Best Hot Water System for Your Home: Electric, Gas, Heat Pump and Solar Compared

Oct 9, 2024

The best hot water system for your home depends on your household size, number of bathrooms, shower habits, available energy source, installation location, running cost goals and whether you want supply only or an eligible supplied-and-installed option.

There is no single best hot water system for every property. Electric storage can suit simple replacements and homes without gas. Gas hot water can suit homes already using natural gas or LPG. Heat pump hot water can suit energy-focused homes with suitable outdoor space, airflow and drainage. Solar hot water can suit homes with good roof space and sun exposure.

Installed Today makes it easy to compare and order hot water systems online, including electric hot water systems, gas hot water systems, instant gas hot water systems and heat pump hot water systems. Supply-only ordering is available across major Australian metro areas, with selected supplied-and-installed options available on eligible products in Brisbane and Gold Coast service areas.

Quick Answer: What Is the Best Hot Water System?

The best hot water system is the one that matches your home’s hot water demand, energy source and installation conditions.

As a general guide:

Electric storage hot water can suit simple replacements and homes without gas
Gas storage hot water can suit homes already using natural gas or LPG that want stored hot water
Instant gas hot water can suit homes wanting continuous flow hot water without a large tank
Heat pump hot water can suit energy-focused homes with suitable outdoor space, airflow and drainage
Solar hot water can suit homes with suitable roof space, sun exposure and booster planning
Instant electric hot water can suit small point-of-use applications, but may not suit whole-home shower demand

Before ordering supply only, confirm the model, size, gas type, electrical requirements, water pressure, access, valves, drainage and installation suitability with your licensed installer.

Main Hot Water System Options

Most homes compare these main hot water system types:

Electric storage
Gas storage
Instant gas
Instant electric
Heat pump
Solar hot water

Each system works differently. The best choice depends on your household, not just the product price or brand.

Electric Hot Water Systems

Electric hot water systems use an electric element to heat water inside a storage tank. They are common in Australian homes and are often chosen for simple like-for-like replacements.

Electric storage may suit:

Homes without natural gas or LPG
Existing electric storage replacements
Rental properties
Small, medium and larger households
Homes already wired for electric hot water
Customers wanting a familiar tank-style system

Common size categories include 250L electric hot water systems, 315L electric hot water systems and 400L electric hot water systems.

Popular electric storage options include:

Electric storage can be a practical option, but sizing matters. If your old system regularly ran out of hot water, do not automatically replace it with the same size.

Gas Hot Water Systems

Gas hot water systems can suit homes that already have natural gas or LPG available.

Gas hot water systems usually fall into two main groups:

Gas storage hot water
Instant gas hot water

Gas systems may suit homes that:

Already use natural gas or LPG
Want gas storage or continuous flow hot water
Have suitable outdoor installation space
Have suitable gas pipe sizing
Have suitable water pressure
Want to compare tank-style and tankless-style options

Gas work must be completed by a licensed gas fitter. Natural gas and LPG systems are not interchangeable, so the correct gas type must be selected before ordering.

Gas Storage Hot Water Systems

Gas storage hot water systems heat and store water in a tank. They can suit homes already using gas that want stored hot water ready for daily use.

Gas storage may suit:

Existing gas storage replacements
Homes already set up for natural gas or LPG
Households wanting a familiar tank-style system
Properties with suitable outdoor space
Homes where stored hot water suits the usage pattern

Common gas storage categories include:

Popular gas storage options include:

Instant Gas Hot Water Systems

Instant gas hot water systems, also called continuous flow systems, heat water as it passes through the unit. They do not store a full tank of hot water.

Instant gas may suit:

Homes wanting continuous flow hot water
Homes with suitable natural gas or LPG
Homes with suitable gas pipe sizing
Homes with suitable water pressure
Properties with outdoor wall space
Households wanting a compact alternative to a storage tank

Common instant gas sizes include 16L, 20L and 26L.

A 26L instant gas hot water system may suit some family homes, but only where gas pipe sizing and water pressure support the selected unit.

Popular instant gas options include:

External gas hot water units are designed for outdoor installation unless the specific manufacturer model is approved for internal flued installation.

Heat Pump Hot Water Systems

A heat pump hot water system is an electric hot water system that uses heat from the surrounding air to help heat stored water.

