Best Hot Water Systems in 2026 as reviewed by Australian consumers

Types of hot water systems
Storage vs instantaneous hot water systems
What to consider when choosing a hot water system

A gas hot water system mounted on a white brick wall.

Types of hot water systems

Heating water for use in the bathroom, kitchen, and laundry uses over a quarter of the average household’s energy, which is why it’s important to carefully consider what kind of hot water system is right for you.

You’ll have to first decide what kind of heating method you want to use for your hot water system: gas, electric, solar, or heat pump.

Gas hot water systems · See all

Gas is quite an efficient energy source, so it can be a good option if you have a natural gas connection. Natural gas is significantly cheaper than LPG.

These systems are usually installed outdoors because they need adequate ventilation, but they can be installed indoors with a flue.

Pros

Running costs are cheaper than electric systems.

More efficient and environmentally friendly than electric models.

Cons

Initial cost is more expensive than electric systems.

Not as environmentally friendly as solar and heat pump options.

There’s uncertainty over gas prices in the future - it’s predicted it will become more expensive.

Electric hot water systems · See all

Electric water heating is relatively cheap to buy and install, but ongoing costs can be expensive. However, if your meter includes off-peak rates, then this should be cheaper.

Pros

Cheaper to buy and install than gas hot water systems.

Can be installed both indoors or outdoors.

Available in a variety of sizes to suit different households.

Cons

Most expensive to run because of electricity prices.

Solar hot water systems · See all

A solar hot water system needs to be installed in a sunny spot for it to be efficient. This means that they do tend to work better in certain parts of Australia, particularly Queensland and the Northern Territory. You might even want to buy a larger tank for days with less sun or when you want to use more hot water.

Most of these systems will still have either a gas or electric booster to ensure that hot water is always available, regardless of the climate.

Pros

Environmentally friendly.

Running costs are low, and may even provide a large chunk of your hot water for free.

Cons

Expensive to purchase, but government rebates and incentives can help offset this.

Their performance is dependent on the placement of the rooftop collector and the weather.

Heat pump hot water systems

Heat pump systems use electricity to transfer heat from one place to another rather than directly generating heat. These units need to be installed in a place with good ventilation, generally outdoors. Heat pump models can save you up to 80% on the cost of hot water compared to an electric storage system.

Pros

Highly efficient, making them economical to run.

Can be found in a range of sizes to suit different households.

Don’t require rooftop collectors, so can be a good option when solar access isn’t optimal.

Cons

The unit’s compressor can be noisy.

High initial cost, but government rebates may be available to help offset this.

Storage vs instantaneous hot water systems

A hot water system can be either an instant system or a storage tank system.

Instant systems

Also called continuous hot water systems, these only heat water when they're needed. They aren’t actually instant, but they usually just take a few seconds before you get hot water. Most models use gas, but you can still find electric models, which are typically only designed to heat water for a single water outlet.

A continuous flow system can be more suited to smaller households, as they’re cheaper to run and more practical than having a storage tank.

f you’re considering an instant hot water system, then you should consider its flow rate. You should opt for a higher flow rate if you have many water outlets in your home. A general rule of thumb is to get a flow rate of around 22 to 24L per minute for a house with two bathrooms.

Storage tank systems

These store a certain amount of heated water that can then be used throughout the day. Most gas, electric, solar, and heat pump systems use a tank.

They’re generally more cost-effective and so can be suited to households that use a lot of hot water; you just need to ensure you get a large enough tank to ensure the last in line for a shower isn’t left in the lurch mid-rinse.

If you have off-peak electricity available to your home, then these systems can take advantage of these cheaper tariffs.

These tanks are insulated, but it’s still a good idea to install them in an insulated or sunny place to minimise heat loss.

A close up of a man washing their hands under a bathroom faucet.

What to consider when choosing a hot water system

There are a few other things you should consider when shopping around.

Your household size and energy use

Understanding the hot water needs of your household is key to getting the right hot water system. An undersized system means that someone will probably miss out on a hot shower, while a system that’s too large will mean you’re paying for something that you’re not fully using.

The average Australian uses around 40 to 50L of hot water per day - more if you take long hot showers or often use hot water to wash clothes.

Here’s a rough size guide for water heaters, but you should also consult the manufacturer of a hot water system you’re considering buying as well as seek advice from an installer.

For storage tank systems, consider the number of people in your household:

A 1-2 person household could be fine with a small storage tank of around 90L.
A 4-person household will need around 135-170L.
Households of 5 people or more may find it more economical to find a large tank of between 200-300L than install multiple continuous systems.

For continuous hot water systems, consider the number of hot water outlets in your home and peak usage:

A 2-bathroom household will need 22-24L/min flow rate.
If you expect 2 people to be showering at the same time, you need at least a flow rate of 14L/min.
There’s also the option to install multiple systems and have them in different parts of your home.

Energy efficiency

The most efficient type of hot water systems are heat pump and solar water heating systems.

If you’re shopping for an electric storage system, a gas storage system, or an instant gas hot water system, look for Minimum Energy Performance Standards (MEPS). You may see energy efficiency ratings on gas systems, but these aren’t government regulated.

Price

Excluding installation, prepare to pay the following upfront:

Gas hot water systems often cost between $900 and $2000.
Electric hot water systems usually cost somewhere between $500 and $2000.
Solar hot water system prices can vary a lot, but usually cost between $4000 and $8000.
Heat pump models range from $2000 to $4000.

Hot water system installation costs vary a lot depending on the job and system you opt for. If you’re switching out your current hot water system with one of the same capacity and in the same location, installation typically ranges from $300 to $700. If you’re moving the system to another location, then you may have to pay between $1100 and $2500 depending on what kind of plumbing and electrical work is required.

You should also check for warranties. While these vary, most hot water systems should come with a warranty of at least 7 years - the longer the warranty, the more the manufacturer backs the quality.

Look for government rebates and incentives

There are a range of incentives offered by the federal and state governments - such as the federal government’s Small-scale Renewable Energy Scheme - for households to switch to energy-efficient hot water systems, particularly solar and heat pump systems.

A hot water system installer may also be able to tell you about rebates that are available to those living in your area.

Best Hot Water Systems

Aquatech Heat Pump 🏆 2026

EvoHeat EVO270 Hot Water Heat Pump Series 🏆 2026

Haier Monoblock Heat Pump Water Heater 🏆 2026

iStore Hot Water Heat Pump 🏆 2026

Contents

Types of hot water systems

Gas hot water systems · See all

Electric hot water systems · See all

Solar hot water systems · See all

Heat pump hot water systems

Storage vs instantaneous hot water systems

Instant systems

Storage tank systems

What to consider when choosing a hot water system

Your household size and energy use

Energy efficiency

Price

Look for government rebates and incentives