Electric vs Gas Hot Water Systems: Which Is Better?

Choosing between an electric and gas hot water system depends on your home’s existing energy source, household size, number of bathrooms, budget, available space and daily hot water demand. Electric hot water can be practical for homes without gas or buyers wanting a straightforward storage tank replacement. Gas hot water can suit homes with natural gas or LPG where gas storage or instant gas hot water is already available.

At Hot Water Outlet, you can compare electric hot water systems, gas hot water systems, instant gas hot water systems, heat pump hot water systems, hot water systems and common valves, pipework and fittings.

Quick Answer: Is Electric or Gas Hot Water Better?

Electric hot water is often better for homes without gas, simple like-for-like electric storage replacements, units, townhouses and properties where a tank-style system is already installed.

Gas hot water is often better for homes that already have natural gas or LPG, especially where a gas storage or instant gas system is already fitted and the household wants to stay with gas.

As a general guide:

• Choose electric hot water systems if your home already has electric storage and you want a straightforward tank-style replacement.

• Choose heat pump hot water systems if you want an efficient electric storage option and have suitable outdoor space and airflow.

• Choose gas hot water systems if your home already uses gas storage and a traditional gas tank replacement suits the property.

• Choose instant gas hot water systems if your home has natural gas or LPG and continuous flow hot water suits your household.

• Do not choose gas unless you confirm whether the property uses natural gas or LPG.

• Do not choose electric storage or heat pump without checking tank size, power requirements, location and household demand.

The better option is usually the one that matches the home’s existing services and daily hot water use with the least unnecessary change.

Electric vs Gas Hot Water at a Glance

Both electric and gas hot water can be good choices when matched correctly. The wrong choice is usually the system that does not suit the property.

What Is an Electric Hot Water System?

An electric hot water system uses electricity to heat water. The most common type is electric storage, where water is heated and stored in a tank ready for use.

Electric hot water systems are usually sized by tank capacity in litres.

Electric storage may suit:

• Homes without natural gas or LPG

• Existing electric hot water replacements

• Units and townhouses

• Rental properties

• Small homes

• Family homes where the correct tank size is chosen

• Buyers wanting a familiar storage tank system

Electric hot water is often straightforward when replacing an existing electric tank, but the size still needs to suit the household.

What Is a Gas Hot Water System?

A gas hot water system uses natural gas or LPG to heat water. Gas systems are usually split into gas storage and instant gas.

Gas storage systems heat and store water in a tank.

Instant gas systems heat water as it flows through the unit and are sized by flow rate in L/min.

Gas hot water may suit:

• Homes already using natural gas or LPG

• Existing gas storage replacements

• Existing instant gas replacements

• Homes wanting continuous flow hot water

• Properties with suitable gas supply

• Households comparing gas storage and instant gas options

Gas can be a strong option where the property is already set up for it. The most important first check is gas type, because natural gas and LPG systems are not interchangeable.

Electric Storage vs Gas Storage

Electric storage and gas storage are both tank-style systems. They store heated water ready for use.

Electric storage may be better if your home already has electric storage and no gas supply.

Gas storage may be better if your home already uses gas storage and the current setup has worked well.

Electric Storage vs Instant Gas

Electric storage and instant gas are very different system types.

Electric storage keeps hot water in a tank. Instant gas heats water on demand.

Electric storage may be better if the home has no gas or already has an electric tank.

Instant gas may be better if the home already has natural gas or LPG and the selected flow rate suits the household.

Heat Pump vs Gas Hot Water

A heat pump is an electric hot water system, but it works differently from standard electric storage. It uses electricity to draw heat from the surrounding air and transfer it into stored water.

Heat pump hot water may be worth comparing if you want an efficient electric storage option.

A heat pump may be better if the home is electric-only and has suitable outdoor space.

Gas may be better if the home already has gas and the gas system is working well for the household.

Which Is Cheaper: Electric or Gas Hot Water?

The cheaper option depends on the system type, size, brand, energy source, replacement setup, accessories and whether you are comparing supply-only product pricing or full installed pricing.

