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Instant Hot Water Systems: Are they worth it?

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If you’re currently using a storage system or looking to change your hot water unit, you should consider an instantaneous hot water system. Canstar Blue has compiled a complete guide to instant hot water systems, so you can understand why they may be a better choice for you.

Hot water is one of the finer luxuries in life we don’t miss until, suddenly, we are without it. It happens all the time, maybe you were the last one to jump in the shower, or someone in your house has decided to do the washing up just as you were running a bath. There’s nothing quite like the shock of the water running artic midstream, leaving you frozen with cold, and the realisation there’s no more hot water.

This is where instantaneous hot water systems come into play. By only heating the water you use, instantaneous hot water systems ensure you never run out of hot water. Even better, they eliminate the need for paying extra for hot water you don’t use and help cut down on the family energy budget.

What’s an instantaneous hot water system?

Instantaneous hot water system

Instantaneous hot water systems, also called continuous flow hot water systems, are tankless hot water systems that provide instant hot water through your taps. They function by using a heat exchanger, which is a coiled pipe heated either by gas flame or electricity, that heats the water as it flows through.

The water flows through the pipes cold, passes through the heat exchanger where it is warmed, and comes out the tap hot. An instant hot water system can be installed inside or outside the home, depending on your existing setup.

Storage vs continuous hot water systems: What’s the difference?

Instantaneous hot water systems work differently to storage systems, which use hot water tanks.

A storage, or hot water tank, works by storing water in a reservoir and heating it either via a flame, or an electrical element. As water in the tank is used – like when someone has a shower – new, cold water passes in, is heated, and stored until needed. As hot water is lighter than cold water, it flows through the top of the tank into the hot water taps in your house, while cold water is topped up at the bottom of the tank. Each tank is equipped with a thermostat to ensure the water temperature remains consistent, and a pressure valve to prevent excess build-up. This system requires the water in the tank to be continually heated, even when it isn’t being used, which if you aren’t using a solar hot water system, can use a considerable amount of energy.

In comparison, instantaneous hot water isn’t stored anywhere. Instead, the water flows through the water pipes cold, is heated as it passes through a heat exchanger, and comes out through the tap as hot water. This system uses far less energy, as it only heats the water that is used.

Each system has its advantages and disadvantages, which we’ve outlined below.

Pros & cons of tank hot water systems

Pros Cons
More likely to already have a tank hot water system installed, saving on costs Keeping water consistently heated uses high amounts of energy
Low installation cost Take up space
Energy star certified Expected lifespan of around 10 years
Large amounts of hot water ready to use Tank systems may only serve households of a certain size

Pros & cons of instantaneous hot water systems

Pros Cons
Instant hot water Lower water pressure
Hot water never runs out High installation cost
Save energy by only heating water that’s needed Inconsistent water temperature across multiple appliances
Compact designs save space May require additional equipment to function
An expected lifespan of around 20 years May require more long-term maintenance

Do instant gas hot water systems need electricity?

Instantaneous gas hot water systems do need electricity, but not for heating the gas. Instead, electricity is used to power the thermostat which maintains the consistent temperature of the hot water, as well as the control panel, and any sensors related to appliance performance. This means if there is a power outage, your instant gas hot water system may not work, as it also relies on electricity to function.

Storage vs continuous hot water systems: What’s more energy efficient?

Heating system

Instant or continuous, hot water systems use less energy than storage hot water systems. This is because a storage hot water system uses high amounts of energy to keep large amounts of water hot over a long period of time.

Continuous hot water systems only heat water when the hot tap is turned on, which means they’re heating small amounts of water over a short period of time. This system saves a considerable amount of energy.

How much gas does an instant hot water system use?

An instant hot water system only uses gas to heat water being used, so the amount of gas used is dependent on the amount of water flowing through the tap. While instantaneous hot water systems are the more energy-efficient alternative to storage systems, households who use a lot of hot water may incur higher-than-normal gas bills. To find out how much gas your hot water system is using, you will need to look at your gas bill.

What to consider when buying an instant hot water system

The gift of instant hot water is a hard one to turn down, but before you rush out and buy the first system you see, there are a few things you need to take into account. Listed below are the top five considerations to have in mind when buying an instantaneous gas hot water system.

  • Capacity: Instantaneous hot water systems are only suitable for smaller households. This is because the heating element can only service a few taps at a time. If you have a larger household with multiple bathrooms or kitchens, consider installing multiple instant hot water units.
  • Rebates & incentives: There may be rebates and incentives available in your state to supplement the cost of installing a hot water system. The Australian government currently offers the Small-Scale Renewable Energy Scheme (SRES) which provides rebates, discounts, and special offers to households and businesses that install renewable energy systems. The scheme is packaged differently in each state, with varying rebates. The SRES only applies to renewable energy systems and not those powered by the grid or gas network.
  • Energy efficiency: Storage and continuous hot water systems aren’t required to display an Energy Rating Label like your fridge or air conditioner would. Instead, they have Minimum Energy Performance Standards (MEPS), which represents a maximum annual energy consumption performance level for each appliance. Appliances with a MEPS rating have been industry approved to use less energy and have lower running costs over their lifetime. The purpose of MEPS is to keep products with poor energy efficiency out of the market, so if you’re buying a system with a MEPS, you are making an energy-efficient choice.
  • Brands: If you are interested in comparing available instantaneous hot water systems, check out what’s on offer from popular brands like:

How much do instant hot water systems cost?

Hot water system cost

The cost of an instantaneous hot water system includes the price of the unit itself and the cost of installing it. If you’re replacing a hot water system that is already installed, you can expect to fork out anywhere upwards of $200. However, if you are installing a new system that requires additional equipment or repositioning your existing system, costs will be higher and depend on the installation location and suitability. Finally, if you are switching your system power from electric to gas, or vice versa, additional plumbing and electricity costs will also be incurred. Make sure to get a quote from your hot water system provider to understand the full cost of buying and installing an instantaneous hot water system.

Cost of instant hot water systems:

  • Electric: anywhere from $800 to $2,000
  • Gas: anywhere from $1,000 to $3,000

How long does an instant hot water system last?

Instantaneous gas hot water systems have an excellent lifespan. Unlike their tank counterparts, they can last up to twenty years, which is nearly double that of a tank hot water system. An instant water system lasts longer because it uses a simple heating device and stores no water, which eliminates the build-up of rust and corrosion.

Are instant hot water systems worth it?

If you’re able to foot the buying and installation costs, investing in an instant hot water system is worth the price. Throughout its possible twenty-year lifetime, an instant hot water system will not only provide you with hot water every time you need it, but also reduce your energy bill and emissions – making it a smart choice if you love both the environment and steaming showers.

If you do choose to buy an instant hot water system, keep in mind they work best for smaller households, and you will have to invest in installation as well as the price of the unit itself.

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Luciana Davies
Content Producer
Luciana Lawe Davies was a content producer at Canstar Blue for two years until 2023, most recently in the Home & Lifestyle section. She holds a Bachelor of Arts majoring in International Relations and English Literature and a Bachelor of Journalism from the University of Queensland.

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