Gas vs Electric Hot Water Systems: Cost, Suitability and Key Differences

Choosing between gas and electric hot water depends on your home’s energy source, household size, current setup, budget, available space and daily hot water demand. Gas hot water can be a strong option for homes already connected to natural gas or LPG, while electric hot water is often practical for homes already using an electric storage tank or properties without gas.

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

Quick Answer: Is Gas or Electric Hot Water Better?

Gas hot water may be better if your home already has natural gas or LPG, and you want to compare gas storage or continuous flow hot water options.

Electric hot water may be better if your home does not have gas, already has an electric storage tank, or you want a straightforward like-for-like replacement.

As a general guide:

• Choose gas hot water systems if your home already uses gas and you want a gas storage replacement.

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

• Choose electric hot water systems if your home already uses electric storage or does not have gas.

• Choose heat pump hot water systems if you want to compare energy-efficient electric storage options and have a suitable location.

• Always check gas type, tank size, flow rate, dimensions, connection positions and product specifications before ordering.

The best choice is usually the system that suits your existing setup. Changing from gas to electric, or electric to gas, can involve extra requirements, so it should be planned carefully with licensed tradespeople.

Gas vs Electric Hot Water at a Glance

Both gas and electric hot water can work well. The better option depends on the property, not just the system category.

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 two main categories: gas storage and instant gas.

A gas storage system heats and stores water in a tank. An instant gas system heats water as it flows through the unit and does not store a large tank of hot water.

Gas hot water systems are commonly compared by:

• Natural gas or LPG

• Gas storage or instant gas

• Tank capacity

• Flow rate in L/min

• Recovery rate

• Controller options

• Dimensions

• Connection positions

• Outdoor suitability

• Brand and model

• Warranty information

• Product specifications

Gas hot water may suit homes that already have gas available and want to stay with gas for replacement or renovation planning.

What Is an Electric Hot Water System?

An electric hot water system uses electricity to heat water. The most common option is electric storage, where water is heated and stored inside a tank until it is needed.

Electric hot water can also include instant electric systems for suitable point-of-use applications and heat pump hot water systems for homes wanting an efficient electric storage option.

Electric hot water systems are commonly compared by:

• Tank capacity

• Recovery rate

• Power requirements

• Dimensions

• Connection positions

• Pressure rating

• Indoor or outdoor suitability

• Brand and model

• Warranty information

• Product specifications

Electric hot water may suit homes that already use electric storage, do not have gas, or want to compare heat pump alternatives.

Gas Storage vs Electric Storage Hot Water

Gas storage and electric storage systems both keep hot water in a tank, but they use different energy sources.

Gas storage uses natural gas or LPG. Electric storage uses electricity.

If your current system is gas storage, a new gas storage unit may be a practical starting point. If your current system is electric storage, a new electric tank may be the simpler comparison.

Instant Gas vs Electric Storage Hot Water

Instant gas and electric storage are very different system types.

Instant gas heats water on demand using natural gas or LPG. Electric storage heats and stores water in a tank using electricity.

Choose instant gas if your home already has gas and you want continuous flow hot water. Choose electric storage if your home is already set up for an electric tank and you want a practical replacement.

Gas Hot Water vs Heat Pump Hot Water

A heat pump is an electric hot water system that uses heat from the surrounding air to help heat stored water. It is commonly compared by buyers wanting an efficient electric option.

Gas hot water uses natural gas or LPG. A heat pump uses electricity and air-source heat.

Choose heat pump hot water systems if you want an electric storage option with better efficiency potential and your home has a suitable location. Choose gas hot water if your property already has gas and you want to stay with gas.

Gas vs Electric Hot Water Costs: What Affects the Price?

The cost of a gas or electric hot water system can vary depending on the product type, size, brand, specifications and replacement requirements. It is not as simple as saying gas is always cheaper or electric is always cheaper.