In the right location, a heat pump can reduce electricity use compared with standard electric storage. It is often considered by households replacing older electric storage systems or wanting an energy-focused upgrade.

Heat pump hot water may suit homes that:

Want to reduce hot water electricity use
Are replacing an older electric storage system
Have suitable outdoor space
Have clear airflow around the unit
Can manage condensate drainage
Have suitable electrical supply
Have a sensible noise location
Want to pair hot water operation with rooftop solar where timing suits

A heat pump is not automatically the best hot water system for every home. It needs suitable airflow, drainage, access, electrical suitability and noise placement.

Many homes compare medium heat pump hot water systems 200L–280L, while higher-demand homes may compare large heat pump hot water systems. Customers wanting extra control may also compare Wi-Fi enabled heat pump hot water systems.

Popular heat pump options include:

Solar Hot Water Systems

Solar hot water systems use roof-mounted collectors to capture heat from the sun and transfer it into stored water. Most systems include an electric or gas booster for cloudy weather or higher-demand periods.

Solar hot water may suit homes with:

Suitable roof space
Good sun exposure
Minimal shading
Suitable roof orientation
A suitable booster setup
Long-term energy efficiency goals
Space for collectors and the storage arrangement

Solar hot water can reduce grid energy use where roof conditions suit, but it is not always the easiest replacement. Roof access, shading, collector placement, booster type and upfront cost all matter.

For some homes, heat pump hot water may be easier to compare because it does not need roof-mounted collectors.

Instant Electric Hot Water Systems

Instant electric hot water systems heat water on demand using electric heating elements.

They may suit:

Small sinks
Offices
Kitchenettes
Granny flats
Low-demand fixtures
Point-of-use hot water
Space-limited applications

Instant electric hot water is not always suitable for whole-home shower demand because electrical requirements can be high. A licensed electrician or installer should confirm whether the property can support the selected unit before ordering.

Electric vs Gas vs Heat Pump vs Solar Hot Water

System Type	Best Suited To	Key Checks
Electric storage	Simple replacements and homes without gas	Tank size, electrical supply, access and drainage
Gas storage	Homes with natural gas or LPG wanting stored hot water	Correct gas type, outdoor location and valve setup
Instant gas	Continuous flow hot water where gas supply suits	Gas pipe sizing, water pressure and correct gas type
Heat pump	Energy-focused homes with suitable outdoor space	Airflow, drainage, access, noise and electrical suitability
Solar hot water	Homes with suitable roof space and sun exposure	Roof orientation, shading, booster and collector setup
Instant electric	Small point-of-use applications	Electrical capacity, circuit requirements and flow rate

The best hot water system is the one that fits your home’s demand and site conditions, not just the one with the lowest upfront price.

Best Hot Water System for Small Homes

Small homes may suit:

Smaller electric storage systems
16L instant gas where gas supply is suitable
Compact instant electric systems for small point-of-use needs
Selected heat pumps where outdoor space and airflow suit

Avoid oversizing unless household demand is likely to increase. Oversizing can increase product cost and may not improve comfort.

Best Hot Water System for Family Homes

Family homes usually need more careful sizing because hot water demand often peaks in the morning and evening.

Common options include:

250L electric storage
315L electric storage
Medium heat pump hot water
20L instant gas
26L instant gas where the site supports it
Gas storage where natural gas or LPG is available

If your current system runs out of hot water, review the size and system type before ordering a replacement.

Best Hot Water System for Larger Homes

Larger homes may need:

315L or 400L electric storage
Larger heat pump systems
26L instant gas where gas pipe sizing and water pressure support it
Larger gas storage options
Installer review of pipework, gas supply, water pressure and fixture demand

Do not choose the largest system automatically. The system still needs to suit the property.

Best Hot Water System for Homes Without Gas

Homes without gas usually compare:

Electric storage hot water
Heat pump hot water
Instant electric hot water for small point-of-use applications
Solar hot water where roof conditions suit

Electric storage can be a simple replacement. Heat pump hot water may be worth comparing if the home has suitable outdoor space, airflow, drainage and electrical supply.

Best Hot Water System for Homes With Natural Gas

Homes with natural gas may compare:

Gas storage hot water
Instant gas hot water
Heat pump hot water if moving toward electric-style hot water
Electric storage where a simple non-gas replacement is preferred

If choosing instant gas, confirm gas pipe sizing and water pressure before ordering.

