Heat Pump vs Gas Hot Water: Which Should You Choose?

Heat pump and gas hot water systems can both suit Australian homes, but they work in very different ways. A heat pump uses electricity to move heat from the air into the water. A gas hot water system uses natural gas or LPG to heat water, either through a storage tank or an instant gas unit.

The better choice depends on your home, available energy supply, hot water use, installation location, solar power, running-cost goals, and whether the property already has suitable gas.

This guide compares heat pump vs gas hot water systems, including running costs, installation requirements, household suitability, natural gas vs LPG, instant gas vs storage gas, and what to check before ordering.

Quick answer: heat pump vs gas hot water

A heat pump hot water system is usually the stronger option where the home has solar power, good outdoor airflow, suitable drainage, and the household wants efficient electric hot water.

A gas hot water system can still be the better choice where the property already has suitable natural gas or LPG, the existing gas installation is compliant, fast recovery is important, or heat pump placement is not practical.

You can compare Heat Pump Hot Water Systems, Gas Hot Water Systems, or browse all Hot Water Systems.

What is a heat pump hot water system?

A heat pump hot water system stores hot water in a tank and uses heat pump technology to move heat from the surrounding air into the water.

It still uses electricity, but instead of relying only on an electric resistance element, it uses a compressor, fan and refrigerant circuit to heat the water more efficiently.

Heat pumps are commonly considered for:

• Homes replacing electric storage systems

• Homes with solar power

• Households wanting efficient electric hot water

• Properties with suitable outdoor space

• Homes where natural gas is not available

• Households wanting to move away from gas

• Family homes with suitable tank sizing

A heat pump must be installed in a suitable location with correct airflow, condensate drainage, noise placement, electrical supply and service access.

What is a gas hot water system?

A gas hot water system uses natural gas or LPG to heat water.

There are two main residential types:

Gas hot water is commonly considered for:

• Homes already connected to natural gas

• Properties already using LPG

• Like-for-like gas replacements

• Homes wanting fast hot water recovery

• Homes where a heat pump location is not suitable

• Properties with existing compliant gas pipework and location

Natural gas and LPG are not interchangeable. The appliance must match the gas type, and all gas work must be completed by a licensed gas fitter.

Heat pump vs gas hot water comparison

Running costs: heat pump vs gas

A heat pump usually has the strongest running-cost potential where it is installed correctly, sized properly and set to operate efficiently. Homes with solar power may be able to run the heat pump during the day to use solar generation.

Gas running costs depend on:

• Natural gas or LPG pricing

• Household hot water use

• Gas appliance efficiency

• Storage vs instant gas type

• Pipe sizing and setup

• Shower flow rates

• Temperature settings

• Whether other gas appliances are connected

LPG can be more expensive to run than natural gas depending on supply cost and usage. Natural gas may be more convenient where the home is already connected, but it still needs a suitable gas appliance and pipework.

Heat pumps can perform well for running costs, but poor setup can reduce savings. A heat pump that is undersized, poorly placed, or relying heavily on boost heating may not deliver the result expected.

Solar power: heat pump vs gas

Heat pumps can work well with solar PV because they can often be timed to heat during the day when solar generation is available.

This can be useful if:

• The home has rooftop solar

• The heat pump has timer control

• The tank is large enough to carry evening and morning demand

• The system has enough time to recover during the solar window

• The household uses hot water in a predictable pattern

Gas hot water is not directly powered by solar PV. It may still suit the home, but solar power does not offset gas usage in the same direct way.

If you have solar and suitable outdoor space, a Heat Pump Hot Water System is usually worth comparing carefully.

Natural gas vs LPG

Natural gas and LPG must be separated when choosing gas hot water.

A natural gas hot water system must be connected to natural gas. An LPG hot water system must be connected to LPG. Do not assume a natural gas model can be used on LPG, or that an LPG model can be used on natural gas.

Before ordering gas hot water, confirm:

• The property’s gas type

• The appliance gas type

• Gas pipe sizing

• LPG bottle and regulator setup where relevant

• Whether other gas appliances are connected

• Installation location and clearances

• Whether a licensed gas fitter is completing the work

This is especially important when changing from storage gas to instant gas or upgrading to a larger-capacity appliance.

Gas storage vs instant gas

If you are comparing heat pump vs gas, you also need to know what type of gas system you mean.

Gas storage

Gas storage hot water systems keep hot water in a tank. Common sizes include 135L and 170L.

Gas storage may suit:

• Like-for-like replacements

• Homes where the old gas storage unit performed well

• Properties with suitable space for a tank

• Households wanting stored hot water with fast gas recovery

Instant gas

Instant gas systems heat water as it passes through the unit. Common sizes include 16L, 20L and 26L.

Instant gas may suit:

• Homes wanting continuous hot water

• Properties with suitable gas pipe sizing

• Homes with good water pressure and flow

• Properties where a storage tank is not preferred

• Family homes needing higher gas flow capacity

Instant gas performance depends heavily on gas supply, water pressure, temperature rise and how many outlets are used at once.