Key cost factors include:

• System type

• Tank capacity

• Flow rate

• Brand

• Product warranty information

• Natural gas or LPG model

• Heat pump vs standard electric storage

• Required valves and fittings

• Existing connection layout

• Delivery requirements

• Whether the new system is like-for-like

• Whether system type is being changed

A simple like-for-like replacement is usually easier to compare than changing from gas to electric or electric to gas. Switching energy types can involve extra work and should be assessed by licensed tradespeople.

Purchase Price: Gas vs Electric Hot Water

Standard electric storage systems are often one of the more straightforward hot water product categories to compare by purchase price. Gas storage and instant gas systems can vary depending on brand, size, flow rate and controller options.

Heat pump hot water systems usually have a higher upfront product cost than many standard electric storage tanks, but they are often compared for long-term energy efficiency.

When comparing purchase price, check:

• Main unit cost

• Tank size or flow rate

• Brand and model

• Product warranty information

• Included components

• Required accessories

• Whether valves or fittings are needed

• Whether the product suits the existing setup

A cheaper unit is not good value if it is the wrong gas type, wrong size, wrong flow rate or wrong configuration for the property.

Running Costs: Gas vs Electric Hot Water

Running costs depend on energy prices, household usage, system efficiency, tariff arrangements and product type.

Gas hot water running costs can vary depending on whether the system uses natural gas or LPG, how much hot water the household uses and whether the system is gas storage or instant gas.

Electric hot water running costs can vary depending on the tank size, usage pattern, tariff, recovery rate and whether the system is standard electric storage or heat pump.

A heat pump can use less electricity than standard electric storage in suitable conditions, but it needs the right location, airflow and product selection.

When comparing running costs, consider:

• Daily hot water use

• Number of people in the home

• Energy tariffs

• Natural gas or LPG prices

• Product efficiency

• System age

• Tank size

• Flow rate

• Recovery rate

• Heat loss

• Usage patterns

The best comparison is not just gas vs electric. It is gas storage vs instant gas vs electric storage vs heat pump, matched to your home.

Gas vs Electric Hot Water for Like-for-Like Replacement

For many buyers, the best starting point is the system already installed.

If you currently have gas hot water, compare gas options first. If you currently have electric hot water, compare electric options first.

A like-for-like replacement may be practical if:

• The current system worked well

• Household demand has not changed

• The system location still works

• The same energy source is available

• The size or flow rate still suits the household

• The connection layout can be matched

• A simple replacement is preferred

You may want to compare alternatives if:

• The old system often ran out

• Household demand has increased

• A new bathroom has been added

• You are renovating

• The current system is expensive to run

• You want to compare heat pump options

• You want to move from gas storage to instant gas

• The current system no longer suits the home

Like-for-like is often simpler, but it is still worth comparing the main hot water categories before ordering.

Gas vs Electric Hot Water for Family Homes

Family homes usually need stronger hot water performance than smaller households. The best choice depends on the number of people, number of bathrooms and how hot water is used during peak times.

Gas may suit a family home if:

• The property already has natural gas or LPG

• The household wants gas storage or instant gas

• The selected flow rate suits multiple users

• The gas storage recovery rate suits demand

• The correct gas type is selected

Electric may suit a family home if:

• The property already has electric storage

• The household wants a storage tank

• The selected tank size suits demand

• The home does not have gas

• A heat pump is being compared as an electric upgrade

For families, tank size, recovery rate and flow rate matter more than the energy type alone.

Gas vs Electric Hot Water for Small Homes

Small homes, units and townhouses may have lower hot water demand, but the right system still depends on the property.

Gas may suit a small home if:

• Natural gas or LPG is already available

• Instant gas can be matched to demand

• A compact wall-mounted gas system is preferred

• The current system is already gas

Electric may suit a small home if:

• The home does not have gas

• The current system is electric storage

• A smaller tank suits the household

• Instant electric is suitable for a specific point-of-use application

• Space and access favour electric storage

A small property should not automatically choose the smallest system. Daily use, shower habits and available services still matter.