Electric storage systems can be affordable upfront, especially for simple like-for-like replacements.

Heat pump systems usually cost more upfront than many standard electric storage systems but may be compared for energy efficiency.

Gas storage and instant gas prices vary by tank size, recovery rate, flow rate, gas type and brand.

When comparing cost, check:

• Product price

• System type

• Tank size or flow rate

• Brand

• Natural gas or LPG model

• Required valves and fittings

• Delivery requirements

• Whether installation is included or separate

• Whether electrical, gas or plumbing changes are needed

Hot Water Outlet sells supply-only hot water systems and accessories online. Supply-only pricing usually does not include plumbing, gas fitting, electrical work, disposal, pipework changes, valves or compliance work unless clearly stated.

Which Has Lower Running Costs: Electric or Gas?

Running costs depend on the system type, energy tariff, household use, system size, climate, gas availability, hot water habits and how well the system suits the home.

As a general guide:

• Standard electric storage may have higher running costs than some alternatives if poorly matched or used heavily.

• Heat pump hot water is commonly compared for improved electric hot water efficiency where the property suits it.

• Gas storage running costs depend on gas type, recovery, tank size and usage.

• Instant gas heats water on demand and may suit homes wanting continuous flow gas hot water.

• Oversized or undersized systems can reduce value, regardless of energy source.

Do not choose by energy type alone. Correct sizing and suitability matter heavily.

Electric Hot Water Pros

Electric hot water can be a strong choice when it suits the property.

Benefits may include:

• Common in many Australian homes

• Suitable for homes without gas

• Practical for like-for-like electric tank replacements

• Available in a wide range of tank sizes

• Suitable for many units, townhouses and rentals

• Can be compared with heat pump hot water for efficient electric upgrades

• No need to choose between natural gas and LPG models

Electric hot water is often simple to compare when the current system is already electric.

Electric Hot Water Cons

Electric hot water may not suit every home.

Potential drawbacks include:

• Standard electric storage may not be the most efficient option for every household

• The tank can run out if undersized

• Larger tanks need more space

• Electrical requirements must suit the property

• Heat pump upgrades need outdoor space and airflow

• Electric storage may not suit buyers wanting continuous flow hot water

The main mistake is choosing the wrong tank size or ignoring heat pump suitability where efficiency is a priority.

Gas Hot Water Pros

Gas hot water can be a strong choice when the home already has gas.

Benefits may include:

• Suitable for homes with natural gas or LPG

• Available as storage or instant gas

• Instant gas can provide continuous flow hot water where correctly sized

• Gas storage can suit traditional tank-style replacement

• Wall-mounted instant gas units can save space compared with large tanks

• Commonly compared for family homes and two-bathroom properties

• Good option where existing gas services are already suitable

Gas hot water works best when gas type, gas supply and system sizing are correct.

Gas Hot Water Cons

Gas hot water is not right for every property.

Potential drawbacks include:

• Natural gas and LPG models are not interchangeable

• Gas supply suitability must be checked

• Gas fitting work must be completed by licensed tradespeople

• Instant gas flow rate must match household demand

• A low-flow unit may not suit larger homes

• Changing from storage to instant gas may require extra assessment

• Homes without gas may face extra complexity if changing energy source

The main mistake is ordering the wrong gas type or choosing an undersized instant gas system.

Electric vs Gas for a Small Home

Small homes may suit either electric or gas depending on what is already installed.

Electric may suit a small home if:

• The property already has electric storage

• There is no natural gas or LPG

• A compact tank fits the available space

• The household has lower to moderate hot water demand

Gas may suit a small home if:

• Natural gas or LPG is already available

• The existing system is gas

• A compact instant gas unit suits the property

• The selected flow rate matches demand

For small homes, do not choose the smallest system automatically. Shower habits, bath use and kitchen or laundry demand still matter.

Electric vs Gas for a Family Home

Family homes usually need more careful sizing.

