water at full flow beats heat pump's tank-recovery constraint.
- No suitable outdoor location for heat pump. Some apartments and tightly-packed townhouses lack the outdoor airflow space.
- Strong personal preference for gas hot water performance. Some users prefer the always-instant nature of continuous flow. Valid.
- Off-peak electricity tariff abolished or significantly raised on your specific connection (uncommon but possible). Re-evaluate.
If you already have gas to the house
The cost of switching to gas continuous flow is lower if you already have a gas line to the house (no new gas service install needed). Even so, in 2026 the heat pump still wins on total cost for typical household sizes. We model both at quote stage so you can see the numbers for your specific setup.
If you do not have gas to the house
Installing a new gas service (natural gas) for the first time costs $1,500-3,500 depending on connection distance and meter requirements. This makes the switch-to-gas option significantly more expensive and tips the balance even further toward heat pump. For new gas installs we almost never recommend it just for hot water.
Solar hot water as the third option
For north-facing unshaded roofs, solar hot water with electric or gas boost is competitive with heat pump on running cost. Higher upfront ($4,800-7,500) but near-zero running cost. Choice between heat pump and solar often comes down to roof access, panel aesthetics, and whether the household wants visible roof-mounted hardware.
How we recommend the right switch
On-site assessment, household size, daily usage, existing infrastructure (gas line present or not, electrical capacity, roof orientation, outdoor space for heat pump). We then quote 2-3 options with realistic 10-15 year total cost projections (install + running). You see the numbers, you make the call.
The gas connection fee nobody mentions in the quote comparison
Switching from electric to gas requires either an existing gas connection at the house or a new one. If you already have natural gas at the meter for cooktop or other appliances, the cost of running a branch line to the new HWU position is $400-1,200 depending on distance and access. If you do not have gas at the house at all, you are looking at a new natural gas service install, which on the Gold Coast in 2026 runs $1,500-3,500 for the connection itself (APA Group connection fee, meter install, regulator) plus the internal gas line install to your appliance position. Then there is the ongoing daily supply charge for the gas account, typically $0.95-1.30 per day or $350-475 per year just to keep the meter live, regardless of how much gas you actually burn. For a household using gas only for hot water, that supply charge alone wipes out a big portion of the running cost difference versus heat pump. We do this maths at quote stage and show the homeowner the true 10-year cost rather than just install price. A common surprise for first-time gas customers is discovering that their bill is dominated by the daily supply charge rather than the actual gas consumption.
LPG for hinterland homes is a different conversation
If you live in Tallai, Mudgeeraba acreage, Numinbah, Springbrook or any of the hinterland zones without natural gas reticulation, your gas option is LPG bottle gas. The bottle install is straightforward (twin 45kg bottles in a vented cage, regulator, auto-changeover) and the bottles get delivered by Elgas, Origin or Kleenheat. But the running cost is significantly higher than natural gas. A typical 3-4 person household running hot water on LPG continuous flow burns through a 45kg bottle every 3-5 weeks, at $130-180 per bottle exchange. Annual hot water cost on LPG is $700-1,000 versus $200-300 on heat pump. The bottle delivery logistics also matter, you need access for the delivery vehicle, the cage needs to meet AS5601 clearances from windows and ignition sources, and bottle stock-outs do happen if your supplier misses a delivery. For hinterland homes we almost always recommend heat pump over LPG hot water, the running cost gap is too big to justify the switch. The one exception is properties with intermittent grid power (storm-prone acreages where blackouts last 24-48 hours), where LPG provides resilience that an electric heat pump does not.
The simultaneous demand reality check before you switch to continuous flow
A common reason people switch from storage to gas continuous flow is the promise of endless hot water. The promise is real but conditional, the unit only delivers endless hot water up to its rated flow rate at the temperature rise you need. A Rinnai Infinity 26 (26 L/min nameplate) sounds like plenty for a 4-person Robina household. But two simultaneous showers at 9 L/min each plus a dishwasher fill at 8 L/min plus a kitchen tap on hot at 6 L/min equals 32 L/min of demand, well above the unit capacity. The unit responds by either dropping flow rate or dropping temperature, and the second shower goes lukewarm. Winter is worse, the unit is rated to deliver 26 L/min with a 25C temperature rise but Gold Coast July cold water at 14C needs a 36C rise to hit 50C shower temperature, dropping effective capacity to roughly 18 L/min. Households that genuinely need endless hot water for 3-4 simultaneous fixtures need a Rinnai Infinity 32 ($300-400 more) or a Rheem Metro Max with similar capacity. Sizing the unit for actual peak demand, not nameplate, is the difference between satisfaction and disappointment.
What we actually see homeowners regret about the switch decision
The most common regret on an electric-to-gas switch we hear from homeowners 2-3 years later is the running cost did not drop as much as expected. Gas prices have risen faster than electricity over the last 5 years, the supply charge eats into the savings, and the gap that was $500/year on paper turns out to be $200/year in practice. The second most common regret is from canal-front Sorrento and Paradise Point homeowners who switched to gas continuous flow then discovered the unit needs to be on an external wall (combustion air requirements) and the only available wall faces east into the salt-laden onshore wind, killing the unit at year 8-9 instead of 12-15. The third regret is from hinterland homeowners who switched to LPG only to find the bottle changeover charges and delivery logistics annoying. The cleanest no-regret path for most Gold Coast households in 2026 is heat pump, the federal STC rebate kills the install cost gap, running cost is genuinely lower, no daily supply charge, and the install location flexibility is better than gas. We will quote both paths honestly if you ask.
Electric hot water still has one specific use case that beats everything else
For all the heat pump advocacy, electric storage on controlled-load tariff still wins in one specific scenario, the household with a large oversized solar PV system and a hot water demand pattern that aligns with daytime production. A Robina or Coomera home with 10-13kW of PV on the roof can run a 315L or 400L electric storage element entirely from excess solar export during the day, paying effectively zero cents per kWh for the energy. The element cycles on around 10am-2pm when PV production peaks, the tank fills with hot water by mid-afternoon, and the household uses it through the evening and morning. Annual running cost on this setup, $80-150, lower than heat pump and lower than solar hot water. The requirements are real, big PV array, smart diversion controller ($400-800 install), and a tariff that allows controlled loading or a behind-the-meter setup. Not for everyone, but for the homeowner with the right setup it is the lowest-cost hot water solution available. We have installed this configuration on a dozen acreage and large-block homes across the Gold Coast and the homeowners report bills consistently in the lowest band.