Gas vs Electric Hot Water for Rental Properties

For rental properties, practical replacement and correct sizing are important. The best hot water system is usually one that suits the existing setup, expected tenant demand and property layout.

Gas may suit a rental property if:

• The property already uses gas hot water

• The gas type is known

• A gas storage or instant gas replacement suits the layout

• The selected system matches tenant demand

Electric may suit a rental property if:

• The property already uses electric storage

• A simple tank replacement is preferred

• There is no gas supply

• Heat pump hot water is being considered for an efficient electric option

For rentals, avoid choosing by purchase price alone. The system needs to suit the property and provide reliable hot water for the expected household size.

Gas vs Electric Hot Water for Renovations

Renovations are a good time to reassess hot water. A new bathroom, larger bath, kitchen upgrade or laundry renovation can change how much hot water the property needs.

During a renovation, compare:

• Current energy source

• Future number of bathrooms

• Bath and shower demand

• Kitchen and laundry changes

• System location

• Tank size or flow rate

• Required valves and fittings

• Space for the selected unit

• Whether gas or electrical work is required

Gas may suit a renovation if the property already has suitable gas and the household wants gas storage or continuous flow. Electric may suit if the home already has electric storage or a heat pump location can be planned properly.

Browse valves, pipework and fittings if your project also needs hot water accessories or connection parts.

Natural Gas vs LPG vs Electricity

Before comparing gas and electric hot water, confirm what energy sources are available.

Natural Gas

Natural gas is supplied through a gas network where available. If your home already has natural gas, you may be able to compare natural gas storage or instant gas systems.

LPG

LPG is commonly supplied through bottles or bulk supply. LPG hot water systems must be specifically designed for LPG. Natural gas and LPG models are not interchangeable.

Electricity

Electricity is available to most homes and can support electric storage, heat pump and some instant electric systems where suitable. Electrical requirements vary between products.

The best system usually starts with the energy source already available at the property.

What Size Gas or Electric Hot Water System Do I Need?

Sizing depends on system type.

Gas storage and electric storage systems are usually sized by tank capacity in litres. Instant gas systems are sized by flow rate in L/min. Heat pumps are sized by tank capacity, but location and airflow also matter.

When choosing a size, consider:

• Number of people in the home

• Number of bathrooms

• Number of showers per day

• Bath use

• Kitchen hot water use

• Laundry hot water use

• Whether hot water is used at the same time

• Current system size

• Whether the current system runs out

• Recovery rate

• Flow rate for instant gas

• Available space

The right size is not always the biggest. It is the system that matches household demand without being unnecessarily oversized.

Gas Hot Water Pros and Cons

Potential Advantages of Gas Hot Water

Gas hot water can be a practical option for homes already connected to natural gas or LPG.

Potential advantages include:

• Good fit for homes already using gas

• Choice of gas storage or instant gas

• Continuous flow options available

• Compact wall-mounted instant gas options

• Traditional storage tank options available

• Natural gas and LPG models available

• Suitable for many family homes and replacement projects

Potential Disadvantages of Gas Hot Water

Gas hot water is not suitable for every property.

Potential disadvantages include:

• Requires natural gas or LPG

• Correct gas type must be selected

• Gas models are not interchangeable

• Gas supply must be suitable

• Gas work must be completed by licensed tradespeople

• Instant gas flow rate must match demand

• Gas storage recovery rate must be checked

Gas hot water is often best where the property already has gas and the selected system matches household demand.

Electric Hot Water Pros and Cons

Potential Advantages of Electric Hot Water

Electric hot water can be practical for many homes, especially where electric storage is already installed.

Potential advantages include:

• Common and familiar storage tank option

• Good for like-for-like electric replacements

• Suitable for homes without gas

• Wide range of tank sizes

• Heat pump alternatives available

• Instant electric options for suitable point-of-use applications

• Available from recognised brands

Potential Disadvantages of Electric Hot Water

Electric hot water is not automatically the best choice for every home.

