Replacing a Hot Water System: How to Choose the Right Replacement Unit

Oct 3, 2024

Replacing a hot water system is not just a matter of buying the same model again. The right replacement depends on your household size, hot water usage, energy source, installation location, electrical or gas requirements, access, drainage, valves and long-term running cost goals.

For some homes, a standard electric storage system is the simplest replacement. For others, a gas storage system, instant gas unit or heat pump may be a better fit. The key is to compare the real cost and suitability before ordering, not just the product price.

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 Should You Replace Your Hot Water System With?

The best replacement hot water system is the one that matches your household demand, energy source and installation conditions.

As a general guide:

Electric storage hot water can suit straightforward replacements and homes without gas
Gas storage hot water can suit homes already set up for natural gas or LPG
Instant gas hot water can suit homes wanting continuous flow hot water where gas pipe sizing and water pressure are suitable
Heat pump hot water can suit efficiency-focused homes with suitable outdoor space, airflow and drainage
Instant electric hot water can suit small point-of-use applications, but may not suit whole-home demand
Solar hot water can suit homes with suitable roof space, sun exposure and booster planning

Before ordering a supply-only system, confirm the correct size, model, gas type, electrical requirements, access, valves, drainage and compliance requirements with your licensed installer.

Signs Your Hot Water System May Need Replacing

A hot water system often gives warning signs before it fails completely. If you notice any of the following, it may be time to compare replacement options.

The Tank Is Leaking

A leaking storage tank is one of the clearest signs that replacement may be needed. Small leaks can become bigger quickly and may damage floors, walls, surrounding structures or nearby electrical components.

A leaking tank usually cannot be repaired in a way that restores the system to long-term reliable operation.

Hot Water Runs Out Too Quickly

If your household regularly runs out of hot water, the system may be undersized, ageing or no longer recovering properly.

Do not automatically replace the old system with the same size if it was already failing to keep up. You may need a larger electric storage unit, a different gas option or a heat pump with suitable capacity.

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

Water Temperature Is Inconsistent

Hot water that swings between too hot, lukewarm and cold may indicate a failing component, sediment buildup, thermostat issue or a system that can no longer handle demand.

A licensed plumber or electrician should assess the cause. If the system is old, replacement may be better value than repeated repairs.

Rusty or Discoloured Water

Rusty or brown water from hot taps can point to corrosion inside the tank or pipework. If the issue is coming from the hot water unit, it may be a sign the system is nearing the end of its life.

Unusual Noises

Rumbling, popping or banging noises can be linked to sediment buildup, heating issues or ageing components. Some noise issues can be serviced, but if the system is older or performing poorly, replacement may be the more practical option.

The System Is Old

Many storage hot water systems are replaced after years of service due to age, leaks, declining performance or efficiency concerns. Age alone does not always mean immediate replacement, but an older unit with performance issues should be reviewed before it fails unexpectedly.

Repair Costs Are Adding Up

If the unit needs regular repairs, replacement may be more economical. This is especially true if the system is old, inefficient, leaking, undersized or no longer suits the household.

Should You Replace Like-for-Like?

A like-for-like replacement can be practical when the old system worked well, the household demand has not changed and the installation location remains suitable.

However, replacing like-for-like may not be the best choice if:

The old system ran out of hot water
Energy bills were too high
Household size has changed
More bathrooms have been added
The old location is no longer suitable
The existing setup needs compliance upgrades
You want to move from electric storage to heat pump
You want to move from storage to instant gas
Natural gas or LPG availability has changed
You want to use rooftop solar more effectively

Before ordering the same model or same size, compare the alternatives.

Main Replacement Hot Water System Options

Electric Hot Water Systems

Electric hot water systems are common in Australian homes and can be one of the simplest replacement options where the existing unit is already electric.

Electric storage systems heat water inside a tank and keep it ready for use. They are familiar, widely available and suitable for many homes without gas.

Electric storage can suit:

Homes without natural gas or LPG
Like-for-like replacements
Rental properties
Homes with existing electric hot water wiring
Small, medium and large households
Customers wanting a straightforward storage system

Popular electric storage options include:

Electric storage may cost less upfront than heat pump options, but running costs should be compared carefully, especially for larger households.