Electric may suit a family home if:

• The home already has electric storage

• A larger tank can fit

• The household wants a tank-style replacement

• A heat pump is suitable for the property

Gas may suit a family home if:

• Natural gas or LPG is already available

• Gas storage has worked well

• Instant gas flow rate suits the number of bathrooms

• The home needs strong peak hot water performance

For families, tank capacity, recovery rate and flow rate matter more than energy source alone.

Electric vs Gas for a Unit

Units often have space and building restrictions, so the existing system type is usually the best starting point.

Electric may suit a unit if:

• The unit already has electric storage

• There is limited external wall space

• Gas is not available

• A compact tank fits the current location

Gas may suit a unit if:

• The building already supports gas hot water

• Natural gas or LPG is confirmed

• External location and ventilation requirements are suitable

• Body corporate or building rules allow the system

Heat pumps may suit some units, but only where outdoor space, airflow, noise and building rules allow.

Electric vs Gas for a Townhouse

Townhouses may suit electric or gas depending on layout.

Electric may suit a townhouse if:

• The current system is electric storage

• The system is located in a garage, cupboard or courtyard

• The household wants a straightforward tank replacement

• A heat pump location is suitable

Gas may suit a townhouse if:

• Natural gas or LPG is already available

• The current system is gas storage or instant gas

• A compact instant gas unit suits the outdoor wall location

• Body corporate or complex rules allow it

For townhouses, check space, access, noise and any complex requirements before ordering.

Electric vs Gas for a Rental Property

Rental properties need a practical, reliable system that suits likely tenant demand.

Electric may suit a rental if:

• The rental already has electric storage

• A simple like-for-like replacement is preferred

• The property has no gas

• The tank size suits likely tenant demand

Gas may suit a rental if:

• The rental already uses gas

• Natural gas or LPG is confirmed

• The system has enough capacity or flow rate

• The replacement suits the number of bedrooms and bathrooms

For rentals, avoid undersizing. A cheaper small system can create tenant complaints if it cannot keep up.

Electric vs Gas for Renovations

Renovations are a good time to reassess electric vs gas hot water because demand and layout may change.

Electric may suit a renovation if:

• The home is already electric

• You want to compare heat pump options

• Outdoor space and airflow are available

• A larger tank is needed for the finished layout

Gas may suit a renovation if:

• The home already has natural gas or LPG

• You want to compare gas storage and instant gas

• A wall-mounted instant gas system suits the new layout

• Gas supply can support the selected model

Plan hot water around the finished home, not the old layout.

Electric vs Gas for One Bathroom

A one-bathroom home may suit electric or gas depending on usage.

Electric may suit if:

• The property already has electric storage

• The household has lower to moderate demand

• A compact or medium tank fits

• There is no gas supply

Gas may suit if:

• Natural gas or LPG is already available

• A 16 L/min or 20 L/min instant gas system suits demand

• The current gas system works well

• A compact wall-mounted system is preferred

One bathroom does not always mean low demand. A one-bathroom family home may still need a capable system.

Electric vs Gas for Two Bathrooms

A two-bathroom home often needs stronger hot water performance.

Electric may suit if:

• A medium to larger tank is selected

• A heat pump with suitable capacity and location is available

• The home has no gas

• Electric storage is already installed

Gas may suit if:

• The home has natural gas or LPG

• Gas storage has suitable tank capacity and recovery

• Instant gas flow rate is 20 L/min or 26 L/min where suitable

• Gas supply and water pressure can support the chosen unit

For two bathrooms, peak demand matters. Compare flow rate, recovery rate and household routines carefully.

Electric vs Gas When Replacing an Old System

If you are replacing an old system, start with what is already installed.

Like-for-like replacement may be practical when:

• The old system worked well

• The household size has not changed

• Bathroom count has not changed

• The energy source still suits the home

• The system location still works

• The replacement size is suitable

Changing energy source may be worth comparing when:

• The old system never kept up

• Renovations are changing demand

• The system location is changing

• Heat pump hot water is suitable

• Gas storage to instant gas is being considered

• The home’s services support the change

Changing from electric to gas, or gas to electric, can involve extra plumbing, gas or electrical work. Licensed tradespeople should assess suitability.

Should You Replace Electric Hot Water With Gas?

