Electric vs Gas vs Solar: Which Hot Water System Is Right for You?

Choosing the Right Hot Water System

Hot water accounts for around 25% of the average Australian household's energy use, so choosing the right system has a real impact on both your bills and your carbon footprint. But with electric, gas, solar, and heat pump systems all vying for your attention, how do you know which one is right for your Central Coast home?

The answer depends on your household size, your roof orientation, your existing connections, and your budget. In this guide, we'll break down the pros, cons, and approximate costs of each system type so you can make an informed decision.

Electric Hot Water Systems

Electric storage hot water systems are the most common and the cheapest to install, but the most expensive to run. They heat water using resistive elements inside an insulated tank, keeping it hot throughout the day and night.

• Pros: Cheapest upfront cost, simple installation, works in any climate, no gas connection required
• Cons: Highest running costs, less energy efficient, can run out of hot water during peak demand
• Best for: Small households, apartments, or homes without a gas connection

Gas Hot Water Systems

Gas storage and continuous flow (instantaneous) systems heat water using natural gas or LPG. Continuous flow systems only heat water on demand, which means you'll never run out — and they're significantly cheaper to run than electric storage systems.

• Pros: Lower running costs than electric, endless hot water with continuous flow, compact size, fast recovery rate
• Cons: Requires a gas connection, higher upfront cost than electric, needs professional installation and annual servicing
• Best for: Medium to large households that use a lot of hot water

Solar Hot Water Systems

Solar hot water systems use roof-mounted collectors to harness the sun's energy, with a gas or electric booster for cloudy days. On the Central Coast, where we enjoy plenty of sunshine, solar can reduce your hot water running costs by up to 75%.

• Pros: Lowest running costs, most environmentally friendly, generous government rebates available, ideal for sunny Central Coast climate
• Cons: Highest upfront cost, requires suitable north-facing roof, performance drops on cloudy days (boosted by gas or electric)
• Best for: Environmentally conscious households with good roof orientation and a long-term view on savings

Heat Pump Hot Water Systems

Heat pumps work like a reverse refrigerator, extracting heat from the air and using it to warm your water. They're up to three times more efficient than electric storage systems and don't require roof panels, making them a great alternative when solar isn't suitable.

• Pros: Highly efficient, lower running costs than electric, doesn't need roof panels, eligible for government rebates
• Cons: Higher upfront cost, less effective in very cold climates, can be noisy
• Best for: Homes where solar isn't suitable but you still want low running costs

Approximate Costs (2025)

Pricing varies depending on your home's existing setup, the size of the system, and whether any plumbing or electrical upgrades are needed. Below are rough ranges to help you budget. For an accurate, upfront fixed price, call 048 Plumber Central Coast on 1300 048 048.

• Electric storage replacement: $900 - $3,500
• Gas continuous flow (supply & install): $1,200 - $3,600
• Solar hot water (supply & install): $3,000 - $5,500
• Heat pump (supply & install): $2,500 - $4,500

Which System Should You Choose?

For most Central Coast families, a gas continuous flow or heat pump system offers the best balance of upfront cost and long-term savings. If you have a north-facing roof and plan to stay in your home for 5+ years, solar will pay for itself many times over.

Still unsure? Our licensed plumbers can assess your home, your hot water usage, and your existing connections, then recommend the best system for your needs and budget. We supply, install, and service all major brands including Rheem, Rinnai, Dux, Bosch, and Aquamax.