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Your hot water system just isn’t running like it used to, so you have decided it is time to upgrade or replace your unit with something new. You type ‘hot water systems’ into Google and up comes millions of responses… and you think you may be out of your depth. What do you look for? What are the important features? What are the different types of hot water systems and what do they mean?

We have put together a comprehensive three-part overview of the types of hot water systems available, what their costs are, the relevant unit sizing, as well as tips and tricks as to how to choose the best system for your needs. However, if you are still not sure give your local plumber a call and they can discuss the different options with you and what is available for your home. Given that hot water is such a huge part of any household, it is so important to ensure you choose the best system, so make sure you do your research!

Water heating is the largest source of greenhouse gas emissions from an average Australian home and the second largest segment of household energy use in Australia, after space heating and cooling. It accounts for about 21% of the energy and generates about 23% of the greenhouse gas emissions. – Australian Government

What are the different types of hot water systems?

We will go back to basics to begin – water heater types. There are two different types – storage systems and instantaneous flow systems – that run on different energy sources such as electricity, gas, solar and heat pumps. A little information about each type is found below.

Storage Water Heaters

Storage water heaters are just that – they store hot water for use when your home needs it. Storage occurs in tanks of different sizes and material types, and once all the stored water has been used only cold water will be available until the tank refills and heats again. Storage hot water systems can be switched to an ‘off-peak tariff’ mode whereby water is only heated during off-peak periods (which is usually at night, when energy prices are lower), which can save costs but does not save on greenhouse gas emissions. The big benefit of storage hot water systems is that they offer hot water instantly, whereas continuous flow systems can take a while to heat up.


Storage electric hot water systems are one of the most commonly used systems in Australia (around 50% of Australian households use electric storage hot water units). They are the most cost-effective options when it comes to purchasing a unit and installing it, however over the long term they can be quite expensive to run. An electric storage system works by storing heated water in an insulated tank and can be used when required. Water is kept at 60 °C for health reasons and the units can work from a gravity feed, otherwise known as constant pressure, tank or on mains pressure.

Tanks can come in different sizes and are made of different materials, mainly copper or glass (enamel) lined steel or stainless steel.


Storage gas hot water systems are also really efficient, due to the high temperatures that gas burns at and very little heat is wasted (compared to traditional electric systems). Gas storage hot water units use a gas burner, which is generally located at the bottom or underneath the storage tank, to continuously heat and maintain water at 60 °C. As the cost of gas is lower than electricity, it is becoming more and more popular and gas also heats up a tank of water a lot faster than many of its counterparts, meaning less time without hot water!

Heat Pump

Heat pump hot water systems are super energy efficient, and only use around 30% of the energy used by traditional electric systems (even though they run on electricity). They use renewable energy without needing extra panels like solar, by absorbing the heat in the surrounding air to heat water. Heat pump systems are also referred to as ‘air-source heat pumps’ and work like a fridge in reverse – they grab the heat from outside the storage tank and transfer it to the water inside through a heat exchange system.


Last but not least, there is solar. Hot water is almost the perfect electrical load when it comes to solar systems, where solar energy can be grabbed at any time and stored as heat. A good, well-insulated, solar hot water system is like a giant battery, which stores energy for use when you need it. You can heat the water stored in your tank whenever possible, and then be used at another time. You could store solar energy during the day on Monday, then use it on Tuesday morning without a hitch!

In Australia, about 48% of the energy used for water heating comes from natural gas, 45% from electricity, 3% from liquefied petroleum gas (LPG) and 4% from solar. – Australian Government

Continuous Flow Water Heaters

The other option is the continuous flow, otherwise known as instantaneous flow, hot water systems. These systems do not store heated water and instead, heat water as you need it. Although water can take a little while to heat up with this process, once heated you will never run out of hot water (unlike storage systems). The system works by having cold water flow through copper piping, and heat is then applied directly to the pipes.


Electric continuous flow water heaters or instant electric hot water systems are just as their name suggests – electricity-powered hot water systems that heat water as you need it. When turning on the hot water in your home, this triggers a flow sensor which commences the heating process. The heating element is triggered which allows the required water to be heated electrically before it gets to you as nice, toasty hot water. Instantaneous systems which run off electricity use less energy than electric storage units, however produce more greenhouse gases than gas storage units. Additionally, because a lot of people use water during peak times, electricity prices are on-peak (not off-peak like storage options) however you will never run out of hot water!


The other instantaneous option is fuelled by gas, which ensures no heat is lost during the heating process. They can have either a pilot flame or electronic ignition, which can be placed both internally and externally, but only if sufficient ventilation is an option. When you turn the hot tap on in your home, a flow sensor is triggered which starts the process. This sensor triggers a burner, which works with a heat exchange system to heat your water before it gets to your tap. A continuous flow of gas is required to deliver continuous hot water, therefore you must ensure you have appropriately sized gas pipes and gas meters to service the system.

More than half of hot water use is in the bathroom, a third in the laundry and the remainder in the kitchen.

Which hot water system is best?

The famous last question… and if only there was one answer. The type of hot water system that is best really depends on your circumstances – a 5 person household that lives in the suburbs with 3 bathrooms are going to require a different system to a single person living in the city in a studio apartment. Additionally, the aspects that are important to you will also affect your decision – would you like something more eco-friendly, or cost-effective (or both!), or that looks a particular way? All of these factors contribute to deciding which system is best for you, so it is super important that you complete your research and, if possible, speak to your local hot water plumber about the options and what is best for your area. In the interim, however, some advantages and disadvantages of the systems are as follows :

Electric Hot Water Systems


  • Low upfront costs
  • Easy to install
  • Reliable
  • Heat in off-peak times


  • Expensive long-term
  • Not environmentally friendly if not run on renewable sources

Heat Pump Hot Water Systems


  • Environmentally-friendly
  • High energy efficiency
  • Lower greenhouse gas emissions than traditional systems
  • Easy to install and connect
  • No need for solar panels, inverters or batteries
  • Long-term money savings


  • High upfront costs
  • Not ideal for really cold climates
  • Unreliable if not installed properly

Gas Hot Water Systems


  • Fewer greenhouse gas emissions
  • Generally have lower usage rates (depending on your area) compared to electricity
  • Long-term cost-effective option
  • Quick heat recovery times


  • Only really workable if connected to mains gas (using LPG bottles is very expensive)
  • Must be located outside (or exhaust fan inside)
  • Can lose heat quickly due to lack of insulation

Solar Hot Water Systems


  • Fewer greenhouse gas emissions
  • Lower energy bills
  • Eligible for some rebate schemes
  • Energy independence
  • Can be installed almost anywhere, as long as there is enough space
  • Virtually no maintenance


  • High upfront costs
  • Need lots of space for the system
  • Cloudy days don’t produce much energy
  • Lower production in winter months

Your local hot water specialists

If you have any questions regarding hot water systems, their capabilities and what system is best for your needs, give Brisbane Plumbing and Drainage a call on 1300 616 203 or complete an online contact form today. Our team knows everything there is to know about hot water systems, so get in contact to have a chat!

Check our Hot Water System Costs and Hot Water System Sizing guides to see what hot water system is the best size for you. ‍

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