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How much does a hot water system cost?

When it comes to hot water , a lot of us are pretty lucky. We have hot water to wash our dirty clothes, take a shower after a long day or clean our dishes after dinner. But, do you know how much your hot water system costs, or what its ongoing fees are?

Hot Water

From purchase price to installation fees and running costs, people consider hot water systems to be quite expensive... but when you think about it, your hot water system works 24 hours a day, 7 days a week. So spending a little bit of cash is worth it!

If you are wanting to see the actual price when it comes to the different hot water systems however, we have put together some figures for you to consider. If you have any questions regarding hot water systems, their costing or their repair and maintenance, give Fallon Solutions a call on 1300 762 260 and we would be happy to assist.

Hot Water Systems

To begin, let's take a look at the different types of hot water systems , as well as the varying kinds of hot water service... confusing we know, but it will (hopefully) make a little more sense after we have finished.

Types of Hot Water System

There are two basic types of hot water units:

  • Storage: Storage systems store heated water in an insulated tank until the water is needed.
  • Instantaneous : An instantaneous heater, also called a continuous flow system, heats water as and when it is needed.

Types of Hot Water Service

After considering types, you have to consider the hot water service:

  • Electric : Offered in both storage and instantaneous systems.
  • Gas : Available in both storage and continuous flow systems, for either LPG or natural gas.
  • Solar : Offered in either electric boosted or gas (LPG or natural) boosted.
  • Heat Pump .

Hot Water System Costs

Now we know all the hot water system types and services, it's time to turn to cost. There are a few different costs to consider, including:

  • Purchase price.
  • Installation cost.
  • Ongoing energy bills.
  • Ongoing maintenance and servicing.
  • Any applicable electricity tariffs.
  • Any available rebates or incentives.
  • Costs of any additional system parts.

Hot Water Initial Costs

So, let's look at the upfront costs of hot water systems. The below cost indications are a guide only, and do not include installation fees. Installation costs can vary depending on the provider of the service - speak to your local hot water professional regarding how much installation will be for your preferred hot water system.

  • Electric hot water systems usually cost around $300.00 - $1,500.00, and are the cheapest option to purchase.
  • Gas hot water systems sit in the middle of the initial costing scale, ranging in price from around $900.00 to $2,000.00.
  • Heat pump hot water systems are a little more on the expensive side, generally costing around $2,500.00 to $4,000.00 and being the more costly electric option.
  • Solar hot water heaters are the most expensive choice when it comes to upfront financial contributions, costing between $2,000.00 - $7,000.00+ depending on a range of factors (ie. energy usage, household size, number of panels required etc.)
Hot Water Initial Costs

Hot Water Running Costs

When it comes to running costs , this can be a little tricky depending on the type of hot water system you have, its size and whether you have any rebates or incentives. The following image gives a pretty good representation though.

Hot Water Running Costs

As can be seen, electric storage are the most expensive systems when it comes to ongoing costs, followed by off-peak electric storage and solar (gas boosted - LPG). The cheapest is the solar system (gas boosted natural gas), but solar (electric boosted) and heat pump aren't too far behind.

Upfront vs Ongoing Costs

Finally, let's review the initial costs vs the ongoing running costs. When it comes to initial costs, electric storage systems are generally the cheapest to purchase and install, with solar being the most expensive. In relation to running costs, solar is the most cost effective whereas electric is the most expensive to run. It all looks a little something like this:

Initial Cost*

Running Cost


$300.00 - $1,500.00


Gas Storage

$900.00 - $2,000.00


Gas Instant

$900.00 - $2,000.00


Solar Gas

$2,000.00 - $7,000.00+


Solar Electric

$2,000.00 - $7,000.00+

Very Good

Heat Pump

$2,500.00 - $4,000.00

Very Good

*Not including installation costs.

Environmental Costs

When it comes to costs, it isn't just financial that we need to consider. There is also the environmental impact that hot water systems have, with some systems being kinder to the environment than others.

Hot Water Environmental Impact

Electric storage systems emit the largest amounts of CO2 into the air each year, followed by gas storage systems (both 3 and 5 star). The best option for the environment is a gas boosted solar hot water system, followed by an electric heat pump arrangement and a solar electric boosted system.

How can you reduce hot water running costs?

There are a few ways in which you can reduce your costs when it comes to hot water:

  • Choose an energy efficient hot water system - solar is the most energy efficient
  • Fix any leaking or dripping faucets or fixtures as soon as possible.
  • Limit your shower length.
  • Install a low-flow showerhead.
  • If and where possible, allow your washing machine to use cold water only to wash your clothes.
Fallon Solutions

Your friendly and reliable hot water specialists

If you have any questions regarding hot water system costs, or would like to speak to one of our knowledgeable team members regarding repairing or replacing your hot water system (or installing a new one!), give Fallon Solutions a call today on 1300 762 260 . We have years of quality industry experience when it comes to hot water systems across SEQ, so get in contact now!


Fallon Solutions (Hot Water Systems - pros & cons): https://www.fallonsolutions.com.au/hot-water/hot-water-systems-comparison

Energy Rating (Water Heating): http://www.energyrating.gov.au/products/water-heaters

Australian Government - YourHome (Hot Water Service): http://www.yourhome.gov.au/energy/hot-water-service

Sustainability Victoria (Choose a hot water system): https://www.sustainability.vic.gov.au/You-and-your-home/Save-energy/Hot-water/Choose-a-hot-water-system

Sustainability Victoria (Choose a hot water system): https://www.sustainability.vic.gov.au/You-and-your-home/Save-energy/Hot-water/Hot-water-running-costs

Canstar Blue (Hot Water Systems Compared): https://www.canstarblue.com.au/hot-water-systems/

CHOICE (How to buy the best hot water system): https://www.choice.com.au/home-improvement/water/hot-water-systems/buying-guides/hot-water-systems

The information contained on this page should be used as a guide only, and should not be read in isolation. Please ensure you complete your own extensive research regarding the costs associated with hot water systems, including consulting with a professional, to ensure you purchase the best system for your needs.


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