How to Choose the Best Hot Water System for Your Home

Choosing the best hot water system is not just about finding the cheapest unit or picking the brand you already know. The right system depends on your household size, energy source, daily hot water use, installation location, budget, running cost goals and whether you want a simple replacement or a more efficient upgrade.

For customers comparing products online, Installed Today’s Hot Water Systems range is the best starting point. You can compare Electric Hot Water Systems, Gas Hot Water Systems, Instant Gas Hot Water Systems, Instant Electric Hot Water Systems and Heat Pump Hot Water Systems before deciding.

The best hot water system is the one that fits your home, not just the one with the best brochure.

Quick Answer

Best for simple replacement: electric storage or gas storage if your current system already suits the home

Best for lower running cost potential: heat pump hot water where the site has suitable outdoor space, airflow and drainage

Best for homes already using gas: instant gas or gas storage, depending on whether you want continuous flow or a tank

Best for small spaces or point-of-use applications: instant electric hot water where electrical requirements suit

Best for larger families: larger electric storage, large heat pump, gas storage or 26L instant gas depending on energy source and demand

Best first step: compare system type, size, running cost, installation requirements and supply-only vs supplied-and-installed options

Main mistake to avoid: replacing your old system with the same size if the old system was already running out of hot water

What Are the Main Types of Hot Water Systems?

Most Australian homes compare five main hot water system types:

electric storage hot water
instant electric hot water
gas storage hot water
instant gas hot water
heat pump hot water

Solar hot water may also be an option for some homes, but it depends heavily on roof suitability, sun exposure, household demand, booster setup and installation cost.

Each system type has strengths and trade-offs. The right choice depends on whether you want the lowest upfront cost, better long-term running cost potential, a compact system, strong recovery, simple replacement or a more efficient upgrade.

Electric Storage Hot Water Systems

Electric storage hot water systems heat water with an electric element and store it inside a tank. They are one of the most familiar hot water options and are commonly used in homes, units, townhouses and rental properties.

Installed Today’s Electric Hot Water Systems category includes compact, medium and large storage systems from brands such as Rheem, Rinnai, Dux, Vulcan and Aquamax.

Electric storage may suit homes that:

already have an electric storage system
want a simple like-for-like replacement
do not have gas available
want quiet operation
prefer a lower upfront price than many heat pumps
have space for a tank
already have a licensed installer arranged

Electric storage may not be the best choice if your main goal is lowering running costs as much as possible. A standard electric storage system will usually cost more to run than a well-matched heat pump, especially where the home has rooftop solar and a suitable outdoor location for heat pump operation.

Popular electric size categories include 250L Electric Hot Water Systems, 315L Electric Hot Water Systems and 400L Electric Hot Water Systems.

Instant Electric Hot Water Systems

Instant electric hot water systems heat water as it flows through the unit instead of storing hot water in a tank. They are commonly considered for compact spaces, smaller applications, sinks, bathrooms, units and point-of-use hot water needs.

Installed Today’s Instant Electric Hot Water Systems range is best suited to customers comparing compact electric options where storage space is limited.

Instant electric may suit:

small-space applications
point-of-use hot water
units or compact areas
low to moderate demand applications
homes where a storage tank is not practical
specific sinks or smaller bathroom setups

Instant electric is not automatically suitable for every whole-home application. Electrical supply, circuit capacity, flow rate, water temperature rise and installation requirements all need to be checked by a licensed professional.

Gas Storage Hot Water Systems

Gas storage hot water systems heat and store water inside a tank using natural gas or LPG. They are often chosen for like-for-like replacements where the home already has gas storage hot water.

Installed Today’s Gas Hot Water Systems category includes gas storage and continuous flow gas options for customers comparing natural gas and LPG systems.

Gas storage may suit homes that:

already use natural gas or LPG
are replacing an older gas storage tank
prefer a tank-style system
have moderate to high hot water demand
want familiar gas hot water operation
have a suitable outdoor installation location

The main thing to check is gas type. Natural gas and LPG models are not interchangeable. Ordering the wrong gas type can delay installation, create extra costs or require a product change.

Gas storage can be a practical option, but it should be compared against instant gas and heat pump hot water if running cost, space or energy source changes are important.

