Hot water systems are essential for Australian households, but not all systems are created equal. Choosing the right one during installation can save you money, improve energy efficiency and ensure your home has reliable access to hot water year-round.
Before making your decision, it’s important to understand the key considerations that affect long-term performance and cost. Here are three must-know facts to guide you when installing a new hot water system.
1. Not All Hot Water Systems Are the Same
When selecting a hot water system, many homeowners assume they just need to pick a tank size. But the type of system you choose—electric, gas, solar or heat pump—makes a huge difference in efficiency, cost and environmental impact.
Electric systems are common and typically cheaper to install, but they can be more expensive to run, especially if you use a standard tariff. Off-peak models reduce costs but may require a larger tank to meet daily demands. Gas systems provide quick recovery and are ideal for homes with a steady gas supply. They’re generally more affordable to run than electric systems and are unaffected by peak electricity rates.
Solar hot water systems use roof-mounted panels to harness the sun’s energy, significantly cutting down on electricity or gas use. They often include a booster for cloudy days and have higher upfront costs, but long-term savings and government rebates make them an attractive option. Heat pump systems extract heat from the air to warm water and are a highly efficient solution, especially in warmer climates. They use electricity but operate at a fraction of the cost of traditional electric systems.
Understanding the pros and cons of each system ensures your hot water installation suits your climate, budget and household needs. Don’t base your decision solely on upfront cost—consider long-term savings and energy consumption.
2. System Size and Placement Matter More Than You Think
Incorrect system sizing is one of the most common issues after installation. A system that’s too small will run out of hot water during peak times, while one that’s too large will waste energy and money by heating unused water.
To determine the right size, you’ll need to consider the number of people in the household, your water usage habits, when peak demand usually occurs and whether your home is fitted with water-saving fixtures or appliances. For example, a family of four using standard fixtures may require a 250–315L storage tank if opting for an electric model or a smaller unit with continuous flow for gas systems. Meanwhile, households with low usage may benefit from compact or point-of-use systems that heat only what’s needed.
Location also plays a critical role. A Hot water system should be installed as close as possible to the primary water outlets such as the kitchen, bathroom or laundry. This helps minimise heat loss through pipes, which can reduce both wait times and energy bills. The longer the distance, the more energy it takes to deliver hot water.
Additionally, outdoor versus indoor placement affects both efficiency and maintenance. Outdoor installations often offer better ventilation, especially for gas systems and avoid the need for indoor flueing. Indoor installations may require additional plumbing or ventilation features to meet compliance standards. Always consult with a licensed plumber or technician to evaluate the most efficient location based on your property layout.
3. Installation and Compliance Can Impact Long-Term Performance
Even the best hot water system won’t perform as intended if installed incorrectly or without proper compliance. In Australia, all installations must meet relevant building codes, manufacturer specifications and safety standards.
A licensed plumber or technician must carry out the installation to ensure safe connection to electricity or gas, proper ventilation and drainage and correct placement of temperature control settings and safety valves. It’s also critical that the system complies with local council regulations and manufacturer warranties. Failing to meet these standards can void your warranty or create serious safety hazards.
For instance, tempering valves are legally required on all new installations to prevent scalding by limiting water temperature to 50°C at outlets. If these aren’t installed, it could lead to compliance issues or potential accidents.
Installing a new hot water system is an investment that affects daily comfort, household costs and long-term energy use. By understanding the different types of systems, choosing the right size and ensuring professional installation, you’ll avoid common pitfalls and enjoy efficient, reliable hot water.
Whether you’re upgrading an outdated unit or fitting out a new home, consider these three must-know facts to make an informed decision. From solar options to efficient gas models, the variety of hot water systems available means there’s a perfect fit for every Australian household.
Need help finding the right solution? Speak with a licensed installer who can assess your home’s needs and recommend the most suitable system for your lifestyle and budget.
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