You can compare options in Instant Gas Hot Water Systems.

When a heat pump may be the better choice

A heat pump may be the better choice if:

• The home has suitable outdoor space

• Airflow around the unit will be good

• Condensate can drain properly

• Noise placement is acceptable

• The home has solar power

• You want efficient electric hot water

• The household has moderate-to-high hot water use

• Natural gas is not available

• You want to reduce reliance on gas

• The tank can be sized correctly for household demand

Heat pumps often make sense where installation conditions are right and the home can take advantage of efficient electric heating.

When gas hot water may be the better choice

Gas hot water may be the better choice if:

• The home already has suitable natural gas or LPG

• The existing gas hot water location is compliant

• The old gas system performed well

• Fast recovery is important

• A heat pump location is not practical

• Airflow is poor around the available installation area

• Noise placement would be difficult for a heat pump

• Condensate drainage is not practical

• The home is already set up for gas appliances

Gas can be a practical option where the property is already properly set up for it, but the correct gas type and pipe sizing must be confirmed.

Heat pump recovery vs gas recovery

Recovery means how quickly the system can heat more water after hot water has been used.

Heat pump recovery depends on:

• Heat pump model

• Tank size

• Air temperature

• Airflow

• Timer settings

• Boost element operation

• Installation location

• Household usage pattern

Gas recovery depends on:

• Gas appliance size

• Burner capacity

• Gas pipe sizing

• Natural gas or LPG supply

• Water pressure

• Storage tank size or instant gas L/min rating

• Simultaneous outlet use

Gas systems often have fast recovery, especially where the gas supply is suitable. Heat pumps can be efficient, but they need enough stored capacity and recovery time to match the household’s use.

Heat pump sizing vs gas sizing

Heat pump systems are usually sized by tank capacity.

Common heat pump sizes include:

Gas storage is also sized by tank capacity, commonly 135L or 170L.

Instant gas is different. It is sized by litres per minute, commonly 16L, 20L or 26L.

These are only starting points. Shower habits, baths, guests, bathrooms, timer settings and installation conditions all matter.

Heat pump vs gas for small households

For one or two-person homes, the best option depends on the existing setup.

A heat pump may suit if:

• There is suitable outdoor space

• Solar power is available

• Hot water use is regular enough to justify the system

• Noise and drainage can be managed

• The household wants efficient electric hot water

Gas may suit if:

• The property already has natural gas or LPG

• The existing gas system worked well

• The replacement can be done compliantly

• A heat pump location is not suitable

For very low-use households, upfront cost and installation simplicity may matter more than maximum efficiency.

Heat pump vs gas for family homes

For family homes, both options can work.

A heat pump may suit families where:

• The tank is sized correctly

• There is good outdoor airflow

• Solar-timed heating is possible

• Noise placement is suitable

• Condensate drainage is available

• The household wants lower electricity use than standard electric storage

Gas may suit families where:

• The property has suitable natural gas or LPG

• Gas pipe sizing can support the appliance

• Instant gas flow or gas storage recovery suits demand

• The household wants fast recovery

• The heat pump location would be poor

For larger families, sizing matters more than system type alone.

Heat pump vs gas for rental properties

For rental properties, the right choice should balance upfront cost, running costs, tenant expectations, installation suitability and maintenance.

A heat pump may suit rentals where:

• The site has a good installation location

• Running-cost efficiency is a selling point

• Noise will not create complaints

• Condensate drainage is simple

• The tank is sized for likely occupancy

Gas may suit rentals where:

• The property already has suitable gas

• The existing gas system is being replaced like-for-like

• The gas installation is compliant

• Tenants are likely to have high peak demand

• Heat pump placement is not practical

Avoid undersizing rental systems. Hot water complaints are common when the system is too small for the likely number of occupants.

Heat pump vs gas for units and townhouses

Units and townhouses need extra care.

Before choosing a heat pump, check:

• Body corporate rules

• Noise impact

• Outdoor space

• Condensate drainage

• Service access

• Delivery access

• Electrical supply

• Whether the installation area has suitable airflow

Before choosing gas, check:

• Gas type

• Gas pipe sizing

• Appliance location

• Flueing or ventilation requirements where applicable

• Clearances

• Access

• Body corporate requirements

• Whether a licensed gas fitter can complete the work compliantly

In some units, a simple like-for-like system may be more practical than changing system type.

Heat pump vs gas where there is no natural gas

If the property does not have natural gas, the gas option is usually LPG.

LPG hot water can work well where the installation is designed properly, but you need to consider:

• Bottle storage location

• Regulator setup

• Delivery access for bottles

• LPG running cost

• Appliance gas type

• Gas pipe sizing

• Compliance clearances

• Other LPG appliances

Where the home has no natural gas and has suitable heat pump placement, a heat pump may be worth comparing carefully before choosing LPG.

Heat pump vs gas where there is existing natural gas

If the home already has natural gas, gas hot water may be a practical replacement option.

