Heat Pump vs Gas Hot Water Systems: Which Is Better?

Choosing between a heat pump and a gas hot water system depends on your home’s energy source, household size, available space, outdoor airflow, noise placement, gas type, budget and whether you want efficient electric storage or gas hot water. Heat pumps and gas systems can both suit Australian homes, but they work very differently.

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

Quick Answer: Is Heat Pump or Gas Hot Water Better?

A heat pump hot water system is usually better if you want efficient electric storage, do not want to rely on gas, and your property has suitable outdoor space, airflow, drainage and noise conditions.

A gas hot water system is usually better if your home already has natural gas or LPG, the existing gas setup works well, and you want to stay with gas storage or instant gas hot water.

As a general guide:

• Choose a heat pump hot water system if you are replacing electric storage and want an efficient electric option.

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

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

• Choose heat pump only if outdoor space, airflow, condensate drainage and noise placement are suitable.

• Choose gas only after confirming natural gas or LPG, because gas types are not interchangeable.

• Compare electric hot water systems if a standard electric tank replacement is more practical than heat pump or gas.

The better option is the one that suits the home’s services and layout. Heat pump is not automatically best for every home, and gas is not automatically best just because the old system used gas.

Heat Pump vs Gas Hot Water at a Glance

Both options can work well when selected correctly. The best choice depends on your property, not just the product category.

What Is a Heat Pump Hot Water System?

A heat pump hot water system uses electricity to draw heat from the surrounding air and transfer it into stored water. It is a storage system, so it has a tank and is sized by capacity in litres.

Heat pump hot water may suit homes where:

• The current system is electric storage

• Efficient electric hot water is preferred

• Outdoor space is available

• Airflow around the unit is suitable

• Noise can be managed

• Condensate drainage can be handled

• The tank capacity suits the household

• Gas is not available or not preferred

Heat pumps are often compared when replacing older electric storage systems, especially where the home has a suitable outdoor location.

What Is a Gas Hot Water System?

A gas hot water system uses natural gas or LPG to heat water. Gas hot water usually falls into two main categories: 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 where:

• Natural gas or LPG is already available

• The current system is gas storage

• The current system is instant gas

• A continuous flow system is preferred

• A compact wall-mounted external unit suits the property

• The gas supply is suitable for the selected model

• The household wants to stay with gas

The most important gas check is whether the property uses natural gas or LPG. These systems are not interchangeable.

Main Difference Between Heat Pump and Gas Hot Water

The main difference is energy source and system design.

A heat pump uses electricity and stores hot water in a tank.

Gas hot water uses natural gas or LPG and may be either storage or continuous flow.

This means heat pump and gas hot water should not be compared by price or size alone. They need to be compared by suitability.

Heat Pump Pros

Heat pump hot water can be a strong option for many homes replacing electric storage.

Benefits may include:

• Efficient electric hot water option

• Does not require natural gas or LPG

• Good replacement pathway from electric storage where location suits

• Can suit family homes when correctly sized

• May suit homes moving away from gas appliances

• Available from recognised hot water brands

• Can be compared with rebates or incentives where current schemes apply

Heat pump hot water is most attractive when the property has the right outdoor location and the household uses enough hot water to justify the system.

Heat Pump Cons

Heat pump hot water is not suitable for every property.

Potential drawbacks include:

• Higher upfront product price than many standard electric tanks

• Needs suitable outdoor space

• Needs airflow around the unit

• Needs noise placement planning

• Needs condensate drainage

• May not suit tight side passages or enclosed spaces

• May not suit some units or townhouses

• Delivery and access can be more important due to unit size

The main mistake is choosing a heat pump because it sounds efficient without checking whether the property can support it.

Gas Hot Water Pros

Gas hot water can be a strong choice where the home is already set up for it.

Benefits may include:

• Suitable for homes with existing 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

• Instant gas can save space compared with larger storage tanks

• Commonly compared for family homes and two-bathroom properties

• Often practical when replacing an existing gas system

Gas hot water usually works best when staying with an existing gas setup that already suits the property.

