Hot Water Heater Systems: How to Choose the Best System for Your Home

Oct 5, 2024

Choosing between hot water heater systems can be confusing because every home has different hot water needs. Electric storage, gas storage, instant gas, instant electric, heat pump and solar hot water systems all work differently, and the best option depends on your household size, bathrooms, shower habits, energy source, installation location, budget and long-term running cost goals.

The right hot water heater system should provide enough hot water without being oversized, expensive to run or unsuitable for the property. A cheap upfront unit is not always the best value if it runs out of hot water, needs extra installation work or costs more to operate over time.

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 the Best Hot Water Heater System?

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

As a general guide:

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

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

What Is a Hot Water Heater System?

A hot water heater system heats water for showers, baths, kitchen use, laundry and household cleaning.

Some systems store hot water in a tank. Others heat water only when a hot tap is turned on.

The main types are:

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

Each system has different upfront costs, running costs, space requirements and installation considerations. The best choice is not just about the brand or price. It is about matching the system to the home.

Electric Hot Water Heater Systems

Electric hot water systems are one of the most common options in Australian homes. They use an electric element to heat water inside a storage tank.

Electric storage systems can suit:

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

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

A 250L electric system may suit many smaller households, while larger families or high-demand homes may need 315L or 400L. If your old unit was already running out of hot water, replacing it with the same size may repeat the same issue.

Gas Hot Water Heater Systems

Gas hot water systems can suit homes already set up for natural gas or LPG. They are commonly available as gas storage systems or instant gas systems.

Gas hot water can suit homes that:

Already have natural gas or LPG available
Want fast hot water recovery
Prefer gas over electric storage
Have suitable outdoor installation space
Want to compare storage and continuous flow options
Have household demand that suits gas hot water

Gas work must be completed by a licensed gas fitter. Natural gas and LPG units 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 be a practical option for homes that already use gas and want stored hot water ready for household use.

Common gas storage categories include 130/135L gas hot water systems, 160/170L gas hot water systems and 5-star gas hot water systems.

Product examples include the Rheem 4-Star 135L Natural Gas Hot Water System, Rheem 4-Star 135L LPG Gas Hot Water System, Vulcan 4-Star 135L Natural Gas Hot Water System, Vulcan 4-Star 135L LPG Gas Hot Water System, Vulcan 4-Star 170L Natural Gas Hot Water System, Rheem Stellar 330 Natural Gas Hot Water System and Rheem Stellar 360 Natural Gas Hot Water System.

Gas storage may be suitable where the home already has the right gas setup and the household prefers a tank-style system.

Instant Gas Hot Water Heater Systems

Instant gas hot water systems, also called continuous flow or tankless gas systems, heat water as it passes through the unit.

They do not store a full tank of hot water.

Instant gas can suit homes that:

Want continuous flow hot water
Want to save space compared with a large tank
Have suitable natural gas or LPG supply
Have enough water pressure
Have suitable outdoor wall space
Want to compare 16L, 20L and 26L options

Larger households often compare 26L instant gas hot water systems, but a 26L unit only performs properly if gas pipe sizing and water pressure support it.

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

Instant Electric Hot Water Systems

Instant electric hot water systems heat water on demand without storing hot water in a tank.

They may suit:

Small sinks
Compact kitchens
Offices
Granny flats
Low-demand fixtures
Point-of-use hot water

Instant electric systems can require significant electrical capacity. They are not always suitable for whole-home hot water or multiple showers. A licensed electrician or installer should confirm suitability before ordering.

Heat Pump Hot Water Heater 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 homes wanting a more energy-efficient electric-style upgrade.

Heat pumps can suit homes that:

Want to reduce hot water energy use
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 heating with rooftop solar where timing and usage suit

A heat pump is not automatically best for every home. It needs the right location, airflow, access, drainage and noise placement.

Many homes compare medium heat pump hot water systems 200L–280L, while larger households may need large heat pump hot water systems. Customers wanting app or timer features may also compare Wi-Fi enabled heat pump hot water systems.

Solar Hot Water Heater Systems

Solar hot water systems use roof-mounted collectors to capture heat from the sun and transfer that heat to the water. They usually include an electric or gas booster for cloudy weather or high-demand periods.

Solar hot water can suit homes with:

Suitable roof space
Good sun exposure
Minimal shading
Suitable roof orientation
Long-term energy efficiency goals
Space for the tank and collector arrangement
A booster setup that suits the household

Solar hot water can reduce grid energy use where conditions are right, but it is not always the simplest replacement. Roof suitability, shading, booster type, maintenance and upfront cost all matter.