Gas Hot Water Systems

Gas hot water systems can suit homes already set up for natural gas or LPG.

Gas systems are commonly split into:

Gas storage hot water
Instant 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

Gas storage systems heat and store water in a tank. They can be a practical replacement option where the home already has gas and the household wants stored hot water ready to use.

Common gas storage categories include:

Product examples include:

Instant Gas Hot Water

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.

They can suit homes that:

Want continuous flow hot water
Have suitable natural gas or LPG supply
Want to save space compared with a storage tank
Have suitable outdoor installation space
Have enough gas pipe sizing and water pressure
Need a replacement from an older gas unit

Common instant gas sizes include 16L, 20L and 26L. Larger households often compare 26L instant gas hot water systems.

Popular instant gas options include:

A 26L gas unit can be a strong option for some family homes, but it must be supported by the property’s gas supply and water pressure. Bigger is not better if the site cannot support it.

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

Heat Pump Hot Water Systems

A heat pump hot water system can be a strong replacement option where efficiency matters and the site suits the technology.

Heat pumps use heat from the surrounding air to help heat stored water. This can reduce electricity use compared with standard electric storage in the right conditions.

A heat pump may 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 practical noise location
Want to use more daytime solar electricity where timer settings and household use suit

Heat pumps are not automatically best for every home. They need suitable airflow, drainage, access, outdoor placement and noise consideration.

Many family homes compare medium heat pump hot water systems 200L–280L, while larger homes may need to consider large heat pump hot water systems.

Popular heat pump options include:

Instant Electric Hot Water Systems

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

They may suit:

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

They are not always suitable for whole-home hot water because electrical demand can be high. A licensed electrician or installer should confirm whether the property can support the unit before ordering.

Solar Hot Water Systems

Solar hot water can suit homes with strong roof suitability, good sun exposure and the right booster setup. It can reduce grid energy use where conditions are suitable.

Solar hot water considerations include:

Roof orientation
Shading
Collector position
Tank location
Electric or gas booster setup
Frost protection where relevant
Maintenance needs
Upfront cost
Long-term household use

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.

Choosing the Right Replacement Size

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

A system that is too small may run out of hot water. A system that is too large may cost more than necessary and may not be the most efficient option.

When choosing the replacement size, consider:

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

For electric storage, many households 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 flow sizes include 16L, 20L and 26L.

Replacement Cost: What Affects the Real Price?

The cost of replacing a hot water system is not just the unit price.

The final cost can be affected by:

System type
Tank size or flow rate
Brand and model
Indoor or outdoor location
Access for removal and delivery
Existing pipework condition
Valve requirements
Electrical work
Gas work
Gas pipe sizing
Drainage and overflow requirements
Old unit removal
Disposal
Compliance upgrades
Base or slab requirements
Heat pump condensate drainage
Relocation of the system

For supply-only orders, the product price generally does not include installation, valves, electrical work, gas work, pipework changes, drainage, old unit removal, disposal or compliance upgrades unless selected or clearly shown on the product page.

Installation Checks Before Ordering Supply Only

Before ordering a replacement hot water system, your licensed installer should confirm:

The correct system type
The correct size or flow rate
Correct gas type, if choosing gas
Electrical requirements
Gas pipe sizing for instant gas
Water pressure
Installation location
Access for delivery and removal
Drainage and overflow points
Tempering valve requirements
Pressure limiting valve requirements
Expansion control valve requirements
Existing pipework condition
Frost exposure where relevant
Noise placement for heat pumps
Whether compliance upgrades are needed

This is especially important when changing system type, such as moving from electric storage to heat pump, gas storage to instant gas, or gas to electric.

Electric vs Gas vs Heat Pump Replacement

Replacement Option	Best Suited To	Key Considerations
Electric storage	Simple replacement, homes without gas	Running costs may be higher than heat pump depending 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	Homes wanting continuous flow hot water	Gas pipe sizing, water pressure and outdoor location matter
Heat pump	Efficiency-focused homes with suitable outdoor space	Needs airflow, drainage, access, electrical suitability and noise planning
Instant electric	Small point-of-use needs	Whole-home use may require significant electrical capacity
Solar hot water	Homes with suitable roof conditions	Roof space, booster setup and upfront cost need checking

The best replacement is not always the same as the old system.