Replacing electric hot water with gas may be worth comparing only if the home has suitable natural gas or LPG access and the overall change makes sense.

Before changing from electric to gas, check:

• Whether natural gas or LPG is available

• Gas supply suitability

• System location

• Pipework requirements

• Number of bathrooms

• Household demand

• Product dimensions

• Required valves and fittings

• Licensed gas fitting requirements

If the home does not already have gas, electric storage or heat pump hot water may be more practical to compare.

Should You Replace Gas Hot Water With Electric?

Replacing gas hot water with electric may be worth comparing if the gas system is old, gas is no longer preferred, or the home is moving toward electric appliances.

Before changing from gas to electric, check:

• Electrical requirements

• Available tank or heat pump location

• Household hot water demand

• Current gas system type

• Whether heat pump is suitable

• Outdoor space and airflow if choosing heat pump

• Product dimensions

• Pipework and valve requirements

A heat pump may be worth comparing where an efficient electric storage option is preferred and the home has suitable outdoor space.

Electric vs Gas: What About Heat Pumps?

Heat pumps are often the main electric upgrade option for buyers comparing electric vs gas.

A heat pump may be worth comparing if:

• The current system is electric storage

• The home has suitable outdoor space

• Airflow is available

• Noise can be managed

• The household wants efficient electric storage

• The tank capacity suits daily demand

• Condensate drainage can be managed

A heat pump may not suit if:

• Outdoor space is limited

• Airflow is poor

• Noise location is unsuitable

• The system cannot physically fit

• The household demand does not suit the tank size

Heat pump selection depends on both energy efficiency and site suitability.

Electric vs Gas: What About Instant Electric?

Instant electric hot water is different from electric storage and heat pump hot water. It is generally used for suitable point-of-use applications rather than as a simple whole-home replacement.

Instant electric may suit:

• A hand basin

• A kitchenette

• A small localised hot water need

• A remote fixture

• Low-flow applications where electrical requirements match

Instant electric should not be treated as a direct alternative to gas continuous flow unless the product is specifically suitable for the intended demand.

Sizing Electric and Gas Hot Water Correctly

Electric and gas systems are sized differently.

Storage systems are measured by tank capacity in litres. This includes electric storage, heat pump and gas storage.

Instant gas systems are measured by flow rate in L/min.

Before choosing a size, check:

• Number of people

• Number of bathrooms

• Shower habits

• Bath use

• Kitchen hot water demand

• Laundry use

• Whether outlets run at the same time

• Current system size

• Whether the current system runs out

• Available space

• Energy source

• Product specifications

Do not compare litres and L/min as if they are the same thing. They measure different system types.

Natural Gas vs LPG

If choosing gas, gas type is one of the most important checks.

Gas systems may be:

• Natural gas

• LPG

Natural gas and LPG systems are not interchangeable.

Before ordering gas hot water, check:

• Current unit label

• Gas meter

• LPG bottle setup

• Existing appliance type

• Product listing gas type

• Licensed gas fitter advice if unsure

Choosing the wrong gas type can create delays and extra costs.

Valves, Fittings and Accessories

Electric and gas hot water replacements may need valves, fittings or pipework as well as the main unit.

Common items include:

• Tempering valves

• Pressure relief valves

• Duo valves

• Non-return valves

• Isolation valves

• Copper pipework

• Fittings

• Controller accessories for instant gas

• Thermostats

• Elements

• Connection parts

Hot Water Outlet has a dedicated range of valves, pipework and fittings to help customers compare common hot water accessories.

Always confirm compatibility before ordering.

Common Mistakes When Choosing Electric vs Gas Hot Water

Choosing by Price Alone

The cheapest system may not suit your energy source, household demand or replacement setup.

Ignoring Existing Services

The easiest option is often the one that matches the current energy source and location.

Choosing Gas Without Confirming Gas Type

Natural gas and LPG are different. Always choose the correct model.

Choosing Electric Without Checking Tank Size

A small electric tank may run out quickly in a family home.

Choosing Heat Pump Without Checking Location

Heat pumps need outdoor space, airflow, drainage and noise planning.

