If the only question is which system costs the least to get installed today, the answer is electric storage, and it is not close. If the question is which system costs the least over the years you own it, the order flips. Here are the numbers, then the honest discussion.
Hot water installed prices compared
| System | Installed price | Purchase price | Running cost |
|---|---|---|---|
| Electric storage, like-for-like | $1,300 to $2,400 supply + install | Cheapest | Dearest on a full-rate tariff |
| Gas storage, like-for-like | $1,800 to $3,200 supply + install | Middle | Middle |
| Gas continuous flow | $1,900 to $3,500 supply + install | Middle | Middle, no tank standing loss |
| Heat pump | $2,500 to $4,500 supply + install after STC rebates | Dearest | Cheapest, by a clear margin |
All four figures are for a straightforward changeover: the unit, delivery, removal of the old system, valves, connection, commissioning and paperwork. Repairs to any system are quoted after diagnosis and have no published figure. Anything that changes the fuel, the position or the gas line is inspected and priced before work starts.
Purchase price versus running cost
Every hot water system costs you twice: once when it goes in, and then every quarter on the bill. The two costs run in opposite directions. Electric storage is the cheapest to buy and the dearest to run, because a resistive element on a full-rate tariff is the most expensive way there is to heat water. A heat pump is the dearest to buy and the cheapest to run, because it moves heat out of the air rather than generating it, and the Gold Coast climate suits it. The two gas options sit in between on both counts, with continuous flow having a small edge on running cost because there is no tank losing heat while nobody is using it. We are deliberately not putting dollar figures on running costs, because they depend on your tariff, your household and whether you have solar, and any figure we printed would be wrong for most readers. The direction is what matters: the more hot water your household uses, the more the running cost dominates, and the stronger the case for spending more up front.
What each system suits
Electric storage suits a small household, a house with no gas, a tight budget, or an urgent replacement where you need hot water back the same day. On an off-peak tariff the running cost is more bearable than on full rate. Gas storage suits a house that already has gas, a household that draws hard from two bathrooms at once, and anyone who wants the simplest like-for-like gas swap. Gas continuous flow suits a house with gas, a family that staggers showers through the evening and never wants to run out, and anyone short on space for a tank. A heat pump suits a mid-sized or large household with a good outdoor position away from bedrooms, especially with rooftop solar, and anyone who plans to stay in the house long enough to enjoy the lower bills. The STCs and any state rebate can knock $1,000 to $2,500 off the heat pump sticker, which closes most of the gap to gas.
When the cheapest install is the right answer
More often than you might expect, and we will not talk you out of it when it fits. If you are one or two people, if the house is a rental or an investment, if you are selling within a few years, or if the tank has died on a Friday and you need a shower tonight, the electric storage swap is the sensible call. The running cost penalty is real but it scales with use, and a small household on off-peak does not use enough to justify a bigger cheque. Where the cheapest install is the wrong answer is a busy family home on a full-rate tariff that plans to stay put. That household will pay the purchase saving back on the bill and keep paying, and a heat pump, or gas if the house has it, is the better buy.
The questions we ask before recommending one
- What is there now? A like-for-like swap is always the cheapest install, because the pipework, position and fuel are already right.
- Does the house have gas? If not, running a gas supply for one appliance is rarely good money, and the choice is between electric and heat pump.
- How many people, and when do they shower? Bursts of heavy use favour gas storage or a high-flow continuous unit. Steady use across the day suits a tank.
- Have you been running out? If so, the replacement is the moment to size up or change type, not to repeat the problem.
- Is there rooftop solar? Solar tilts the answer toward a heat pump, or an electric tank on a daytime timer.
- Where can the unit go? A heat pump needs airflow and a spot away from bedrooms. A continuous flow unit needs a wall, a power point and a gas line big enough to feed it.
- How long are you staying? The longer you own the house, the more the running cost matters and the more a dearer, cheaper-to-run system pays off.
- What is the tariff? Off-peak electric is a different proposition from full rate, and it changes the electric versus heat pump maths.
Those eight questions take a few minutes on the phone or at the door, and the answer to which system is cheapest to install usually turns into a different and more useful answer about which system is cheapest for you to own.
What the paperwork looks like on each
In Queensland a like-for-like hot water replacement is notifiable work, so whichever system you choose the licensed plumber lodges a Form 4 with the QBCC afterwards. Our plumbing licence is QBCC 15243081. Gas storage and continuous flow also need the gas work done by a licensed gas fitter under a separate Queensland gas work licence, with a gas compliance certificate issued to you. A heat pump and an electric tank need the electrical connection done by a licensed electrician. Any quote that does not mention the paperwork is worth a second look, because it is the part a cheap operator skips first.
Not sure which way to go? Call Hills Plumbing & Gas on 0472 657 042 or book through our Hot Water Systems service page. I will ask you the questions above, quote the system that fits, and tell you plainly if the cheapest install is the right one for your house. Jieye.