Typical cost in 2025
Most homeowners pay around $1,800 for a gas continuous flow system, supply and install
What affects the price?
System type
Electric storage is cheapest upfront ($800–$1,500) but expensive to run. Gas continuous flow costs $1,200–$3,000 installed. Heat pump systems cost $2,500–$5,000 but are the most efficient long-term. Solar hot water costs $3,000–$7,000+.
Tank capacity
A 2-person household needs 125–160L. A family of 4 needs 250–315L. Continuous flow systems are sized by flow rate (16–26L/min) rather than tank size.
Like-for-like vs system change
Replacing a gas system with another gas unit is cheapest and simplest. Switching from electric to gas or heat pump requires new pipework or electrical upgrades, adding $500–$2,000 to the cost.
Location and access
Ground-floor external installations are cheapest. Roof-mounted systems, difficult access, or long pipe runs add to labour costs. Replacing a unit in a ceiling void or confined space can add $400–$800.
Brand and warranty
Reputable brands (Rheem, Rinnai, Bosch, Dux) cost more but offer better warranties (5–10 years on the tank). Budget brands save upfront but may cost more in repairs and early replacement.
Typical cost breakdown
Estimates are based on Australian average rates in 2025. Prices in Sydney and Melbourne are typically 10–20% higher than other capital cities.
Frequently asked questions
How long does a hot water system last?
Electric and gas storage systems last 8–12 years. Continuous flow gas systems last 15–20 years. Heat pump systems last 10–15 years. Regular servicing extends life significantly.
Gas vs heat pump — which is better?
A heat pump is 3–4x more efficient than a gas system and produces no direct emissions. Over 10 years, a heat pump typically saves $2,000–$4,000 in running costs. The higher upfront cost pays back in 4–6 years in most Australian climates.
Is there a government rebate for hot water systems?
Yes — heat pump hot water systems qualify for Small-scale Technology Certificates (STCs) under the federal scheme, worth $500–$1,000 depending on your location. Some states (VIC, NSW, QLD) also offer additional rebates.
Can I install a hot water system myself?
No — hot water system installation must be performed by a licensed plumber. Gas work must also be done by a licensed gas fitter. DIY installation is illegal and will void your warranty and home insurance.
What size hot water system do I need?
As a rough guide: 1–2 people need 125–160L storage or a 16L/min continuous flow; 3–4 people need 250–315L or 20L/min; 5+ people need 315L+ or 26L/min. Your plumber can advise based on your household usage patterns.