Potential disadvantages include:

• Standard electric storage can use more electricity than heat pump options

• Tank size must be chosen carefully

• A small tank may run out quickly

• Larger tanks need more space

• Recovery rate varies by model

• Electrical requirements must be checked

• Heat pumps need space, airflow and location planning

Electric hot water is often best where the home already uses electricity for hot water or where gas is not available.

Should You Switch From Gas to Electric Hot Water?

Some households consider switching from gas to electric, especially when replacing an old gas system or reviewing long-term energy plans. Whether it makes sense depends on the property.

Before switching from gas to electric, consider:

• Current gas setup

• Whether gas is used for other appliances

• Electrical requirements

• Available space

• Whether a heat pump is suitable

• Hot water demand

• Removal or disconnection requirements

• Required plumbing changes

• Licensed trade requirements

Switching energy types is more involved than like-for-like replacement. It should be assessed properly before ordering.

Should You Switch From Electric to Gas Hot Water?

Some homes consider switching from electric to gas if natural gas or LPG is available and the household wants gas storage or instant gas.

Before switching from electric to gas, consider:

• Whether gas is available

• Natural gas or LPG type

• Gas supply capacity

• New gas connection requirements

• Location for the system

• Flow rate or tank size

• Plumbing changes

• Licensed gas fitting requirements

• Whether instant gas or gas storage is preferred

If your home does not already have gas, switching to gas may involve extra work. Compare the full requirements before deciding.

Brands to Compare for Gas and Electric Hot Water

Hot Water Outlet lists recognised hot water brands so buyers can compare systems by energy source, size, product type and specifications.

Depending on the system you need, you may want to compare:

• Rheem hot water systems

• Rinnai hot water systems

• Dux hot water systems

• Bosch hot water systems

• Vulcan hot water systems

• iStore hot water systems

• Stiebel Eltron hot water systems

• Envirosun hot water systems

• Emerald Energy hot water systems

Brand can help narrow your search, but the final decision should still come down to gas type, energy source, tank size, flow rate, dimensions, connection positions and product specifications.

What to Check Before Buying Gas or Electric Hot Water

1. Current System Type

Check whether the existing system is gas storage, instant gas, electric storage, heat pump or another type.

2. Energy Source

Confirm whether the property uses natural gas, LPG or electricity.

3. Gas Type

If buying gas, confirm natural gas or LPG. Do not guess.

4. Tank Size or Flow Rate

Storage systems are compared by tank capacity. Instant gas systems are compared by flow rate in L/min.

5. Household Demand

Consider the number of people, bathrooms, showers, baths, kitchen use and laundry use.

6. Dimensions

Check that the selected system fits the available space.

7. Connection Positions

Compare hot, cold, gas and electrical connection positions against the current setup.

8. Required Valves and Fittings

Some replacements need valves, pipework and fittings. Check the full order before purchasing.

9. Licensed Trade Requirements

Gas, electrical and plumbing work should be handled by appropriately licensed tradespeople.

10. Warranty Information

Compare warranty details between brands and models before ordering.

Common Mistakes When Comparing Gas and Electric Hot Water

Choosing by Price Alone

The cheapest unit is not always the best option. It still needs to suit the home, energy source, size and connection layout.

Ignoring Existing Energy Source

The system already installed is usually the best starting point. Changing energy types can add complexity.

Buying the Wrong Gas Type

Natural gas and LPG models are not interchangeable. Always confirm the gas type before ordering.

Comparing Litres and L/min Incorrectly

Storage systems are measured in litres. Instant gas systems are measured in L/min. These are different sizing methods.

Forgetting Heat Pump Options

If you are comparing electric storage, it may be worth also comparing heat pump hot water systems if the property has suitable space and airflow.

Not Checking Dimensions

A system may have the right capacity but still not fit the available location.

Forgetting Valves and Fittings

Hot water systems may need extra valves, pipework or fittings depending on the replacement setup.