Brisbane and Gold Coast Replacement Considerations

For Brisbane and Gold Coast homes, replacement suitability often depends on access, drainage, existing valves, energy source and outdoor location.

Common local considerations include:

Older electric storage systems
Homes comparing electric storage with heat pump upgrades
Natural gas vs LPG availability
Outdoor gas unit positioning
Tight side access
Stormwater and overflow drainage
Heat pump airflow and noise placement
Ageing valves and pipework
Solar-friendly heat pump timing
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.

Rebates, STCs and Incentives

Some replacement hot water systems, especially heat pumps and solar-style systems, 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 home. Do not choose a product only because it has an incentive attached.

Brand Options to Compare

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

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

Common Mistakes When Replacing a Hot Water System

Replacing the Same Size Without Checking Demand

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

Choosing Only by Upfront Price

A cheaper product may cost more long term if it is expensive to run or unsuitable for the household.

Ignoring Installation Extras

Valves, drainage, pipework, electrical work, gas work and compliance upgrades can all affect the real replacement cost.

Ordering the Wrong Gas Type

Natural gas and LPG units are different. They are not interchangeable.

Choosing a 26L Instant Gas Unit Without Checking the Site

A 26L instant gas unit can suit some family homes, but the gas pipe sizing and water pressure must support it.

Choosing a Heat Pump Without Checking Location

Heat pumps need airflow, drainage, access, outdoor space and appropriate noise placement.

Assuming Supply-Only Includes Installation

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

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.

Before Ordering Checklist

Before ordering a replacement 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 use
Available energy source
Natural gas or LPG, if choosing gas
Electrical requirements, if choosing electric or heat pump
Gas pipe sizing, if choosing instant gas
Water pressure
Heat pump airflow and drainage
Installation location
Access for removal and delivery
Drainage and overflow requirements
Whether new valves may be needed
Whether rebates or STCs apply
Whether supply-only or supplied-and-installed is the right option
Installer confirmation before buying supply only

Frequently Asked Questions

When should I replace my hot water system?

You may need to replace your hot water system if the tank is leaking, hot water runs out regularly, water temperature is inconsistent, rust appears, the system is noisy or repair costs are adding up.

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

Not always. Like-for-like replacement can be suitable if the old system worked well, but you should compare alternatives if it was too small, expensive to run or no longer suits the household.

What is the best replacement hot water system?

The best replacement depends on household size, energy source, installation location and budget. Electric storage, gas, instant gas and heat pump systems can all suit different homes.

Is a heat pump a good replacement for electric hot water?

A heat pump can be a good replacement where the home has suitable outdoor space, airflow, drainage, electrical supply and noise placement. It is not automatically right for every home.

Can I replace gas storage with instant gas?

Sometimes, but the gas pipe sizing, water pressure, location and correct gas type must be checked first. Gas work must be completed by a licensed gas fitter.

What size replacement hot water system do I need?

The right size depends on people in the home, bathrooms, shower habits, peak usage and whether the old system ran out. Many homes compare 250L, 315L or 400L electric storage, 250L to 280L heat pumps, or 16L to 26L instant gas systems.

Can I install a replacement hot water system myself?

No. Hot water systems involve plumbing, water pressure, valves, drainage, gas and electrical safety. Use licensed trades for installation.

What is not included in supply-only hot water pricing?

Supply-only pricing generally excludes installation, valves, electrical work, gas work, pipework changes, drainage, old unit removal, disposal and compliance upgrades unless selected or clearly shown.

Final Word

Replacing a hot water system is the best time to check whether the old unit still suits your home. A like-for-like replacement may be simple, but it is not always the best value if the system was undersized, inefficient or expensive to run.

Compare electric storage, gas storage, instant gas, heat pump and instant electric options before ordering. Check the right size, energy source, installation location, running cost and any rebate eligibility.

If buying supply only, confirm the product with your licensed installer first so the size, gas type, electrical requirements, access, drainage and compliance needs are correct before the system arrives.

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