Choosing Instant Gas With Too Low a Flow Rate

A lower-flow instant gas unit may not suit two bathrooms or family demand.

Comparing Litres and L/min Incorrectly

Storage systems use litres. Instant gas systems use L/min.

Forgetting Valves and Fittings

The main unit may not be the full order. Accessories may also be needed.

Electric vs Gas Hot Water Buyer Checklist

Before choosing electric or gas hot water, check:

• Current hot water system type

• Current brand and model

• Current tank capacity or flow rate

• Whether the current system keeps up

• Electricity, natural gas or LPG

• Number of people in the home

• Number of bathrooms

• Number of showers per day

• Bath use

• Kitchen hot water use

• Laundry use

• Whether outlets are used at the same time

• Desired system type

• Tank capacity if storage

• Flow rate in L/min if instant gas

• Recovery rate if storage

• Gas supply suitability if gas

• Power requirements if electric

• Heat pump airflow if relevant

• Heat pump noise rating if relevant

• Product dimensions

• Connection positions

• Required valves and fittings

• Delivery access

• Warranty information

• Product specifications

Compare Electric and Gas Hot Water Systems Online

Hot Water Outlet makes it easier to compare electric and gas hot water systems by type, brand, size, energy source and product specifications.

Start with:

• Electric Hot Water Systems

• Gas Hot Water Systems

• Instant Gas Hot Water Systems

• Heat Pump Hot Water Systems

• Hot Water Systems

• Valves, Pipework and Fittings

FAQs About Electric vs Gas Hot Water

Is electric or gas hot water better?

Electric hot water is often better for homes without gas or existing electric storage replacements. Gas hot water is often better for homes already using natural gas or LPG. The best option depends on the property, household demand and current setup.

Is electric hot water cheaper than gas?

Product cost depends on system type, size, brand and specifications. Electric storage may be cheaper upfront than some alternatives, while heat pumps and gas systems vary by model and suitability.

Is gas hot water cheaper to run than electric?

Running costs depend on gas type, electricity tariff, system efficiency, household use and correct sizing. Heat pump hot water may be worth comparing as an efficient electric option, while instant gas may suit homes already using gas.

Should I replace electric hot water with gas?

Only if natural gas or LPG is available and the property suits gas hot water. Changing from electric to gas can involve extra gas fitting, plumbing and location requirements.

Should I replace gas hot water with electric?

This may be worth comparing if the home wants to move away from gas or a heat pump is suitable. Check electrical requirements, tank location, outdoor airflow and household demand before ordering.

Is heat pump better than gas hot water?

A heat pump may be better for homes wanting efficient electric storage and suitable outdoor space. Gas may be better for homes already using natural gas or LPG where gas storage or instant gas suits the household.

Is instant gas better than electric storage?

Instant gas may suit homes with natural gas or LPG that want continuous flow hot water. Electric storage may suit homes without gas or buyers wanting a tank-style replacement.

Is electric hot water good for families?

Electric hot water can suit families if the tank size and recovery rate match demand. Families may also compare heat pump options where the property has suitable outdoor space and airflow.

Is gas hot water good for families?

Gas hot water can suit families where natural gas or LPG is already available. Gas storage should be sized by tank capacity and recovery rate, while instant gas should be sized by flow rate in L/min.

Can I install electric or gas hot water myself?

No. Hot water systems involve plumbing, electrical and gas work that should be completed by appropriately licensed tradespeople. Hot Water Outlet sells supply-only hot water systems and accessories online, and may help organise quotes from reputable installers where appropriate.

Find the Right Electric or Gas Hot Water System

The right hot water system is the one that suits your home’s energy source, household demand, available space and replacement setup. Electric hot water may suit homes without gas or existing electric storage replacements. Gas hot water may suit homes already using natural gas or LPG. Heat pump hot water may be worth comparing where efficient electric storage is preferred and the location suits.

Browse hot water systems online with Hot Water Outlet to compare electric, gas, instant gas, heat pump and hot water accessories by brand, size and product specifications.