Instant Gas Hot Water Systems

Instant gas hot water systems, also called continuous flow gas systems, heat water only when a hot tap or shower is turned on. There is no large storage tank.

Installed Today’s Instant Gas Hot Water Systems category includes natural gas and LPG continuous flow systems from major hot water brands.

Instant gas may suit homes that:

already use natural gas or LPG
want continuous flow hot water
prefer a compact wall-mounted unit
are replacing an existing instant gas system
do not want a storage tank
have suitable gas supply and pipe sizing
want 16L, 20L or 26L style options depending on demand

A 26L instant gas system may suit many family homes, but bigger is not always better. The gas supply, pipe sizing, water pressure, incoming water temperature and number of simultaneous outlets all affect real-world performance.

If you are comparing larger instant gas systems, start with 26L Instant Gas Hot Water Systems.

Heat Pump Hot Water Systems

Heat pump hot water systems use electricity to draw heat from the surrounding air and transfer that heat into stored water. They are often chosen by households wanting lower running cost potential than standard electric storage.

Installed Today’s Heat Pump Hot Water Systems category includes energy-efficient options from brands such as Rheem, Rinnai, iStore, Enviroheat, Aquatech, Hydrotherm, Dux and Stiebel Eltron.

Heat pumps may suit homes that:

are replacing an older electric storage system
want lower running cost potential
have suitable outdoor space
have clear airflow around the unit
can manage condensate and relief valve drainage
have rooftop solar or may add solar later
want to move away from gas
are comfortable with fan and compressor noise

Heat pumps are more site-sensitive than standard electric storage. They need airflow, drainage, access and sensible noise placement. A heat pump installed in the wrong location may create performance or noise issues even if the product itself is good.

For typical family-sized systems, compare Medium Heat Pump Hot Water Systems 200L–280L. For higher-demand homes, compare Large Heat Pump Hot Water Systems.

Solar Hot Water Systems

Solar hot water systems use roof-mounted collectors to help heat water, usually with an electric or gas booster for cloudy days, night-time use or higher demand periods.

Solar hot water may suit homes that:

have suitable roof space
have strong sun exposure
have limited shading
use enough hot water to justify the upfront cost
have a suitable booster setup
want to reduce reliance on grid energy

Solar hot water may not suit homes with poor roof orientation, heavy shading, difficult roof access or limited roof space. In some cases, a heat pump may be a more practical energy-efficient upgrade because it does not require roof-mounted collectors.

If you are comparing solar-style efficiency options, review Installed Today’s Hot Water Systems and Heat Pump Hot Water Systems ranges before deciding.

Hot Water System Comparison Table

How to Choose the Right Size

Sizing matters as much as system type. A system that is too small may run out of hot water. A system that is too large may cost more upfront and store more hot water than the household needs.

When sizing a hot water system, consider:

how many people live in the home
how many bathrooms are used daily
whether showers are short or long
whether baths are used often
whether laundry uses hot water
whether hot water demand is mostly morning, evening or spread across the day
whether multiple outlets run at the same time
whether the old system supplied enough hot water
whether the home uses off-peak electricity
whether rooftop solar is available

A 250L electric system may suit some small to medium households. A 315L or 400L system may be better for larger families or off-peak setups. A 200L to 280L heat pump may suit many medium households, while large heat pumps over 280L may suit higher-demand homes.

For gas continuous flow, sizing is more about flow rate, gas supply, pipe sizing and simultaneous outlet use than tank capacity.

Replacing Like-for-Like: When It Makes Sense

A like-for-like replacement can make sense if your old system was the right type and size for your home.

It may be sensible when:

the old system supplied enough hot water
the energy source still suits your home
the installation location still works
you want a fast, simple replacement
the existing electrical or gas setup is suitable
you are not trying to reduce running costs significantly

For example, if your old 250L electric storage system worked well, replacing it with another 250L electric system may be practical. If your old 26L instant gas system suited the home, another 26L instant gas model may be a good fit.

But if your old system constantly ran out of hot water, cost too much to run or no longer suits the home, it is worth comparing alternatives before ordering.