Assuming DIY Is Suitable

Hot water systems involve plumbing, gas and electrical work. These tasks should be completed by licensed tradespeople.

Buyer Checklist: Gas vs Electric Hot Water

Before choosing between gas and electric hot water, check:

• Current hot water system type

• Current brand and model

• Current tank size or flow rate

• Natural gas, LPG or electricity

• Household size

• Number of bathrooms

• Daily hot water demand

• Gas storage, instant gas, electric storage or heat pump preference

• Tank capacity

• Flow rate in L/min if instant gas

• Recovery rate

• Dimensions

• Connection positions

• Indoor or outdoor suitability

• Heat pump airflow requirements if relevant

• Noise rating if choosing a heat pump

• Power requirements

• Gas requirements

• Required valves and fittings

• Delivery access

• Warranty information

• Product specifications

So, Should You Choose Gas or Electric Hot Water?

Choose gas hot water if your home already has natural gas or LPG and you want to compare gas storage or continuous flow hot water options.

Choose electric hot water if your home does not have gas, already uses electric storage or you want to compare standard electric and heat pump options.

In many cases, the most practical option is the one closest to your current setup. If you already have gas hot water and it works well for the household, compare gas options first. If you already have electric storage, compare electric and heat pump options first.

The right choice depends on the property, not just the energy source.

Compare Gas and Electric Hot Water Systems Online

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

Start with:

• Gas Hot Water Systems

• Instant Gas Hot Water Systems

• Electric Hot Water Systems

• Heat Pump Hot Water Systems

• Hot Water Systems

• Valves, Pipework and Fittings

FAQs About Gas vs Electric Hot Water

Is gas or electric hot water better?

Gas hot water may be better for homes already connected to natural gas or LPG. Electric hot water may be better for homes without gas or properties already using electric storage. The best option depends on your current setup, household demand and replacement requirements.

Is gas hot water cheaper than electric?

Costs vary depending on energy prices, household use, system size, product type and tariff arrangements. Gas may suit homes already connected to gas, while electric may suit homes without gas. Heat pump hot water may also be worth comparing as an efficient electric option.

What is the difference between gas storage and electric storage hot water?

Gas storage heats and stores water using natural gas or LPG. Electric storage heats and stores water using electricity. Both use a tank, but the energy source and connection requirements are different.

Is instant gas better than electric hot water?

Instant gas may be better if your home has natural gas or LPG and you want continuous flow hot water. Electric storage may be better if your home does not have gas or already has an electric tank. The better option depends on the property.

Should I replace gas hot water with electric?

Replacing gas hot water with electric may be worth considering in some homes, but it depends on electrical requirements, space, hot water demand, existing gas use and whether a heat pump is suitable. Licensed tradespeople should assess the change.

Should I replace electric hot water with gas?

Replacing electric hot water with gas may be possible if natural gas or LPG is available, but it can involve extra gas fitting and plumbing work. Compare the full requirements before deciding.

Is heat pump hot water better than gas?

Heat pump and gas hot water suit different homes. Heat pumps may suit homes wanting efficient electric storage with suitable outdoor space and airflow. Gas hot water may suit homes already connected to natural gas or LPG.

What size gas or electric hot water system do I need?

The right size depends on household size, number of bathrooms, shower habits, bath use, laundry use and kitchen use. Storage systems are measured in litres, while instant gas systems are measured by flow rate in L/min.

Can I install a gas or electric hot water system myself?

No. Hot water systems involve plumbing, gas and electrical 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.

Do I need valves and fittings with gas or electric hot water?

Some replacements require valves, pipework or fittings depending on the system type, pressure rating and connection layout. Browse valves, pipework and fittings and confirm compatibility before ordering.

Find the Right Gas or Electric Hot Water System

Gas and electric hot water systems can both be good choices when matched to the right home. Gas may suit properties with natural gas or LPG. Electric may suit homes without gas or those already using electric storage. Heat pump hot water may be worth comparing if you want an efficient electric option and have a suitable location.

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