Best Hot Water System for LPG Homes

Homes using LPG must choose LPG-compatible hot water systems. Natural gas and LPG models are different.

LPG hot water may suit:

Homes using bottled gas
Rural or semi-rural properties
Homes without natural gas connection
Properties already set up for LPG hot water

Always confirm the correct LPG model before ordering. Gas work must be completed by a licensed gas fitter.

Best Hot Water System for Solar Homes

Homes with rooftop solar may compare heat pump hot water or electric storage timing options.

Heat pump hot water can pair well with rooftop solar where:

Timer settings suit household usage
The system can run during stronger solar generation periods
Electrical setup is suitable
The tank size and recovery suit the household

This does not mean hot water is automatically free. Product cost, installation, maintenance and electricity use still matter.

Choosing the Right Size Hot Water System

Correct sizing is one of the most important parts of choosing the best hot water system.

A system that is too small may run out during peak use. A system that is too large may cost more than needed or may not suit the available space.

When choosing size, consider:

Number of people in the home
Number of bathrooms
Shower length
Bath use
Kitchen use
Laundry use
Morning and evening peak demand
Whether multiple showers run at once
Existing system size
Whether the old system ran out of hot water
Available energy source
Installation space
Recovery rate
Water pressure
Gas pipe sizing where relevant

For electric storage, many homes compare 250L, 315L and 400L systems.

For heat pumps, many homes compare 200L–280L and 280L-plus systems.

For instant gas, common sizes include 16L, 20L and 26L.

Supply-Only vs Supplied-and-Installed

Installed Today offers supply-only ordering across major Australian metro areas. This can suit customers who already have a licensed installer organised and want to order the product online.

Supply-only may suit you if:

Your installer has confirmed the correct product
The system size suits your household
The correct gas type has been selected where relevant
Electrical requirements have been checked
Water pressure has been reviewed
Access and drainage are suitable
You understand what is not included in the product price

Selected supplied-and-installed options are available on eligible products in Brisbane and Gold Coast service areas. Availability depends on the product, address and installation requirements.

What Is Not Included in Supply-Only Hot Water Pricing?

For supply-only products, the listed product price generally covers the product only.

It does not usually include:

Installation labour
New valves
Electrical work
Gas work
Plumbing alterations
Pipework changes
Drainage changes
Condensate drainage for heat pumps
Tempering valve upgrades
Pressure limiting valve upgrades
Expansion control valves
Old unit removal
Disposal
Compliance upgrades
Concrete bases or slab work
Relocation of the system
Rebate administration
Site assessment

Always confirm full installation requirements with your licensed installer before ordering supply only.

Rebates, STCs and Incentives

Some hot water systems, especially heat pumps and solar-style upgrades, may be eligible for rebates, STCs or other incentives depending on the product, location, supplier pathway and current program rules.

These incentives can change.

Before relying on a rebate or discount, confirm:

Whether the selected product qualifies
Whether your property qualifies
Whether the old system type matters
Whether supply-only purchases are eligible
Whether an approved supplier or installer is required
Whether pre-approval is needed
Whether the incentive is applied upfront or claimed later
Whether the rebate or STC value is already included in the price

A rebate can improve value, but the system still needs to suit the home.

Maintenance and Long-Term Performance

A hot water system needs maintenance to perform safely and reliably. Maintenance requirements vary by system type, water quality, model and installation location.

General maintenance considerations include:

Checking for leaks
Watching for rust or corrosion
Keeping the area around the unit clear
Following manufacturer servicing guidance
Checking valves where required
Checking the anode where applicable
Keeping heat pump airflow clear
Checking condensate drainage for heat pumps
Using a licensed gas fitter for gas systems
Using a licensed electrician for electrical faults

Do not attempt plumbing, gas or electrical repairs yourself.

Brand Options to Compare

Installed Today stocks a range of major hot water brands, including:

Brand matters, but system type, size, gas type, water pressure, installation location and household demand matter more than brand alone.

Brisbane and Gold Coast Considerations

For Brisbane and Gold Coast homes, hot water system choice often depends on the existing unit, outdoor space, access, drainage and energy source.

