Gas vs Electric Hot Water: Which Is Right for Your Home?

When a hot water system fails, most people just want it replaced fast — but it’s worth a moment’s thought, because the choice affects your bills for the next decade. Here’s how the main options stack up for a Melbourne home.

Gas hot water

Gas is a popular choice where there’s a natural gas connection. Continuous-flow (instantaneous) gas units heat water on demand, so you don’t run out and you’re not paying to keep a tank hot. They’re compact and wall-mounted.

• Pros: Endless hot water with continuous-flow, compact, generally lower running cost than standard electric where gas is connected.
• Cons: Needs a gas connection; continuous-flow units have a higher upfront cost.

Electric hot water

Electric storage systems are simple and cheap to install, which is why they’re everywhere. The downside is running cost if they’re on peak-rate power and the fact you can run out during heavy use.

• Pros: Low upfront cost, no gas needed, simple and reliable.
• Cons: Higher running cost on peak tariffs; a tank can be emptied during big demand.

Heat pump and solar

Heat-pump hot water uses electricity very efficiently — roughly a third of the energy of standard electric — and pairs well with solar panels. The upfront cost is higher, but rebates often apply and running costs are low. It’s worth considering if you’re replacing an old electric system and want to cut bills long term.

How to choose

The right answer depends on what’s already connected, how many people are in the house, your hot-water habits, and whether you have solar. A quick chat with a plumber who can size the system to your household usually saves you from over- or under-buying — and from running out of hot water on day one.