When to Upgrade Instead of Replacing the Same System

An upgrade may be better than like-for-like replacement when:

the old system was too small
the home has changed since the old unit was installed
more people now live in the property
the home has added bathrooms
running costs are too high
the household now has rooftop solar
gas is no longer preferred
the old location is no longer suitable
you want a more efficient system type

Common upgrade paths include:

electric storage to heat pump
gas storage to instant gas
small electric storage to larger electric storage
standard electric storage to Rheem Stellar-style premium electric
older instant gas to a newer continuous flow gas model
electric storage to a solar-compatible heat pump setup

The right upgrade depends on budget, site conditions and household demand.

Running Costs: What Actually Affects Them?

Running costs are not based only on the product type. They are affected by how the household uses hot water and how the system is installed and set up.

Running costs depend on:

energy source
electricity tariff or gas price
household hot water use
shower length
tank size
system efficiency
timer settings
rooftop solar availability
backup element use
installation location
pipe insulation
valve condition
maintenance

Heat pumps often offer strong running cost potential, but only when the location, settings and sizing are right. Standard electric storage may cost more to run, but it can be cheaper upfront and simpler to replace. Instant gas can be compact and efficient for gas-connected homes, but performance depends on gas supply and usage.

Upfront Cost vs Long-Term Value

The cheapest system today is not always the cheapest system over time.

A cheaper electric storage unit may have a lower purchase price but higher ongoing electricity use. A heat pump may cost more upfront but may reduce electricity use over time. A premium stainless steel electric system may cost more than a standard tank but may reduce some maintenance requirements depending on the model and water quality.

When comparing value, consider:

product price
delivery cost
installation availability
required valves
electrical work
gas work
pipework changes
drainage requirements
old unit removal
access issues
compliance upgrades
running cost potential
warranty terms
maintenance needs
expected household use

A good buying decision looks at the total picture, not just the product price.

Supply Only vs Supplied and Installed

Installed Today offers supply-only ordering for customers who already have their own licensed installer arranged. Supply-only pricing is for the product only and does not include installation, valves, electrical work, gas work, pipework changes, drainage work, old unit removal, disposal or compliance upgrades unless those options are clearly selected or shown on the product page.

Supplied-and-installed options may be available on selected products in eligible Brisbane and Gold Coast service areas. Availability depends on the product, location, access, existing setup, electrical suitability, gas type, drainage, clearances, required extras and site requirements.

Before ordering supply only, make sure your licensed installer confirms the system suits your home, energy source, household demand, access, installation location, drainage, pipework and compliance requirements.

Brisbane and Gold Coast Buying Context

For Brisbane and Gold Coast homes, system choice often comes down to the existing setup, available energy source and property layout.

Local homes should check:

whether the current system is electric, gas, heat pump or solar
whether the old system supplied enough hot water
whether the property uses natural gas or LPG
whether there is outdoor space for a heat pump
whether noise may affect bedrooms or neighbours
whether drainage is suitable
whether access allows safe delivery and positioning
whether valves need replacing
whether electrical work may be required
whether gas pipe sizing is suitable
whether supply-only or supplied-and-installed is preferred

South East Queensland’s warmer climate can suit heat pump operation, but heat pumps still need the right location. Gas systems can be practical for homes already set up for gas, but natural gas and LPG must be selected correctly. Electric storage remains a common simple replacement option, but should be compared against heat pump hot water if running costs matter.

Common Mistakes When Choosing a Hot Water System

Choosing the same size when the old system was too small

If your old system ran out of hot water, replacing it with the same size may repeat the same problem.

Ordering the wrong gas type

Natural gas and LPG models are different. Always confirm your gas type before ordering.

Ignoring heat pump noise

Heat pumps are not silent. They need sensible placement away from bedrooms, neighbours and echo-prone side passages.

Forgetting about drainage

Heat pumps, storage systems and relief valves all need suitable drainage and discharge arrangements.

Only comparing upfront price

A cheaper unit may cost more over time if it uses more energy, needs more work to install or does not suit the household.

Assuming bigger is always better

Oversizing can increase upfront cost and stored heat loss. The goal is the right size, not always the largest system.

