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Hot Water Cost

Hot water system replacement cost in Australia

Installed prices by system type in 2026, what each costs to run, the size you need, and what pushes a quote up or down.

Last checked

Installers report a replacement electric storage system costing $800–$2,500 installed, and a heat pump $3,000–$5,200, before rebates. State rebates can take a big share off a heat pump, and it costs far less to run, so the real gap is smaller than the sticker gap.

Installed prices by system type

Installed hot water system prices in Australia, 2026, before rebates
SystemInstalled priceWorth knowing
Electric storage $800–$2,500 Cheapest to buy, dearest to run.
Gas storage $1,200–$3,000 Common where the home is already on gas.
Gas continuous flow $1,500–$3,000 Heats on demand, so it doesn't run out.
Heat pump $3,000–$5,200 Most rebates target this type.
Solar $3,000–$7,000+ Highest upfront cost; depends on roof and sun.
Installed price by system type, before rebates

Installer-reported ranges for Australia in 2026. Solar has no upper bound in the source, so its bar fades out.

Show these figures as a table
Item From To
Electric storage $800 $2,500
Gas storage $1,200 $3,000
Gas continuous flow $1,500 $3,000
Heat pump $3,000 $5,200
Solar $3,000 $7,000+

Your installer's quoted price already includes the federal STC discount. The prices above are for supply and installation together. For a second opinion on heat pumps, NSW's energy agency puts installation at $2,000–$6,000, depending on size, model and installer.

Supply-only prices aren't what you pay

Some guides quote the unit on its own. A heat pump unit alone runs $2,800–$5,200 and an electric unit $550–$2,100. Installation comes on top, so compare installed prices when you compare quotes. How to read a hot water quote shows the lines to look for.

What each type costs to run

The purchase price is only half the story. Reported yearly running costs differ a lot between types:

Reported yearly running cost by hot water system type
SystemRunning cost
Electric storage $600–$900 a year
Gas storage $350–$550 a year
Gas continuous flow $300–$500 a year
Heat pump $150–$300 a year
Solar $100–$250 a year
Reported yearly running cost by system type

Industry-reported ranges. Your own cost depends on your tariff, household size and climate.

Show these figures as a table
Item From To
Electric storage $600 $900
Gas storage $350 $550
Gas continuous flow $300 $500
Heat pump $150 $300
Solar $100 $250

Official figures point the same way. NSW puts a heat pump's saving against a traditional system at $200–$800 a year, and Solar Victoria says switching gas hot water to efficient electric saves around $400 a year.

What size you need

Too small and you run out mid-shower; too big and you pay to heat water nobody uses. As a starting point for a storage tank:

Suggested storage tank size by household size
HouseholdTank size
1–2 people 125–160 litres
2–3 people 160–250 litres
3–4 people 250–315 litres
4–5 people 315–400 litres
5 or more 400 litres or more

Those are industry rules of thumb. A household with long showers or a spa bath may need the next size up, so ask your installer to size the system for how you actually use water.

What changes the price

  • Labour. Plumbers typically charge $80–$120 per hour, and a like-for-like swap takes 2–4 hours.
  • Switching fuel. Going from gas to a heat pump can need a new electrical circuit. Electrical work is reported at $100–$400 where it's needed.
  • Access. A unit in a roof space, under a house or up a narrow side path takes longer to remove and install.
  • A tempering valve. Bathroom fixtures can't get water hotter than 50 °C, and the valve is reported at $80–$150. Why
  • Disposal. Removing the old tank is reported at $80–$200. Check it's included.

Then take off your state's rebate

What you can get depends on where you live and what you're replacing. The calculator works it out, and the state guides explain who qualifies. On gas in Victoria? From 1 March 2027, a gas hot water system in an existing home that reaches end of life has to be replaced with an electric one. What the rule means.