Gas, electric, heat pump or solar: choosing without a sales pitch
Every installer recommends the type they fit. The honest version is that your house decides most of it — gas connection, outdoor space, roof aspect and how many showers run at once.
There are four ways to heat water in an Australian home, and two ways to store it. Get those two axes straight and the choice becomes much smaller than the brochures suggest.
The four types side by side
| Type | What it needs from the house | Where it disappoints | Runs out? |
|---|---|---|---|
| Electric storage | A circuit and somewhere for a tank. No flue, no airflow, no roof. | Running cost, unless it is on a controlled-load tariff and sized for a full day. | Yes — then waits to recover |
| Gas storage | Natural gas or LPG, and outdoor siting or a proper flue. | Standing heat loss; the least efficient of the tank options in cold climates. | Yes — but recovers faster |
| Gas continuous flow | Gas, a power point for ignition and controls, and very little space. | Fixed flow rate: two showers at once split it, and winter mains are colder. | No — but flow is capped |
| Heat pump | Airflow, clearance, a spot where compressor noise is not under a bedroom, condensate drainage. | Cold climates unless the model is rated for them; noise; slower recovery. | Yes — then waits |
| Solar thermal | Roof area and aspect, plus a gas or electric booster. | Winter and cloudy stretches, when the booster does the work. | Yes — booster covers it |
The four heat sources
Electric resistance
An element in a tank, the same principle as a kettle. Cheapest to install, simplest to repair, and the most forgiving of odd installation spots because it needs no flue, no airflow and no roof. Its weakness is running cost, which is why so many are on a controlled-load or off-peak tariff — and that in turn means the tank has to be big enough to carry the household through the day on one overnight heat.
Gas
Available as storage or continuous flow, and needs natural gas at the meter or bottled LPG. Gas units are normally installed outdoors or with a proper flue because of venting requirements. Continuous flow is the common form: it heats only while a tap is open, never runs out, and takes up very little space.
Heat pump
A refrigeration cycle that moves heat out of the air into the water, so it uses a fraction of the energy of a resistance element for the same result. The trade-offs are physical: it needs airflow, it needs somewhere its compressor noise will not sit under a bedroom window, and cold climates matter — not every model is designed for places that regularly drop below about 5 °C in winter. Ask specifically about cold-climate rating if you are inland or at altitude.
Solar thermal
Collectors or evacuated tubes on the roof feeding a tank, either mounted on the roof (thermosiphon) or at ground level with a pump. Needs roof area with reasonable aspect, and always needs a booster — gas or electric — for stretches of cloud and for winter. Do not confuse it with solar PV: a heat pump running off rooftop PV is a different setup, and often a more flexible one.
Storage or continuous flow
This is the axis people skip, and it changes daily life more than the heat source does.
A storage system holds a volume of hot water. Two showers at once is fine; the constraint is total volume and how fast it reheats (its recovery rate). Run it dry and you wait.
A continuous flow system never runs out, but delivers a fixed flow rate measured in litres per minute. Two showers at once means each gets roughly half, and a shower plus a dishwasher can produce a noticeably weaker shower. The rating is the whole spec — a unit sized for one bathroom in a household with three is the most common continuous-flow complaint.
Sizing: the question to insist on
The real sizing question is not "how many people live here" but "how many hot water outlets run in the same twenty minutes". A household of four where everyone showers between 7:00 and 7:30 needs more than a household of five who spread out.
For a storage system, ask for the volume and the recovery rate. For continuous flow, ask for the litres-per-minute rating at a realistic temperature rise — the headline number is usually quoted at a small rise, and winter mains water is colder.
What a proper installation includes
Whatever you choose, these should be part of the job and are worth confirming in writing:
- A tempering valve where required, limiting the temperature delivered to bathroom outlets.
- A relief valve with a discharge pipe to a safe point, correctly sized and not terminating somewhere it will scald someone.
- An isolation valve you can reach, so the next repair does not mean shutting off the whole house.
- A compliance certificate for the work — see licensed work. Keep it with the property records.
- For heat pumps, confirmation of clearances and condensate drainage, and an honest conversation about where the noise goes.
The shortcut, if you want one
If you have gas at the meter and limited outdoor space, continuous flow gas is the path of least resistance. If you have outdoor space, a spot away from bedrooms, and no gas, a heat pump is usually the strongest option and gets stronger if you have rooftop PV. If you have roof aspect, a long-term horizon and are prepared for a booster, solar thermal still earns its place. Straight electric resistance makes most sense as a small, cheap, simple replacement where nothing else fits — or where the tank is on an off-peak tariff and sized properly.
And before you replace anything: make sure the old system is genuinely finished. See which leak is urgent — replacing a system that only needed a part is the most expensive mistake in this category.
Frequently asked questions
Is a heat pump hot water system worth it?
Energetically, yes — a heat pump uses roughly a third of the energy of a conventional electric system for the same hot water. The practical caveats are space, compressor noise, and whether the model is rated for cold climates if your winters regularly drop below about 5 °C.
Does a continuous flow system ever run out of hot water?
No, but it delivers a fixed flow rate. Two showers at once split that rate between them, so an undersized unit feels weak rather than cold. Size it on simultaneous outlets, not on household headcount.
Do solar hot water systems need a booster?
Yes. Every solar thermal system has a gas or electric booster for cloudy stretches and winter. A quote without a booster is not a complete system.
What size hot water system do I need?
Size on how many hot outlets run in the same twenty minutes, not on how many people live in the house. For storage, ask for volume and recovery rate; for continuous flow, ask for litres per minute at a realistic winter temperature rise.
Sources
What this page explains is based on these official sources. If you check one and it does not match what you read here, send it to us and the article gets corrected.
- Australian Government, energy.gov.au. Hot water systems — types, installation and energy performance
- Australian Building Codes Board. National Construction Code — Volume Three (Plumbing Code of Australia)