Continuous Hot Water System: Instant Gas, Instant Electric and Other Options Explained

Oct 27, 2024

A continuous hot water system heats water as it is needed instead of storing a full tank of hot water. These systems are often called instant hot water systems, tankless water heaters or on-demand hot water systems.

For most Australian homes, the main continuous hot water option is an instant gas hot water system. Selected instant electric hot water systems can also suit smaller point-of-use applications, such as sinks, kitchenettes, offices and low-demand fixtures.

The right system depends on your household size, number of bathrooms, shower habits, natural gas or LPG supply, water pressure, gas pipe sizing, electrical capacity and installation location.

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

Quick Answer: What Is a Continuous Hot Water System?

A continuous hot water system heats water only when a hot tap is turned on. It does not store hot water in a tank.

As a general guide:

Instant gas hot water systems are the most common whole-home continuous hot water option
Instant electric hot water systems are usually better suited to point-of-use or smaller applications
Continuous hot water systems do not store a large tank of hot water
Natural gas and LPG systems are different and not interchangeable
Larger instant gas systems need suitable gas pipe sizing and water pressure
Instant electric systems can require significant electrical capacity
External gas units are outdoor units unless the specific model is approved for internal flued installation
Supply-only pricing usually covers the product only

Before ordering supply only, confirm the selected system, flow rate, gas type, electrical requirements, water pressure, access, clearances, valves and installation suitability with your licensed installer.

How a Continuous Hot Water System Works

A continuous hot water system activates when hot water demand begins.

The basic process is:

A hot tap or shower is turned on
The unit detects water flow
The burner or heating element activates
Cold water passes through the unit
Water is heated as it flows through
Hot water travels to the fixture
The system turns off when demand stops

This is different from a storage hot water system, which heats and stores water in a tank until it is needed.

Continuous Hot Water vs Storage Hot Water

System Type	How It Works	Best Suited To
Continuous hot water	Heats water as it flows through the unit	Homes wanting instant gas or point-of-use electric hot water
Electric storage	Stores hot water in a tank using an electric element	Simple replacements and homes without gas
Gas storage	Stores hot water in a tank using natural gas or LPG	Homes already using gas that want stored hot water
Heat pump hot water	Uses air heat to help heat stored water	Energy-focused homes with suitable outdoor space
Solar hot water	Uses roof collectors and a booster	Homes with suitable roof space and sun exposure

Continuous hot water systems can be compact and efficient when correctly selected, but they still need the right supply, flow rate and installation conditions.

Main Types of Continuous Hot Water Systems

The two main continuous hot water options are:

Instant gas hot water systems
Instant electric hot water systems

They are not suitable for the same situations. Instant gas is commonly used for whole-home hot water. Instant electric is usually more relevant for small fixtures or point-of-use applications unless the property has suitable electrical capacity.

Instant Gas Continuous Hot Water Systems

Instant gas hot water systems are also called continuous flow gas hot water systems. They heat water as it passes through the unit, without storing a full tank of hot water.

Instant gas may suit homes that:

Want continuous flow hot water
Already have natural gas or LPG
Have suitable gas pipe sizing
Have suitable water pressure
Have outdoor wall space
Want a compact alternative to a storage tank
Are replacing an existing instant gas unit

Common instant gas sizes include 16L, 20L and 26L. The best size depends on household demand and site conditions.

16L Continuous Hot Water Systems

A 16L instant gas hot water system may suit smaller homes or lower-demand hot water applications.

It may suit:

One-bathroom homes
Smaller households
Lower shower demand
Replacing an existing 16L unit
Properties where gas supply or water pressure does not support a larger model

Relevant options include:

20L Continuous Hot Water Systems

A 20L instant gas hot water system may suit small-to-medium households with moderate hot water demand.

It may suit:

Smaller families
Moderate shower use
One-to-two bathroom homes, depending on usage
Replacing an existing 20L unit
Homes where a 26L unit is not required or not supported

Relevant options include:

26L Continuous Hot Water Systems

A 26L instant gas hot water system is often compared for family homes and higher hot water demand.

It may suit:

Larger households
Higher shower demand
Some two-bathroom homes
Homes wanting continuous flow gas hot water
Replacing an existing 26L unit
Properties with suitable gas pipe sizing
Properties with suitable water pressure

Popular options include:

A 26L unit is not automatically the best choice for every home. Gas pipe sizing and water pressure must support the selected model.

Natural Gas vs LPG Continuous Hot Water

Natural gas and LPG hot water systems are different. They are not interchangeable.

Before ordering a continuous gas hot water system, confirm:

Whether the property uses natural gas or LPG
The correct model for the gas type
Whether gas bottles or gas mains are used
Existing gas pipe sizing
Distance from gas meter or bottles
Other gas appliances on the property
Whether a licensed gas fitter has confirmed suitability

Ordering the wrong gas type can make the unit unsuitable for the property.

Instant Electric Continuous 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 systems can have high electrical requirements, especially if used for showers or higher flow rates. They are not always suitable for whole-home hot water.

