What is the Cheapest Hot Water Heater?

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What Is The Cheapest Hot Water Heater?

Canberra and Newcastle Hot Water Systems

What Canberra and Newcastle hot water buyers consider a worthwhile investment is a hot water system that demands fewer upfront costs but gives you reliable hot water throughout its lifespan. Only a few Newcastle and Canberra hot water customers would consider the operating costs involved, and regard dependability and warranty as the most important factors.

To find out what the cheapest hot water heater to buy in your area is, consider the following:

Upfront Costs for New Water Heater Installation and Replacement

We can provide you with a comprehensive estimate of the expenses involved in water heater installation and replacement. Our guide is designed to give you a clear idea of all the possible costs and what you can anticipate when purchasing a new water heater.

Type of Hot Water Heater

The prices of hot water systems depend on the type. Given that the capacities are the same, traditional electric hot water systems tend to be the cheapest to buy among all the hot water heaters in the market.

Instant Hot Water Systems vs Storage Tank Hot Water Systems

If you compare the purchase cost of instant hot water systems and storage tank hot water systems, you will find that the storage is more expensive than the instant hot water systems.

Cheapest Hot Water Heater

Hot Water Heater Capacity

As the capacity of the hot water heater increases, so does its price tag. You also have to be familiar with the following terms:

Delivery Capacity

Is the volume of hot water that your hot water service can provide given a specific period of time.

First Hour Capacity

Is the volume of hot water that your hot water system can provide upon the first hour of consumption or usage

Storage Capacity

Is the maximum volume of hot water that a storage water heater can hold based on the hot water tank’s physical volume

Hot Water System Installation Costs

If you are replacing an old water heater with the same type and capacity, the hot water system installation costs are lower. It’s a different case altogether if you are switching from an electric hot water system to a solar hot water system or from a storage hot water system to an instant hot water system or vice versa. There are also considerable costs involved if you move your hot water system to another area in your home.

Disposal of the Old Hot Water System

For hot water system replacement jobs, plumbing companies charge for hot water system disposal. Depending on the state’s regulations, there is a proper way of disposing of the hot water system.

Hot Water Heater Fittings

There are many valves, copper tubings, and fittings that go into the installation of your hot water system. The most common valves are tempering valves, which mix and cold water at the right amount to ensure that there will be no scalding incidents. Pressure-limiting valves reduce the pressure going to your water heater. Finally, the duo valves isolate your water and stop backflow from your water heater back into your cold water pipes.


There are rebates available when you purchase and install energy-efficient hot water systems such as solar water heaters and heat pump hot water systems. Both are eligible for small-scale technology certificates (STC). An STC is the measure of renewable energy which can be traded for cash or a discount on the purchase price of the system, according to the Australian Department of Industry, Science, Energy and Resources.

How much should a Hot Water System Purchase Cost?

Here is a tabulation of the cost of hot water systems per type that is dependent on size and warranty.

Hot Water Heater Type*Average Hot Water System Price Range
Electric Hot Water System$800 – $2,000
Gas Storage Hot Water System$1,100-$1,700
Instant Gas Hot Water System$1,100-$1,800
Solar Hot Water System$5,400-$8,000
Heat Pump Hot Water System$4,600-$5,500

*Supply and Install prices sourced as of April 2020. These may vary depending on hot water supply provider and the tank or delivery capacity.

Operating Costs for New Water Heater Installation and Replacement

Here are the factors that could affect your hot water system’s operating costs:

Fuel Type

Two of the most commonly used water heaters in Australia are electric hot water systems and gas hot water systems.  It is true that gas water heaters may cause more in terms of upfront costs than electric hot water heaters.

However, how much cheaper it is to run a water heater using natural gas or LPG rather than through electricity compensates for the price difference. On the other hand, solar hot water systems are still the cheapest to run considering that solar energy will always be free.

Energy Efficiency

The Energy Factor (EF) indicates a water heater’s overall energy efficiency based on the amount of hot water produced per unit of fuel consumed over a typical day. The bigger the energy star label, the more efficient the hot water is. Energy efficiency plays a big role when you are choosing between a 4-star gas hot water system versus a 5-star gas hot water system. The latter may cost more, but it uses less energy to produce the same amount of hot water as the 4-star unit.


It is important to understand what types of energy tariffs you are paying for. According to Energy Australia, tariffs are the prices charged to customers for the use of energy.

Electrical Tariffs

If you have the time of use electric tariffs, you might want to run your hot water heater during off-peak hours that would charge you less for electricity use. However, if your home is using a single rate tariff, you get a flat rate no matter when you use electricity.

Gas Tariffs

There are two types of gas tariffs, seasonal and nonseasonal gas rates. We only use the nonseasonal tariff in Newcastle and Canberra, so your gas provider charges you with a flat rate no matter if it’s winter when there’s an influx of hot water usage or summer when usually only your dishwasher and washers use the hot water.

How Much is the Operating Cost of your Hot Water System?

First, you need to know the following information to get an estimate of your hot water operating costs:

Estimated Monthly Hot Water Heater Operating Cost Formula

Estimated Monthly Hot Water Heater Operating Cost

FREE Hot Water System Quote from Licensed Plumbers

If you are looking for a new hot water system for your new home or a replacement for an old hot water unit, the Plumbing and Electrical Doctor can provide you with a free quotation on the supply and installation of the most affordable hot water systems available in the Australian market.

For more information on Canberra Hot Water Systems installation and Newcastle Hot Water issues, reach out to us via our contact page or dial our hotline at 131091 to reach a friendly representative.

Gets $100 OFF* On Your New Hot Water Installation TODAY!

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Joe Evers

Joe is the director of the Plumbing and Electrical Doctor. He has committed the past 23 years to the plumbing and electrical industry. From his humble beginnings as an apprentice to now being a respected tradesman with his own sphere of influence, he aims to support the industry and the people involved in it. Joe and his young family have so much to be grateful for and appreciate everything that the industry and the customers have given him.


General Plumbing & Electrical | Hot Water Systems | Blocked Drains | Gas Fitting

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