Not checking installation requirements

Access, valves, pipework, electrical supply, gas pipe sizing and compliance requirements can all affect the final result.

Before Ordering Checklist

Before ordering any hot water system, check:

current system type
current system size
natural gas, LPG or electricity availability
household size
bathroom count
shower habits
whether the old system supplied enough hot water
available installation space
access for delivery
valve requirements
drainage requirements
electrical requirements
gas pipe sizing if relevant
noise placement for heat pumps
rooftop solar availability
supply-only or supplied-and-installed preference
licensed installer confirmation

This helps avoid ordering a system that is the wrong size, wrong gas type, wrong fit or wrong technology for the home.

Which Hot Water System Should You Choose?

Choose electric storage if you want a simple, quiet and familiar replacement.

Choose instant electric if you need compact point-of-use hot water and the electrical setup suits.

Choose gas storage if you already have gas storage and want a familiar tank-style replacement.

Choose instant gas if you have suitable natural gas or LPG supply and want compact continuous flow hot water.

Choose heat pump hot water if you want lower running cost potential and your home has suitable outdoor space, airflow and drainage.

Choose solar hot water only if the roof, sun exposure, budget and booster setup make sense.

For most homes, the best starting point is Installed Today’s Hot Water Systems collection, then narrowing down by system type, size and energy source.

Long-Tail FAQs

What is the best hot water system for most homes?

There is no single best hot water system for every home. Electric storage may be best for simple replacement, heat pump may be best for running cost potential, instant gas may be best for gas-connected homes wanting continuous flow, and gas storage may suit like-for-like tank replacements.

Is a heat pump hot water system worth it?

A heat pump can be worth it if the home has suitable outdoor space, airflow, drainage and enough hot water demand to justify the higher upfront cost. It can be especially useful where the home has rooftop solar and the system can run during the day.

Is electric hot water expensive to run?

Standard electric storage can have higher running cost potential than heat pump hot water. Running costs depend on tank size, tariff, household usage, off-peak setup, timer settings and maintenance.

Is gas hot water better than electric?

Gas hot water may be better for homes already set up for natural gas or LPG, especially where continuous flow gas suits the household. Electric may be better where gas is unavailable or where the customer wants a simple storage replacement. Heat pump hot water may be better where running cost reduction is the goal.

What size hot water system do I need for a family?

The right size depends on the number of people, bathrooms, shower length, bath use, laundry habits and whether hot water demand is concentrated in the morning or evening. A 250L electric system may suit some small to medium families, while larger homes may need 315L, 400L, a larger heat pump or a suitable gas continuous flow system.

Is instant gas hot water unlimited?

Instant gas can continue heating water while gas, water and power supply are suitable, but performance still depends on model size, gas pipe sizing, water pressure, incoming water temperature and how many outlets are used at once.

Can I buy a hot water system supply only?

Yes. Supply only is suitable if you already have your own licensed plumber, gas fitter or electrician arranged. The product price is for the unit only and does not include installation, valves, removal, disposal, electrical work, gas work, pipework changes or compliance upgrades unless selected separately.

Can I order a hot water system supplied and installed?

Supplied-and-installed options may be available on selected products in eligible Brisbane and Gold Coast service areas. Availability depends on the product, address, access, existing setup, energy source, required extras and site requirements.

Should I replace my old hot water system with the same type?

Only if the old system was the right size, suited the household and was not costing too much to run. If it ran out of hot water, was expensive to operate or no longer suits the home, compare other options before replacing like-for-like.

Final Word

Choosing the best hot water system comes down to matching the system to the home. Electric storage is simple and familiar. Instant electric is compact for smaller applications. Gas storage is practical for like-for-like gas tank replacement. Instant gas suits homes already set up for continuous flow gas. Heat pump hot water can be a strong upgrade for running cost potential where the site suits.

The best system is not always the cheapest, largest or most advertised. It is the one that suits your household demand, energy source, space, budget and installation requirements.

Start with Installed Today’s Hot Water Systems, compare Electric Hot Water Systems, Gas Hot Water Systems, Instant Gas Hot Water Systems, Instant Electric Hot Water Systems and Heat Pump Hot Water Systems, then confirm suitability with your licensed installer before ordering.