A guide to hot water system prices

Wondering about hot water system prices and how much installation might cost? Hot water system prices will depend on the type of system you choose, the size of the unit, whether you receive any rebates, and many other factors.

Here’s a general idea of hot water system price ranges by type:

• Gas hot water systems: $785 to $1,625
• Electric hot water system with storage tank: $525 to $2,000
• Electric instant hot water system price: $750 to $1,500
• Solar hot water systems cost: $3,650 to $6,560+

In this guide, we explore:

• Factors that affect hot water system cost
• Differences between tank storage and continuous flow systems
• How much is a hot water system?
• The best hot water system brands on the market
• Choosing the right water heater for your household
• Getting prices and installation quotes from plumbers, and more.

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Factors that affect the cost of a hot water system

Several factors can influence the cost of a hot water system, including:

• System type: For example, solar hot water systems are more expensive to install initially but are energy efficient, which means they can offer significant long-term savings.
• Size: The unit size will depend on the size of your household and your hot water usage. Larger systems will typically cost more than smaller ones.
• Brand
• Installation costs
• Government rebates

It’s important to consider all of these factors when selecting a hot water system to ensure you choose the option that’s right for your household.

What’s the difference between storage and continuous flow systems?

There are two fundamental types of hot water units. These are storage and continuous flow systems. Storage systems hold heated water in an insulated tank until it’s needed, whereas a continuous flow system (also referred to as instantaneous, tankless or on demand) heats water on a need-to-use basis. It does this by circulating cold water through heated copper piping.

A continuous flow system is well-suited for small to medium sized homes. Larger homes with more occupants won’t benefit as much from the advantages of this compact type of system. The benefits of an instantaneous water heater include:

• Greater energy efficiency
• Longer lifespan than tank storage systems (up to 20 years)
• Less maintenance
• Better water quality
• Government rebates in some states
• A space-saving unit – about the size of a suitcase!

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Hot water system cost

While a hot water system can cost anywhere from $300 to more than $7,000, the price will depend largely on the type of unit you choose for your home.

Electric and gas systems both offer tank storage and instantaneous options. With gas units, you can use either LPG or natural gas. For solar systems, you can choose from electric or gas boosting (LPG or natural), while heat pump hot water systems are another option to consider.

Let’s explore the prices for these different types of water heaters.

Solar hot water system price

How much is a solar hot water system? Solar hot water system price in Australia typically ranges from $3,000 to $7,000, or more, not including installation. The upfront costs of solar hot water systems are on the higher end of the scale and will depend on your household size, how much energy you usually use, and how many panels are required.

Solar hot water system cost estimates for electric and gas systems:

• Roof mounted solar with electric power: $3,650 to upwards of $5,050
• Solar split gas: $4,950 to upwards of $6,560

When it comes to ongoing running costs, solar options will be cheaper to run than most so can be worth the initial outlay, particularly with government rebates.

Get in touch with local hot water system specialists in your area to get the best solar hot water system price for a quality unit.

Gas hot water system prices

Gas hot water systems generally range between $900 and $2,000. Natural gas is an affordable option that will usually be cheaper than electricity, unless you have solar panels. A gas hot water system is quick to install and can be done within a few hours.

Average gas hot water system price estimates:

• Storage tank gas system: $880 to $1,525
• Continuous flow gas water heater: $785 to $1,625

Electric hot water system prices

Electric hot water systems with tank storage usually cost between $525 and $2,000, depending on their size. The average price for a continuous flow electric hot water heater is between $750 and $1,500.

An electric water heater can be installed either inside or outside of your home. You’ll need to hire a plumber that holds a restricted electrical license to install an electric hot water system.

You might like: How much does a plumber cost?

What is a heat pump hot water system and how much do they cost?

A heat pump hot water system is an efficient electric storage tank system that uses the same technology as a fridge or air conditioner to extract heat from the air and use it to heat the water tank. It’s a great option for those who have solar panels on their homes as they can use their own “free” electricity to power the system.

A hot water heat pump can be integrated (tank and compressor together) or split (separate tank and compressor) and must be installed in a well-ventilated area, typically outdoors. The installation process is usually straightforward and takes only a few hours if replacing a similar heat pump or electric storage hot water system. However, the compressor on the unit can be noisy, and it needs to be installed at a distance from nearby homes.

Hot water heat pumps work best in warm and temperate regions, but there are models designed to work in colder climates, and most systems have a booster element for days of cold weather or high water usage. For a four-person household, a tank size of 270-315L is typically required.

The cost of heat pump hot water systems typically falls between $3,000 and $4,000, excluding installation. However, the purchase cost can be offset with the help of government rebates and other incentives.

Hot water system installation cost

Hot water system installation costs can range widely between $1,000 and upwards of $7,000, depending on your water usage, the tank size required, type of system being installed, labour, materials, rebates you receive, and more.

Let’s look at the average installation price range for different types of water heaters:

How much does it cost to install a gas hot water system?

Gas hot water system replacement cost: $500 to $800

New unit installation: $1,000 to $3,000

Electric hot water system installation cost

electric hot water system replacement cost: $300 to $700

New unit installation: $1,000 to $2,000

Solar hot water system installation costs

New unit installation: $3,000 to $7,000

Keep in mind that all Government rebates and solar hot water system warranties require that an accredited installer from the Clean Energy Council list perform installation.

Heat pump system installation costs

New unit installation: $1,000 to $2,600

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Best hot water system brands

Many people want comfort in knowing they’re buying the best electric hot water system on the market. Some of the top brands to research for any hot water unit include:

• Rinnai
• Rheem
• Bosch
• Dux, and
• Thermann

Which system is best for my household?

In terms of efficient and cost-effective solutions, a solar hot water system is often the best option for most households. However, if this is not feasible, there are plenty of other alternatives.

For a small household of one to two people, a continuous flow hot water system (either gas or electric) or a small gas storage hot water system is a good option. A medium-sized household of three to four people could benefit from a continuous flow or storage tank gas hot water system, or even a heat pump.

For larger households with five or more people, gas storage units are usually more economical than multiple continuous flow units. Large heat pumps also work well.

Getting quotes from plumbers

To get accurate quotes for hot water systems and installation costs, it’s important to have a clear understanding of the type of hot water system you require, such as electric, gas, solar, or heat pump. To find local suppliers and installers, you can use online directories like Yellow Pages, or ask friends or family members for recommendations.

When requesting quotes, make sure to provide the tradesmen with your specific requirements, including the type of hot water system, the size of your household, your budget, and any other preferences. Be sure to request a detailed and itemised quote that includes the total cost of the system, installation fees, and any additional charges.

We recommended you compare at least three quotes before making a decision. Factors to consider include the reputation and experience of the supplier or installer, the warranty and after-sales service provided, and the overall cost. By taking the time to research and compare quotes, you can select the best hot water system for your needs and budget.

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*All costs and prices quoted were sourced at the time this cost guide was written and should only be used as an estimate.