What’s the Cheapest Hot Water System in Australia?

If you’re trying to keep costs down, here’s the short answer:

The cheapest hot water system to buy upfront in Australia is usually an electric storage system.

But the cheapest system to buy isn’t always the cheapest to run. Some systems cost more to install but save you money every year on energy bills. Here’s how to choose the most affordable option for your home, both now and long term.

Thermann - Gas Instantaneous Hot Water Systems

Cheapest Hot Water System to Buy Upfront

For most households, electric storage hot water systems have the lowest purchase and installation costs. Why they’re cheaper upfront:
  • Simple technology that’s been used for decades
  • Lower unit purchase price
  • Easier and faster installation
  • No need for gas connections or roof-mounted panels
They’re often a practical option for smaller households, rentals, and homes on a tight budge

Cheapest Hot Water System to Run

If you’re thinking long term, running costs matter just as much as installation price.

Here’s how systems generally compare for energy costs:

Cheapest to run:

• Solar hot water systems
• Heat pump hot water systems

Mid-range running costs:

• Gas hot water systems

Highest running costs:

• Standard electric storage systems

Solar and heat pump systems cost more upfront but can significantly reduce energy bills over time, especially with available government rebates.

Typical Installed Price Ranges in Australia

Actual costs vary based on size, brand, and installation requirements, but here’s a general guide:
System Type Typical Installed Price Range
Electric Storage $1,200 – $2,500
Gas Storage $1,800 – $3,500
Instant Gas (Continuous Flow) $2,000 – $4,000
Heat Pump $3,500 – $6,500
Solar Hot Water $4,000 – $8,000+

Homes switching system types (for example, electric to solar or gas) may have higher installation costs due to plumbing, electrical, or roof work.

Hot Water Repairs

What Affects the Total Cost?

The system itself is only part of the price. Installation costs can change depending on:

  • Whether you’re replacing the same type of system
  • Upgrading to a different system (like electric to heat pump)
  • Moving the unit to a new location
  • Pipework or valve upgrades required for safety
  • Disposal of the old hot water system

A licensed plumber can assess your home and recommend the most cost-effective setup for your household size and usage.

Rebates Can Make Expensive Systems More Affordable

Energy-efficient systems like heat pumps and solar hot water may be eligible for government incentives and Small-scale Technology Certificates (STCs). These rebates can significantly reduce the upfront cost, making higher-efficiency systems more affordable than many people expect.

So What’s the Best Budget Choice?

If you need the lowest upfront cost, an electric storage hot water system is usually the cheapest option.

If you want the lowest long-term running costs, a heat pump or solar system could save you more over the life of the system, especially with rebates.

The best choice depends on your budget, household size, and how long you plan to stay in the home.

Solar Hot Water System Installation

Need Help Choosing the Right Hot Water System?

Choosing the cheapest hot water system isn’t just about price, it’s about getting the right size, safe installation, and reliable performance.

The Plumbing & Electrical Doctor can help you compare options and provide a clear quote on supply and installation.

Call 131091 or contact our team online for expert advice and fast service.

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