Get App
Centralised hot water explained
07 Apr 2025
key-points">KEY POINTS
- A centralised or bulk hot water system is used to provide large apartment complexes and multi-dwelling homes with hot water.
- Apartments and multi-dwellings are individually metered and charged.
- Centralised hot water costs are calculated from usage and supply charges and presented in megajoules (MJ).
In this article, Canstar Blue explains centralised or bulk hot water for apartments and multi-dwelling homes and how centralised hot water is utilised to provide individual apartments with hot water.
On this page:
What is centralised hot water?
A centralised or bulk hot water system is used to provide large apartment complexes and multi-dwelling homes with hot water.
Centralised hot water systems for apartments allow individual apartments to save space. However, apartments and multi-dwellings are individually metered and charged.
There is a natural gas option for apartments with gas cooktops and other common property facilities. Origin Energy is potentially the largest supplier of centralised hot water in Australia, offering bulk hot water and serviced hot water options.
How much does centralised hot water cost?
Similar to electricity or gas accounts, centralised hot water costs are calculated from usage and supply charges. Because most centralised how water systems are powered with gas, bills and individual meters will be presented in megajoules (MJ). Gas costs vary from state to state, but due to bulk purchasing power, centralised systems can deliver savings to the end user. You should be billed separately to your gas usage and your cold water will still be billed by your local water retailer.
While Origin Energy has been the long-term provider of centralised hot water, smaller providers such as Savant Energy also offer centralised hot water. While there may be different suppliers on a case-by-case basis, you usually don’t get a choice of provider.
Either your apartment complex is with Origin Energy or another provider such as Savant Energy. This means that you probably cannot switch energy providers, so you will need to set up an account with whichever provider supplies the complex you live in.
- You can find out more information and set up an account with Origin here
- You can set up an account with Savant Energy here
Benefits of centralised hot water for apartments
Similar to embedded electricity networks, apartment blocks that purchase ‘hot water’ in bulk can deliver potential savings for the individual resident. Rather than having residents individually choose their electricity or gas provider, centralising the system and then metering apartments can be convenient and cost efficient.
Convenience versus choice
If you prefer to choose your energy provider then centralised hot water may be an adjustment for you. However, if you like having one less thing to worry about, then it may be perfectly convenient for you. It’s important to weigh up the value of having property management liaise with the energy provider on your behalf, with the freedom of choosing and controlling it by yourself.
Metering
The potential issue with metering for a large apartment complex may be incorrect meter readings. You could be charged as someone in a different apartment who has greater hot water usage. However, if this happens, it can be rectified by communicating with the property management group or body corporate.
Tenancy
If you’re entering a lease in an apartment complex, ensure the previous tenant has finalised their account. Centralised hot water systems work smoothly but can be disrupted by a tenant ending a lease, as well as a new lease beginning in the same apartment. Check that you have set up a new billing account with the apartment’s bulk hot water provider. You don’t want to pay for the previous tenants’ water usage, and the old tenant does not want to be billed for something they no longer use.
How does centralised hot water benefit body corporate, property managers or owners?
Body corporate and property managers or owners significantly benefit from utilising centralised hot water through more convenience and risk aversion.
Origin Energy has outlined further potential benefits for those managing a multi-dwelling home with a tenancy agreement:
Automated billing
The provider usually manages the billing of hot water and individually sends out bills to each apartment. This saves the management group or body corporate dividing up the total bill.
Metering service
Each apartment is individually metered, making for easy usage calculations.
Space-saving
Space within an apartment can be minimal, so having a centralised system means hot water can be supplied without each apartment needing a hot water tank.
Lower risk of leaks
Individual hot water tanks can cause serious issues if they spring a leak. Having a centralised hot water tank makes it easier to address any leakage problems while avoiding water damage for individual apartments.
Compare electricity plans
Here are some sponsored deals from the retailers on our database that include a link to the retailer’s website for further details. These are products from referral partners†. These costs are based on the Ausgrid energy network in Sydney but prices may vary depending on your circumstances. This comparison assumes general energy usage of 3900kWh/year for a residential customer on a single rate tariff. Please use our comparison tool for a specific comparison in your area and to see other products in our database that may be available. Our database may not cover all deals in your area. As always, check all details of any plan directly with the retailer before making a purchase decision.
 |
|
9% Less than reference price |
$1,651 Price/year (estimated) |
Go to Site |
Here are some sponsored deals from the retailers on our database that include a link to the retailer’s website for further details. These are products from referral partners†. These costs are based on the Citipower network in Melbourne but prices may vary depending on your circumstances. This comparison assumes general energy usage of 4000kWh/year for a residential customer on a single rate tariff. Please use our comparison tool for a specific comparison in your area and to see other products in our database that may be available. Our database may not cover all deals in your area. As always, check all details of any plan directly with the retailer before making a purchase decision.
|
|
15% Less than VDO |
$1,238 Price/year (estimated) |
Go to Site |
Here are some sponsored deals from the retailers on our database that include a link to the retailer’s website for further details. These are products from our referral partners†. These costs are based on the Energex network in Brisbane but prices may vary depending on your circumstances. This comparison assumes general energy usage of 4600kWh/year for a residential customer on a single rate tariff. Please use our comparison tool for a specific comparison in your area and to see other products in our database that may be available. Our database may not cover all deals in your area. As always, check all details of any plan directly with the retailer before making a purchase decision.
|
|
9% Less than reference price |
$1,888 Price/year (estimated) |
Go to Site |
Here are some sponsored deals from the retailers on our database that include a link to the retailer’s website for further details. These are products from our referral partners†. These costs are based on the SA Power network in Adelaide but prices may vary depending on your circumstances. This comparison assumes general energy usage of 4011kWh/year for a residential customer on a single rate tariff. Please use our comparison tool for a specific comparison in your area and to see other products in our database that may be available. Our database may not cover all deals in your area. As always, check all details of any plan directly with the retailer before making a purchase decision.
|
|
9% Less than reference price |
$2,036 Price/year (estimated) |
Go to Site |
Is centralised hot water a good deal?
Ultimately, centralised hot water systems are convenient but remove the tenant’s choice of provider. Centralised hot water is convenient for managers but relies on the tenant activating their account. Even one tenant not activating their account could disrupt the billing system working smoothly.
If you are determined to avoid centralised hot water systems and are struggling with your choice of provider, keep an eye out when applying for apartments and avoid any that use centralised hot water systems.
If you wish to compare electricity providers, click on the Canstar Blue link below.
Original reporting by Simon Downes
Image Source: Grand Warszawski/Shutterstock
