Costs involved in buying and running various hot water systems
Most people don’t want to spend more on home water heating than they need to and that is totally understandable. However, the majority of homeowners also see the value of investing a bit more for a top quality product which will provide reliable hot water for their family for many years to come.
Comparing the expenses involved in a new hot water system needs to include ongoing operating costs as well as the initial purchase price to get an accurate overall picture. We’ve taken a look at average purchase costs as well as the yearly operating costs.
Comparing hot water system running and purchase costs
|Type||Average purchase cost*||Running cost per year^||Running cost per quarter^|
|Electric storage||$300 - $1500||$1442||$360|
|Gas storage||$900 - $2000||$920||$230|
|Instant gas||$600 - $2000||$803||$200|
|Heat pump||$2500 - $4000||$674||$168|
|Solar - gas boosted||$2000 - $7000||$502||$125|
*excluding installation costs. Averages only and costs as of June 2019.
^averages only. Speak to your hot water specialist about the running costs for your specific model and fuel choice.
Electric storage water heater
Electric storage hot water heater on a Domestic Single Rate tariff (NSW) has an average running cost of approx $1442 per year or $360 per quarter.
Variables for electric storage hot water systems include:
- Tariff connection - connecting to an off-peak tariff will mean you will need to buy a larger unit however it will reduce operating costs.
- Size and energy efficiency of the model
Gas storage hot water
4 Star natural gas powered gas storage hot water system $920 or $230 per quarter.
Variables for gas storage systems include:
- Natural gas or LPG - purchase costs for the different models are similar (you must buy a model specifically designed for your gas choice) however natural gas is the cheaper fuel choice.
- Size and energy rating of the unit
Instant hot water
Instant hot water system 6 star natural gas-fueled around $803 per year or $200 per quarter.
Variables for instant hot water systems include:
- Fuel choice - natural gas, LPG or electric
- Size and star rating of the unit
Heat pump on Domestic Single Rate tariff (NSW) around $674 per year or $168 per quarter.
Variables for heat pump hot water systems include:
- Peak or shoulder tariff connection - as with electric storage, a larger unit could be needed if connected to off-peak electricity
- Depending on where you are in Australia heat pump hot water systems can be eligible for state and federal government rebates and STC's which can reduce purchase costs.
STILL FEELING A BIT LOST?
click here to contact our team for more info
Solar hot water
Solar hot water system with natural gas booster $502 per year or $125 per quarter.
Variables for solar hot water systems include:
- Booster choice - natural gas booster is cheaper to run
- Your local climate - generally sunny climates will benefit most from solar hot water and get the most efficient operation from the heater.
- Depending on where you are in Australia solar hot water systems can be eligible for state and federal government rebates and STC's which can reduce purchase costs.
Solar hot water buying tip - gas boosted systems are often eligible for higher govt rebates than electric boosted solar.
Helpful hot water system running cost tool
Comparing the different hot water systems just got a bit easier with Rheem’s Running Cost Calculator.
Ref - https://www.choice.com.au/home-improvement/water/hot-water-systems/buying-guides/hot-water-systems; https://www.canstarblue.com.au/hot-water-systems/; https://www.rheem.com.au/help/running-cost-calculator