For some homes, a heat pump may be easier to compare than roof-mounted solar hot water, especially where roof space, shading or installation complexity are concerns.

Storage vs Continuous Flow Hot Water Systems

Hot water heater systems are often grouped into storage and continuous flow systems.

System Type	How It Works	Common Options
Storage hot water	Heats and stores water in a tank	Electric storage, gas storage, heat pump, solar storage
Continuous flow hot water	Heats water as it passes through the unit	Instant gas, instant electric
Point-of-use hot water	Heats water near a specific fixture	Some instant electric systems
Solar boosted hot water	Uses solar collectors with electric or gas boost	Solar hot water systems

Storage systems can suit homes needing a stored supply of hot water. Continuous flow systems can suit homes wanting compact on-demand hot water where the energy source and site conditions support it.

Electric vs Gas vs Heat Pump vs Solar

System Type	Best Suited To	Key Considerations
Electric storage	Simple replacement, homes without gas	Running cost depends on tariff and usage
Gas storage	Homes with natural gas or LPG wanting stored hot water	Correct gas type and licensed gas fitting required
Instant gas	Continuous flow hot water and compact outdoor installation	Gas pipe sizing and water pressure must support the unit
Instant electric	Small point-of-use applications	Whole-home use may require significant electrical capacity
Heat pump	Efficiency-focused homes with suitable outdoor space	Needs airflow, drainage, access and noise planning
Solar hot water	Homes with suitable roof space and sun exposure	Booster setup, roof conditions and upfront cost need checking

The best system is the one that suits the home, not just the one with the lowest purchase price.

Choosing the Right Size Hot Water Heater System

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

A system that is too small may run out during peak use. A system that is too large may cost more than needed and may not suit the household’s usage pattern.

When choosing size, consider:

Number of people in the home
Number of bathrooms
Shower length
Bath use
Kitchen and laundry habits
Whether multiple showers run at once
Morning and evening peak demand
Existing system size
Whether the old system ran out of hot water
Available energy source
Recovery rate
Installation space

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

For heat pumps, many homes compare 250L to 280L systems, with larger households considering 280L-plus options.

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

Choosing by Household Type

Small Households

Small households may suit:

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

Avoid oversizing unless the household has high shower use, baths or future growth.

Family Homes

Family homes often need careful sizing because hot water use can peak in the morning and evening.

Common options include:

250L electric storage
315L electric storage
Medium heat pump systems
20L instant gas
26L instant gas
Gas storage where suitable

If the existing system regularly runs out, review the size and system type before ordering a replacement.

Larger or High-Demand Homes

High-demand homes may need:

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

Do not choose a larger system without confirming the site can support it.

Installation Requirements to Check Before Ordering

A hot water heater system must suit the property’s plumbing, electrical, gas and drainage conditions. Installation requirements can change the real cost of a replacement.

Before ordering, confirm:

Correct system type
Correct size or flow rate
Correct gas type if choosing gas
Electrical requirements if choosing electric or heat pump
Gas pipe sizing if choosing instant gas
Water pressure
Installation location
Access for delivery and installation
Drainage and overflow points
Tempering valve requirements
Pressure limiting valve requirements
Expansion control valve requirements
Existing pipework condition
Frost exposure where relevant
Heat pump airflow and noise placement
Whether compliance upgrades are needed

Hot water systems involve plumbing, water pressure, gas and electrical safety. Use licensed trades where required.

What Is Not Included in Supply-Only 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
Pipework changes
Drainage changes
Tempering valve upgrades
Pressure limiting valve upgrades
Expansion control valves
Condensate drainage for heat pumps
Old unit removal
Disposal
Compliance upgrades
Concrete bases or slab work
Relocation of the system

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 product
You know the right size and model
The correct gas type has been selected
Electrical requirements have been checked
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, location and installation requirements.

Energy Efficiency and Running Costs

Running costs vary by energy source, household usage, tariff, system type and installation quality.

To improve long-term value, compare:

Purchase price
Expected running cost
System size
Energy source
Heat loss
Recovery rate
Suitability for off-peak power
Suitability for rooftop solar timing
Maintenance requirements
Rebate or STC eligibility
Installation complexity

A cheaper electric storage unit may be affordable upfront, but a heat pump may be worth comparing if energy use matters and the location is suitable.

