At home

Hot water systems

Electric hot water systems typically account for more than one-third of home energy use in New South Wales. That’s a huge chunk of your household budget.

To avoid wasting money on an expensive and unnecessary hot water system,  before installing you first need to decide whether an instantaneous or storage system will work best for your home, and then consider your fuel options.

An instantaneous system heats water only as required, while  a storage system stores the heated water in an insulated tank for use on demand.

Among the heating fuels to choose from are natural gas, solar, heat pumps, LPG (liquid petroleum gas), solid fuels and electricity.

If you are connected to natural gas, a high efficiency gas hot water system is one of the cheapest hot water options, but the most economic and environmentally friendly choice is a natural gas boosted solar system. Water heated by electricity - which in New South Wales is mostly generated from coal-fired power stations - causes the most carbon emissions, as well as costing the most.

The following table is a comparative guide on running costs for the most common fuel options.

Running costs

Household size Energy source Type Annual cost ~

Small
1–2 people

77 litres per day

Gas

Instantaneous

$215

LPG

$529

Electricity

Cont - DR^

$610

Off Peak

$357

 Solar

Gas boosted

$98

Electric off peak boost

$125

Medium
3–5 people

156 litres per day

Gas

Instantaneous

$360

LPG

$901

Electricity

Cont - DR^

$1111

Off Peak

$563

 Solar

Gas boosted

$183

Electric off peak boost

$197

Large
6–8 people

300 litres per day

Gas

Instantaneous

$497

LPG

$1254

Electricity

Cont - DR^

$1589

Off Peak

$759

 Solar

Gas boosted

$261

Electric off peak boost

$266

~ Approximate per annum. Based on 32 cents/kWh and 2 cents/MJ

^ Continuous – Time of Use (TOU). It is assumed that TOU hot water usage is spread evenly between peak, shoulder and off peak periods.

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Page last updated: 10 December 2015