Before ordering an instant electric unit, confirm:

Electrical capacity
Circuit requirements
Switchboard suitability
Flow rate
Intended fixture use
Water pressure
Installation location
Whether a licensed electrician is needed

Continuous Hot Water vs Electric Storage

Electric hot water systems store hot water in a tank. A continuous hot water system heats water as it flows through the unit.

Electric storage may suit homes that:

Want a simple like-for-like replacement
Do not have gas
Need stored hot water
Have suitable space for a tank
Want familiar electric storage operation

Continuous hot water may suit homes that:

Want a compact system
Have suitable gas or electrical supply
Want continuous flow from an instant gas unit
Want point-of-use hot water for a small fixture
Do not want a large storage tank

Common electric storage categories include:

If your home has no gas and needs whole-home hot water, electric storage or heat pump hot water may be more suitable than instant electric.

Continuous Hot Water vs Heat Pump Hot Water

A heat pump hot water system is not a continuous hot water system. It stores hot water in a tank and uses heat from the surrounding air to help heat the water.

Heat pump hot water may suit homes that:

Are replacing older electric storage
Want to reduce hot water electricity use
Have suitable outdoor space
Have clear airflow
Can manage condensate drainage
Have suitable electrical supply
Want to pair hot water operation with rooftop solar where timing suits

Many homes compare:

A heat pump may be more suitable than continuous hot water where the home has no gas and needs a whole-home electric-style hot water option.

Continuous Hot Water vs Gas Storage

Gas storage and instant gas systems both use natural gas or LPG, but they work differently.

System Type	How It Works	Best Suited To	Key Checks
Gas storage	Heats and stores hot water in a tank	Homes wanting stored gas hot water	Tank size, gas type, valves, drainage
Instant gas	Heats water as it flows through the unit	Homes wanting continuous flow gas hot water	Flow rate, gas pipe sizing, water pressure

Gas storage can suit homes that want a tank-style replacement. Instant gas can suit homes wanting a compact continuous flow system where the gas and water supply support it.

Gas storage categories include:

Benefits of Continuous Hot Water Systems

No Large Storage Tank

A continuous hot water system does not need a large storage tank. Instant gas systems are commonly wall-mounted outdoors, making them compact compared with storage tanks.

Heats Water Only When Needed

Continuous systems heat water when a hot tap is turned on. This avoids keeping a full tank hot all day.

Continuous Flow Potential

A correctly sized instant gas system can provide continuous flow hot water within the unit’s capacity and the property’s gas and water supply limits.

Practical for Some Replacements

If your home already has instant gas hot water and it has worked well, replacing it with a similar system may be practical where the site still complies and the new unit suits demand.

Space-Saving Design

Instant gas systems can suit properties where a large storage tank is not ideal, provided there is suitable outdoor wall space and correct clearances.

Limitations of Continuous Hot Water Systems

Continuous hot water systems are not perfect for every home.

Potential limitations include:

Instant gas systems need suitable gas pipe sizing
Larger units need suitable water pressure
Natural gas and LPG models are different
Gas work must be completed by a licensed gas fitter
External gas units must not be installed indoors unless approved as internal flued models
Instant electric systems can have high electrical requirements
Some homes may notice a short delay before hot water reaches fixtures
Multiple simultaneous outlets can exceed the system’s capacity
Temperature controllers may be extra depending on the model
Some systems may require electrical connection for ignition or controls

The system must suit your actual household usage and installation conditions.

Can a Continuous Hot Water System Run Multiple Showers?

It depends on the system size, flow rate, water pressure, gas supply and shower demand.

For instant gas systems, key factors include:

Unit capacity
Incoming water temperature
Gas pipe sizing
Water pressure
Shower flow rate
Number of bathrooms
Whether showers run at the same time
Distance from the unit to fixtures

A 26L instant gas system may suit some homes with higher demand, but only where the gas and water supply support it. A licensed gas fitter should confirm suitability before ordering.

Indoor vs Outdoor Continuous Hot Water Systems

Most external gas hot water units are designed for outdoor installation.

Do not install an external gas unit indoors unless the specific model is approved for internal flued installation.

Before ordering, confirm:

Whether the unit is external or internal flued
Required clearances
Ventilation requirements
Wall location
Flue requirements where applicable
Access for servicing
Gas supply route
Water pipe route
Electrical connection where required

Choosing the wrong unit type can create installation and compliance issues.

Installation Requirements for Continuous Hot Water Systems

Installation requirements depend on whether the system is gas or electric.

Before ordering, check:

Current system type
New system type
Natural gas or LPG supply
Correct gas model
Gas pipe sizing
Water pressure
Electrical requirements
Outdoor or indoor suitability
Clearances around the unit
Pipework route
Drainage and overflow where relevant
Access for installation
Access for future servicing
Whether new valves are needed
Whether old unit removal is included
Whether disposal is included
Whether compliance upgrades are required

Hot water systems involve plumbing, gas fitting, electrical work, water pressure, valves and drainage. Use licensed trades where required.

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

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

It does not usually include:

Installation labour
Licensed gas fitting
Electrical work
New valves
Pipework changes
Gas pipe upgrades
Drainage changes
Tempering valve upgrades
Pressure limiting valve upgrades
Expansion control valves
Old unit removal
Disposal
Compliance upgrades
Flue kits unless listed
Temperature controllers unless listed
Gas type conversion
Relocation of the system
Site assessment

Always check the product page and confirm full site requirements with your licensed installer before ordering.