Gas can suit homes already set up for natural gas or LPG, but gas type, pipe sizing and water pressure must be checked.

Solar can offer strong efficiency where roof conditions suit, but upfront cost and booster planning matter.

Rebates, STCs and Incentives

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

These incentives can change, so check current eligibility before ordering or budgeting around a rebate.

A rebate may improve the value of an upgrade, but the system still needs to suit the household and installation location. Do not choose a product only because it has an incentive attached.

Maintenance and Long-Term Performance

Hot water heater systems need appropriate maintenance to perform safely and efficiently. Maintenance requirements depend on system type, water quality, manufacturer instructions and installation location.

General maintenance considerations include:

Checking for leaks
Watching for rust or corrosion
Keeping the area around the system clear
Following manufacturer servicing guidance
Checking visible pipework and valves
Ensuring heat pump airflow remains clear
Checking condensate drainage for heat pumps
Checking gas systems through a licensed gas fitter
Using a licensed electrician for electrical faults
Replacing valves or anodes where required

Do not attempt plumbing, gas or electrical repairs yourself.

Signs You May Need a New Hot Water Heater System

You may need to replace your hot water heater system if:

The tank is leaking
Hot water runs out regularly
Water temperature is unreliable
Rust or corrosion is visible
Hot water is discoloured
The system is noisy
Repairs are becoming frequent
The unit no longer suits your household
Running costs have increased without another clear cause
The system is old and no longer performing well

If the existing system was undersized, inefficient or poorly located, do not automatically replace it with the same unit.

Brand Options to Compare

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

Brand matters, but the right system type, size, installation location, gas type and site suitability matter more than brand alone.

Brisbane and Gold Coast Considerations

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

Common local considerations include:

Older electric storage replacements
Homes comparing electric storage with heat pump upgrades
Natural gas vs LPG availability
Outdoor gas unit positioning
Tight side access
Drainage and overflow points
Heat pump airflow and noise placement
Solar-friendly heat pump timing
Ageing valves and pipework
Larger family hot water demand

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

Common Mistakes When Choosing Hot Water Heater Systems

Choosing Only by Product Price

The cheapest unit upfront may not be the cheapest system long term. Running costs, installation requirements and system suitability all matter.

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 units are not interchangeable. Always choose the correct gas type.

Choosing 26L Instant Gas Without Checking the Site

A 26L instant gas system can suit some family homes, but only where gas pipe sizing and water pressure support it.

Choosing Heat Pump Without Checking Location

Heat pumps need airflow, outdoor space, drainage, access 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 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 heater system, confirm:

Number of people in the home
Number of bathrooms
Shower habits
Peak hot water demand
Existing system type
Existing system size
Whether the old system ran out of hot water
Electric, natural gas or LPG availability
Correct gas type
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 rebates or STCs may apply
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 heater system?

The best hot water heater system depends on your home. Electric storage, gas storage, instant gas, instant electric, heat pump and solar systems all suit different households and installation conditions.

What is the cheapest hot water heater system?

Electric storage is often one of the cheapest systems upfront, but running costs may be higher than heat pump or gas options depending on the home, tariff and usage.

What is the most efficient hot water heater system?

Heat pump and solar hot water systems can be highly efficient where the home suits the technology. The most efficient choice depends on location, usage, installation conditions and system setup.

Is gas or electric hot water better?

Gas can suit homes already set up for natural gas or LPG. Electric can suit homes without gas or customers wanting a straightforward replacement. Natural gas and LPG systems are not interchangeable.

Is instant gas hot water good for families?

Instant gas can suit families where the system is correctly sized and the property has suitable gas supply and water pressure. Many larger households compare 26L instant gas systems.

Is a heat pump hot water system worth it?

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

What size hot water heater 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, 250L to 280L heat pumps and 16L to 26L instant gas systems.

Can I install a hot water heater system myself?

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

Does supply-only 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.

Final Word

Hot water heater systems all have different strengths. 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. Instant electric can suit small point-of-use applications. Solar can suit homes with strong roof suitability and booster planning.

The best system is not just the cheapest or most popular model. It is the one that suits your household demand, energy source, installation location and long-term running cost expectations.

Before ordering supply only, confirm the size, model, gas type, electrical requirements, access, drainage and compliance needs with your licensed installer. That way, your hot water heater system is matched properly to the home before it arrives.

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