Gas Hot Water System Prices & Usage Costs

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Hot water systems account for almost a quarter of the average household’s energy bill, so picking the right one for your circumstance is essential.

From electric to gas and now even solar, there are several options for homeowners when it comes to water heaters. But how do you decide which will work best for your home? In this Canstar Blue guide, we take a look at one of the more popular forms of hot water systems; gas-powered, and see what these systems have to offer you in regards to pricing, usage costs and energy efficiency.

What is a gas hot water system?

A gas hot water system uses natural gas or LPG to heat water for use within the home. There are three main types of systems that fall under the gas hot water category – storage systems, instantaneous or continuous flow systems and solar hot water heaters with instantaneous gas boosting. Gas hot water systems are the second most popular type of hot water system in Australia, with 37 per cent of Aussies sharing that they had this kind of system in a recent Canstar Blue survey.

How does a gas hot water system work?

Man's hand turning on hot water system.

The way a gas hot water system works will vary depending on the type of system being used. Storage gas hot water systems, for example, use a gas burner to heat water stored within a tank. These systems usually have a continuously burning pilot flame which keeps the water at a set temperature throughout the day, waiting for use as needed.

With an instantaneous or continuous system however, water is only heated as it is used. Unlike a storage system, there are no tanks with an instantaneous or continuous system. Instead, these systems rely on coiled pipes, also known as heat exchangers, to keep the water warm as it moves directly to the relevant tap, after being heated by the gas burner. Because of this, instantaneous gas systems are typically considered to be the more energy and cost-efficient option as they don’t carry the same risk of heat loss as a tank or storage unit does.

As for solar hot water systems with gas boosters, these rely first and foremost on solar energy to heat the water, only using gas as a backup energy source when sunlight is scarce, e.g., rainy or cloudy days.

Best gas hot water systems

Below we have listed some of the best hot water system brands as per our latest survey findings and ratings report. This survey is conducted on a yearly basis and only asks customers who have recently purchased a new hot water system. The brands listed below are those who were included in the most recent report and offer a gas hot water system to consumers in Australia:

Gas hot water systems prices

The price of gas hot water systems varies between each kind of system; however, you can generally expect a storage gas hot water system to be cheaper to buy upfront than an instantaneous system.

The cost of an instant gas hot water system typically ranges from $700 to $1,900, depending on size and the number of taps or devices your system will need to serve. A gas storage hot water system will usually cost between $800 and $1,800.

Gas hot water system installation costs are usually an additional charge on top of the system purchase price, and will be dependent on the type of job (e.g. new install or replacement) and the system being installed. As a general rule of thumb however, you can expect the installation to cost around $200-$400 on top of your system purchase price. For more information around gas hot water system installation costs, it is best to get in contact with a licensed installer.

What are the benefits of a gas hot water system?

There are a few advantages when it comes to installing a gas hot water system, particularly if your home is already connected to the gas mains in your area.

Hot water running from shower head.

  • Energy and cost efficient: Gas-fired systems can typically heat water quicker and more efficiently than an electricity-fired system. They can also heat larger quantities of water in a particular time period, thanks to their higher recovery rate.
  • Will still have hot water during a power outage: Since your hot water system is fuelled by either the gas mains or an LPG tank, in the event of a power outage your household won’t be left without hot water.
  • Easy to install: As long as you have a connection to the gas mains, a gas hot water system is generally pretty quick and easy to install within the home.

How much does it cost to run a gas hot water system?

The usage costs associated with a gas hot water system will rely on a number of factors from household size, system type and the cost of gas in your distribution area. That being said, instantaneous systems will generally cost less to run than a storage system.

To give you an idea of what you could expect to pay on your energy bill for using a gas hot water system we have collated the annual estimated cost for both instantaneous and storage systems across the country.

Gas Hot Water Annual Cost Estimates

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Type Average Annual Gas Consumption (MJ) Brisbane Sydney Adelaide Perth Melbourne Canberra
Instantaneous 18,715.2 $692 $505 $786 $749 $505 $674
Storage 21,250 $786 $574 $893 $850 $574 $765

Source: www.canstar.com.au – 27/05/2022. Average annual consumption figures based on gas hot water systems in the Commonwealth of Australia E3 Program’s Registration database. Usage cost estimates based on average gas usage costs: 2.7 c/MJ in Sydney, 2.7 c/MJ in Melbourne, 3.7 c/MJ in Brisbane, 4.2 c/MJ in Adelaide, 4.0 c/MJ in Perth, and 3.6 c/MJ in Canberra. Average usage costs are based on rates on Canstar’s database available for an annual usage of 14,900 MJ.

From this data we can see that it’s Adelaide households that often cop the highest bills for using a gas hot water system, while Sydneysiders and Melbournians come off significantly cheaper.

Compare Gas Prices

Gas Plans Compared in VIC

Here are some of the cheapest gas deals on our database for VIC. These estimated annual costs are based on the Australian Gas Network in Melbourne and yearly gas usage of 29,830MJ, but prices will vary depending on your circumstances. We show one product per retailer, listed in order of lowest estimated cost. This table includes products from referral partners†. Our database may not cover all deals in your area, and please check retailer websites for up to date information.

Gas Plans Compared in NSW

Here are some of the cheapest gas deals on our database for NSW. These estimated annual costs are based on the Jemena Gas Network in Sydney and yearly gas usage of 18,542MJ, but prices will vary depending on your circumstances. We show one product per retailer, listed in order of lowest estimated cost. This table includes products from referral partners†. Our database may not cover all deals in your area, and please check retailer websites for up to date information.

Gas Plans Compared in WA

Here are some of the cheapest gas deals on our database for WA. These estimated annual costs are based on the ATCO Network in Perth and yearly gas usage of 27,620 (units), but prices may vary depending on your circumstances. We show one product per retailer, listed in order of lowest estimated cost. This table includes products from referral partners†. Our database may not cover all deals in your area, and please check retailer websites for up to date information.

Gas Plans Compared in SA

Here are some of the cheapest gas deals on our database for SA. These estimated annual costs are based on the Australian Gas Network in Adelaide and yearly gas usage of 11,875MJ, but prices will vary depending on your circumstances. We show one product per retailer, listed in order of lowest estimated cost. This table includes products from referral partners†. Our database may not cover all deals in your area, and please check retailer websites for up to date information.

Gas Plans Compared in QLD

Here are some of the cheapest gas deals on our database for QLD. These estimated annual costs are based on the Australian Gas Network in Brisbane and yearly gas usage of 6,842MJ, but prices will vary depending on your circumstances. We show one product per retailer, listed in order of lowest estimated cost. This table includes products from referral partners†. Our database may not cover all deals in your area, and please check retailer websites for up to date information.

Picking the right hot water system for your home will be dependent on a number of factors such as household size, location and energy connections within the home. If you already have a mains gas connection at your home, then you may find some value in connecting a gas hot water system. Larger households may also find some benefit in gas hot water due to these systems’ higher recovery rates.

If you don’t have a gas mains connection though, it may be worth considering whether it’s worth paying the additional costs to install one before making a purchase decision. While a gas hot water system can also be powered by LPG, a new gas connection can cost anywhere between $50 and $100, which is something to keep in mind.

For further reading on hot water systems and which option may be best for your home, be sure to check out our annual hot water systems ratings report. Here’ll you find a number of brands that everyday Aussies have rated as best in the biz, as well as tips for choosing the right system, pricing guides and more.

Best Hot Water Systems

Image credits: sydeen/Shutterstock.com, brizmaker/Shutterstock.com, Before i Go/Shutterstock.com

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