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Hot Water System Types

Hot water is a basic, fundamental necessity of every home, but there are a variety of options and ways to get it running in your house. Choosing the right hot water system is imperative for your day to day use, convenience and budget.

There are two main choices to make when selecting your hot water solution:

  1. POWER: A choice between an electric, heat pump, gas or solar hot water system
  2. STORAGE: A choice between a storage tank or continuous flow systems (also known as instantaneous systems).

Wondering what type of hot water system you should be looking for?

Here is a brief overview of the different types and terms you need to know to find what will work best for you.

Electric water heaters are the most commonly used hot water systems due to their low purchase cost and the fact that they are usually quite easy to install. They are, however, the most expensive to run and will account for a large chunk of your ongoing electricity bill.

Solar hot water systems carry a much larger upfront cost, but are far cheaper to run, using anywhere from 65-90% less electricity. They have a more involved installation process and it’s important to consider the amount of roof space and sunlight you get to ensure this is a viable option for your home. There are, however, also options to boost your solar hot water heater so that your hot water is not impacted by a rainy day.

Heat pump systems run on similar technology to an air conditioner or fridge, extracting heat from the air and using it to heat the water. They also cost more than an electric hot water heater but cost significantly less to run.

Gas hot water systems are extremely good at delivering large amounts of hot water on demand with quicker heat recovery times than most other systems. They can run on natural gas or LPG gas and can be cheaper to run depending on gas prices vs electricity prices at the time. Keep in mind that they are ideally installed outside for ventilation, but can be installed indoors with a flue.

Continuous flow water heaters heat water as you need it. They are also known as instantaneous systems and heat the water on the way to the tap. Due to the speed required, most are gas instant water heaters, but they are all highly expensive to run and not ideal for most homes.

Storage systems heat up water and store it ready for use. Hot water storage tanks are usually the method of choice for most homes. The main factors you will need to consider is the size of the tank and if it will be big enough for your house needs, and if it will fit into the space you have for it.

Still not sure what sort of hot water system you should be looking at? We are here to help! Our team of experts at Same Day Hot Water Service has been helping people find the best water solutions for their residential or commercial properties for over 20 years!

Whether you need a brand new hot water system, are replacing an old one, or need emergency repairs – we have got you covered!

Types of Hot Water Systems We Offer

Which is the Most Efficient Type of Water System?

Efficiency is one of many people’s most significant deciding factors when shopping for new hot water systems.

Did you know hot water systems account for the second largest segment of household energy use, using anywhere from 15-27% of overall usage?

In fact, it is considered the largest source of greenhouse gas emissions from the average Australian home.

Your hot water system will also carry regular ongoing costs for energy, fuel, installation, maintenance, and general running costs. This makes choosing an efficient hot water system imperative.

In order of efficiency – these are our recommendations for hot water heaters based on their cost and energy use:


How much do hot water systems cost?

Different hot water systems have different prices, and the cost will vary depending on a number of factors including the type of system (ie. solar hot water system, electric hot water system, continuous flow system, heat pump, or natural gas), the water capacity and the brand of the hot water system.

Hot water system price ranges by type:


Solar water heaters use the least amount of electricity. While the upfront cost is largely due to the cost of solar panels and installation, solar power is a completely renewable resource. This has the added benefit of reducing energy costs with extremely low ongoing costs in comparison to other systems. A solar hot water system can also be boosted by alternate energy sources to ensure your solar hot water supply isn’t affected by a rainy day. Usually, this is done with either electricity or gas. It is important to remember that if you use a boosted supply through an electric system, the sustainability and efficiency rating will drop significantly. Before you write solar off due to the upfront cost – make sure you also look into any available government rebates that may assist you and your budget!


A heat pump water heater uses technology similar to a fridge, pulling the heat out of the air to turn refrigerant liquid into gas. It is less efficient than a gas system as it still requires electricity to heat water, but it uses other technology to continue to run.


Gas storage systems are another more environmentally friendly, energy efficient hot water system in comparison to the most common types like electric powered hot water systems. Gas water heaters can run on either LPG or natural gas which both work efficiently and are relatively sustainable. If you have a high demand for hot water and are looking at continuous flow systems, continuous flow gas hot water systems rated at 5 stars or above are usually the most efficient.


Up until recently, this water heating method has been the most commonly installed. Due to its inefficiency and effect on the environment, the federal government is trying to phase out electric hot water heaters. For example, a single unit will, on average, generate over four tonnes of greenhouse gas per year. Electric continuous flow water heaters are slightly more efficient in terms of providing heated water but is even more costly to run as they require 3 phase power.

A note on continuous flow versus storage hot water systems:

A continuous system will heat water only when it’s needed, and usually use less power than storage heaters like gas storage heaters that have to always run to keep the water hot. Instantaneous heating is popular because you don’t use extra electricity from the heat lost during storage. The down side is that in a high demand house, there may not be enough hot water to meet your needs. For example, a house with a dishwasher and washing machine running set to a hot water temperature, and multiple showers in use all at the same time may leave someone showering with cold water. A solution can be to use multiple continuous systems, or if that is too impractical and a storage system is still required, an insulated tank can assist to avoid unnecessary energy use due to heat losses.

When considering the energy efficiency and energy source, we highly recommend solar or a gas hot water system. We understand that some circumstances may still make a heat pump and electric hot water heaters the right choice for you, and can help you weigh up your options between the various types of hot water solutions.

Our team will give you expert advice and friendly service – helping you find the best suited hot water systems for you.

Which Hot Water System is Right For You?

Your budget

You will likely have to weigh up the upfront purchase cost versus the running costs of water heating. For instance, a solar water heater comes with a hefty price tag upfront, but you will general recoup that cost later over years of having significantly less energy costs. Alternatively, an electric storage system is relatively cheap to buy and install but will make up a significant portion of your energy bill in ongoing running costs.

The size you need

Smaller homes need far less hot water than larger ones or even commercial applications. Choosing the right size is important to make sure you have the right volume of hot water available for all your needs. The size will also be determined by the available space you have for the physical system in your home or facility.


The location has a big part to play in any hot water system. If you are restricted by physical space, you may not have room for a gas hot water system or large storage systems. If you are looking at a solar hot water supply, you will need to consider your roof and the location of things like trees and other buildings around you. You will need to ensure that there is enough sunlight as an energy source, to ensure it remains energy efficient and does its job. If you live in cold climates, a heat pump may not be as effective as other more sustainable types due to the technology design that pulls heat out of the air.

Your priorities

Some of the decisions about which hot water system is the best will come down to your personal priorities. You may have to weigh up whether you are more concerned about being environmentally friendly, how quickly water is heated, energy consumption to reduce energy bills or even the look and space of the system.

If you are having trouble deciding and need help choosing the right hot water system for you, contact us for our friendly, expert advice. We know all about what makes the best system, and can help you decide between various sizes, energy sources, and efficiency to find the system that is best for you.

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