Common considerations include:

Replacing older electric storage systems
Comparing electric storage with heat pump upgrades
Natural gas vs LPG availability
Outdoor wall space for instant gas
Gas pipe sizing for 26L systems
Heat pump airflow and noise placement
Condensate drainage
Tight side access
Existing valve condition
Old unit removal and disposal
Whether the selected product is eligible for supplied-and-installed options

Installed Today offers selected supplied-and-installed options on eligible products in Brisbane and Gold Coast service areas, with supply-only ordering available across major Australian metro areas.

Common Mistakes When Choosing a Hot Water System

Choosing Only by Product Price

A cheap system may cost more long term if it is undersized, inefficient or unsuitable for the property.

Replacing the Same Size Without Checking Demand

If the old system ran out of hot water, the same size may not be enough.

Ignoring Gas Type

Natural gas and LPG systems are different. Always choose the correct model.

Choosing 26L Instant Gas Without Checking the Site

A 26L instant gas system needs suitable gas pipe sizing and water pressure.

Choosing Heat Pump Without Checking Location

Heat pumps need clear airflow, condensate drainage, access, electrical suitability and sensible noise placement.

Assuming Instant Electric Suits the Whole Home

Instant electric systems can have high electrical demand and may be better suited to point-of-use applications.

Assuming Rebates Are Guaranteed

Rebates, STCs and incentives can change and may depend on product, location, supplier and installer pathway.

Assuming Supply-Only Includes Installation

Supply-only generally means product only unless installation is selected or clearly shown.

Before Ordering Checklist

Before ordering a hot water system, confirm:

Current system type
Current system size
Whether the old system ran out of hot water
Number of people in the home
Number of bathrooms
Shower habits
Peak hot water demand
Electric, natural gas or LPG availability
Correct gas type where relevant
Electrical requirements
Gas pipe sizing for instant gas
Water pressure
Heat pump airflow and drainage
Outdoor or indoor suitability
Access for delivery and installation
Drainage and overflow requirements
Whether new valves may be needed
Whether old unit removal is included
Whether disposal is included
Whether rebates or STCs may apply
Whether supply-only affects rebate eligibility
Whether supply-only or supplied-and-installed is the right option
Installer confirmation before buying supply only

Frequently Asked Questions

What is the best hot water system?

The best hot water system depends on your household size, bathrooms, shower habits, energy source and installation location. Electric, gas, instant gas, heat pump and solar systems all suit different homes.

Is electric or gas hot water better?

Electric hot water can suit homes without gas or simple replacements. Gas hot water can suit homes already set up for natural gas or LPG. Natural gas and LPG systems are not interchangeable.

Are heat pump hot water systems worth it?

A heat pump may be worth considering if your home has suitable outdoor space, airflow, condensate drainage, electrical supply and noise placement. It may reduce electricity use compared with standard electric storage in the right location.

Is solar hot water better than heat pump hot water?

It depends on the property. Solar hot water needs suitable roof space, sun exposure and booster planning. Heat pumps need suitable outdoor space, airflow, drainage and electrical supply.

What size hot water system do I need?

The right size depends on people in the home, bathrooms, shower habits, bath use, peak demand and whether the old system ran out. Common options include 250L, 315L and 400L electric storage, 200L–280L heat pumps and 16L to 26L instant gas systems.

Is instant gas hot water good for families?

Instant gas can suit some families where the system is correctly sized and the property has suitable gas supply and water pressure. Larger homes often compare 26L systems.

Can I use LPG with a natural gas hot water system?

No. Natural gas and LPG systems are different. Always select the correct gas type.

Does supply-only hot water pricing include installation?

No. Supply-only generally means the product only unless installation is selected or clearly shown. Installation, valves, electrical work, gas work, pipework, drainage, removal, disposal and compliance upgrades are usually separate.

Can I install a hot water system myself?

No. Hot water systems involve plumbing, gas, electrical work, water pressure, valves, drainage and compliance requirements. Use licensed trades where required.

Final Word

The best hot water system is the one that suits your home, not just the one with the lowest price or biggest brand name. Electric storage can suit simple replacements. Gas storage and instant gas can suit homes already set up for natural gas or LPG. Heat pumps can suit energy-focused homes with suitable outdoor locations. Solar can suit homes with suitable roof conditions. Instant electric can suit small point-of-use applications.

Before ordering supply only through Installed Today, confirm the selected product with your licensed installer. If choosing a supplied-and-installed option in an eligible Brisbane or Gold Coast service area, check exactly what is included before placing the order.

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