However, do not assume the existing pipework suits every new gas unit. This is especially important when:

• Changing from storage to instant gas

• Installing a larger instant gas unit

• Adding other gas appliances

• Moving the hot water system

• Changing the installation location

• Replacing a very old gas system

A heat pump may still be worth considering if the home has solar, suitable outdoor space and the household wants efficient electric hot water.

Installation and compliance reminders

Heat pump, gas and electric hot water installation is not DIY work.

Use a licensed plumber for plumbing work, a licensed gas fitter for gas work, and a licensed electrician for electrical work where required.

Important heat pump checks may include:

• Tank size and dimensions

• Airflow clearances

• Condensate drainage

• Noise placement

• Electrical circuit suitability

• Timer setup

• Solar timing

• Water pressure

• Tempering valve requirements

• Pressure relief discharge

• Base or slab requirements

• Service access

Important gas checks may include:

• Correct natural gas or LPG model

• Gas pipe sizing

• Water pressure and flow

• Storage vs instant gas suitability

• Flueing or ventilation requirements where applicable

• Appliance location and clearances

• LPG bottle and regulator setup

• Tempering valve requirements

• Isolation valves

• Compliance requirements

Extra parts or site work may be required depending on the property. Relevant options may be available under Installation Add-Ons.

Supply-only vs supplied-and-installed

Installed Today offers hot water systems online with supply-only options across major metro areas.

For supply-only orders, you need to arrange your own suitable licensed installer. Heat pump systems involve plumbing, drainage and electrical requirements. Gas hot water systems involve plumbing and licensed gas fitting. Electrical work must be completed by a licensed electrician where required.

Supplied-and-installed options are only available where shown in eligible Brisbane and Gold Coast service areas. Availability depends on the product, location and installation conditions shown at the time of ordering.

Before ordering, confirm the system type, gas type, size, electrical suitability, installation location and any required add-ons.

Common mistakes when choosing heat pump vs gas

Choosing heat pump without checking airflow

A heat pump needs suitable airflow. Poor placement can affect performance.

Forgetting condensate drainage

Heat pumps produce condensate, and that water needs a suitable drainage point.

Placing a heat pump too close to bedrooms

Noise placement matters for both your home and neighbours.

Choosing gas without checking gas type

Natural gas and LPG are not interchangeable. The appliance must match the gas supply.

Ignoring gas pipe sizing

Instant gas and larger gas appliances may need suitable gas pipework to operate correctly.

Assuming gas is always cheaper to run

Gas running cost depends on natural gas or LPG pricing, appliance type, usage and supply charges.

Assuming heat pump suits every home

Heat pumps need suitable location, airflow, drainage, electrical setup and recovery time.

Replacing like-for-like when the old system was too small

If the old system regularly ran out, choose the replacement around current household demand.

Final verdict

A heat pump hot water system is often the better long-term choice where the home has suitable airflow, condensate drainage, noise placement, electrical supply, solar timing potential and enough space for the correct tank size.

A gas hot water system may be the better choice where the property already has suitable natural gas or LPG, the existing gas setup is compliant, fast recovery is important, or the site does not suit heat pump installation.

The best choice depends on household demand, solar power, natural gas or LPG availability, gas pipe sizing, heat pump placement, drainage, noise, recovery time, installation access and budget.

FAQs

Is heat pump hot water better than gas?

A heat pump can be better where the home has suitable airflow, drainage, electrical supply and solar timing potential. Gas may be better where the property already has suitable gas and heat pump placement is not practical.

Is gas hot water cheaper than heat pump?

It depends on natural gas or LPG pricing, hot water use, system type, efficiency, supply charges and installation conditions. Heat pumps often have strong running-cost potential where installed correctly, especially with solar.

Can I replace gas hot water with a heat pump?

Often yes, but the site must suit a heat pump. Airflow, condensate drainage, noise placement, electrical supply, tank size and access need to be checked.

Can I replace a heat pump with gas hot water?

Yes, if the property has suitable natural gas or LPG and the gas installation can be completed compliantly. Gas pipe sizing and appliance location must be checked.

Is LPG hot water the same as natural gas hot water?

No. LPG and natural gas systems are not interchangeable. The appliance must match the gas type and be installed by a licensed gas fitter.

Is instant gas better than a heat pump?

Instant gas may suit homes wanting continuous hot water where gas pipe sizing and water flow are suitable. A heat pump may suit homes wanting efficient electric hot water with suitable outdoor placement.

Does a heat pump need solar?

No. A heat pump can run without solar. Solar can help if the system is timed to heat during solar production hours.

Does a heat pump need a drain?

Yes. Heat pumps produce condensate, and that water needs suitable drainage.

Do gas hot water systems need electricity?

Some gas hot water systems require electricity for ignition, controls or fans. Electrical requirements depend on the model.

Where can I compare heat pump and gas hot water systems?

You can compare Heat Pump Hot Water Systems, Gas Hot Water Systems, Instant Gas Hot Water Systems, or browse all Hot Water Systems.