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 model
The correct gas type has been selected where relevant
Gas pipe sizing has been checked
Water pressure has been checked
Electrical requirements have been checked
Outdoor location and clearances are suitable
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.

Before choosing a supplied-and-installed option, check exactly what is included and what may be extra.

Brisbane and Gold Coast Considerations

For Brisbane and Gold Coast homes, continuous hot water system selection often depends on the existing system, natural gas or LPG availability, access and outdoor wall location.

Common considerations include:

Replacing older instant gas units
Changing from gas storage to instant gas
Natural gas vs LPG availability
Gas pipe sizing for 26L systems
Water pressure
Outdoor wall location
Clearances near windows and doors
Existing valve condition
Electrical connection for ignition or controls
Old unit removal and disposal
Whether supplied-and-installed options are available for the selected product

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.

Continuous Hot Water Brands to Compare

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

Brand matters, but correct sizing, gas type, water pressure, gas pipe sizing, electrical suitability and installation location matter more than brand alone.

Maintenance for Continuous Hot Water Systems

Continuous hot water systems need maintenance according to the manufacturer’s requirements and installation conditions.

General maintenance considerations include:

Keeping the area around the unit clear
Checking for visible leaks
Watching for rust or corrosion
Monitoring hot water temperature
Checking for unusual noises
Keeping external units clear of debris
Following manufacturer servicing guidance
Using a licensed gas fitter for gas faults or repairs
Using a licensed electrician for electrical faults

Do not attempt plumbing, gas or electrical repairs yourself.

Common Continuous Hot Water Problems

A continuous hot water system may need attention if you notice:

No hot water
Hot water cutting in and out
Inconsistent temperature
Error codes
Ignition issues
Unusual noises
Rust or corrosion
Water leaks
Poor hot water flow
Gas smell
Discoloured hot water

Gas smell or suspected gas leaks should be treated seriously. Turn off gas where safe to do so and contact a licensed gas fitter or the relevant emergency service.

Common Mistakes When Choosing a Continuous Hot Water System

Assuming Continuous Means Unlimited for Every Home

A continuous system can still be limited by flow rate, gas supply, water pressure or electrical capacity.

Choosing 26L Instant Gas Without Checking Gas Pipe Sizing

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

Ordering the Wrong Gas Type

Natural gas and LPG models are different. Always select the correct model.

Assuming Instant Electric Suits a Whole House

Instant electric systems can require significant electrical capacity and may be better suited to small point-of-use applications.

Installing an External Gas Unit Indoors

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

Comparing Supply-Only and Installed Pricing Incorrectly

A supply-only product price is not the same as a full installed price.

Not Checking Water Pressure

Poor water pressure can affect instant hot water performance.

Choosing by Brand Alone

The right system is the one that suits the home’s hot water demand and site conditions.

Before Ordering Checklist

Before ordering a continuous hot water system, confirm:

Whether you need whole-home or point-of-use hot water
Current system type
Number of people in the home
Number of bathrooms
Shower habits
Peak hot water demand
Natural gas, LPG or electric supply
Correct gas type where relevant
Required flow rate
Gas pipe sizing
Water pressure
Electrical capacity
Outdoor or indoor suitability
Required clearances
Access for installation and servicing
Whether temperature controllers are needed
Whether new valves may be needed
Whether old unit removal is included
Whether disposal is included
Whether supply-only or supplied-and-installed is the right option
Installer confirmation before buying supply only

Frequently Asked Questions

What is a continuous hot water system?

A continuous hot water system heats water only when a hot tap is turned on. It does not store a large tank of hot water.

Is continuous hot water the same as instant hot water?

Yes, in most cases. Continuous hot water may also be called instant hot water, continuous flow hot water, tankless hot water or on-demand hot water.

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.

Does continuous hot water run out?

It does not run out like a storage tank, but it can be limited by flow rate, gas supply, water pressure or electrical capacity.

Is gas or electric continuous hot water better?

It depends on the home. Instant gas is more common for whole-home continuous flow hot water. Instant electric can suit smaller point-of-use applications where electrical capacity supports it.

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

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

Can an external instant gas unit be installed indoors?

No. External gas units are designed for outdoor installation unless the specific manufacturer model is approved for internal flued installation.

Does supply-only pricing include installation?

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

Can I install a continuous hot water system myself?

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

What size continuous hot water system do I need?

The right size depends on the number of people in the home, bathrooms, shower habits, peak demand, gas pipe sizing, water pressure and whether you need whole-home or point-of-use hot water.

Final Word

A continuous hot water system can be a practical option for homes wanting hot water without a large storage tank. For whole-home use, instant gas hot water is usually the main continuous flow option to compare. For small sinks, kitchenettes and point-of-use applications, instant electric may also be worth considering where electrical capacity supports it.

The right system depends on household demand, gas type, water pressure, gas pipe sizing, electrical setup, installation location and whether you need whole-home or point-of-use hot water.

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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