Gas Hot Water Cons

Gas hot water is not the best choice for every home.

Potential drawbacks include:

• Natural gas and LPG models are not interchangeable

• Gas supply must suit the selected system

• Gas fitting work must be completed by licensed tradespeople

• Instant gas flow rate must match household demand

• A low-flow instant gas unit may not suit larger homes

• Gas may not be available at the property

• Changing from electric to gas can add complexity

The main mistake is choosing gas without confirming gas type, gas supply and household flow demand.

Heat Pump vs Gas Storage Hot Water

Heat pump and gas storage systems are both storage systems, but they use different energy sources.

Heat pump may be better if the home is electric-focused and has a suitable location.

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

Heat Pump vs Instant Gas Hot Water

Heat pump and instant gas hot water are very different.

A heat pump stores hot water in a tank. Instant gas heats water on demand.

Instant gas may suit homes that want continuous flow hot water and already have natural gas or LPG.

Heat pump may suit homes that want efficient electric storage and have suitable outdoor space.

Which Is Cheaper: Heat Pump or Gas Hot Water?

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

Heat pumps usually have a higher upfront product price than many standard electric systems, but they are often compared for long-term energy efficiency.

Gas hot water pricing depends on whether you are buying gas storage or instant gas, the flow rate or tank size, gas type, brand and product specifications.

When comparing cost, check:

• Product price

• System type

• Tank capacity or flow rate

• Brand

• Natural gas or LPG model

• Required valves and fittings

• Delivery requirements

• Electrical work if choosing heat pump

• Gas fitting work if choosing gas

• Plumbing changes

• Whether old system removal is included or separate

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

Which Has Lower Running Costs: Heat Pump or Gas?

Running costs depend on the system type, electricity tariff, gas tariff, climate, household use, tank size, flow rate, location and how well the system suits the property.

As a general guide:

• Heat pumps are commonly compared for energy-efficient electric hot water.

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

• Instant gas running costs depend on flow demand, gas type and usage.

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

• Poor heat pump airflow can affect performance.

• Incorrect instant gas sizing can affect comfort and performance.

Do not choose only by running cost claims. Suitability and correct sizing are just as important.

Heat Pump vs Gas for Energy Efficiency

Heat pump hot water is usually compared for energy efficiency because it uses electricity to move heat from the air into the water, rather than relying only on direct electric resistance heating.

Gas efficiency depends on the product, gas type and system design. Instant gas heats water on demand and may suit homes that want continuous flow gas hot water.

When comparing energy efficiency, consider:

• Household hot water use

• Climate and outdoor conditions

• Heat pump airflow

• Tank capacity

• Gas system flow rate or recovery

• Energy tariffs

• System age

• Product specifications

• Whether the system is properly sized

A heat pump may be the better efficiency choice where the property suits it, but it must be installed in a suitable location.

Heat Pump vs Gas for Small Homes

Small homes can suit either heat pump or gas depending on what is already available.

Heat pump may suit a small home if:

• There is suitable outdoor space

• Airflow is available

• Noise placement works

• The household uses hot water regularly

• The selected tank size is not oversized

Gas may suit a small home if:

• Natural gas or LPG is already available

• A compact instant gas unit suits the external wall location

• The current system is gas

• 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.

Heat Pump vs Gas for Units

Units can be more difficult for heat pumps because outdoor space, airflow, noise and body corporate rules may restrict suitability.

Heat pump may suit a unit only if:

• Outdoor space is available

• Airflow is suitable

• Noise requirements can be met

• Body corporate rules allow it

• Condensate drainage is possible

• Delivery access works

Gas may suit a unit if:

• The building already supports gas hot water

• Natural gas or LPG is confirmed

• External location requirements can be met

• Body corporate or building rules allow the system

• The selected flow rate suits demand

For many units, the existing system type and building requirements are the best starting point.

Heat Pump vs Gas for Townhouses

Townhouses may suit either heat pump or gas depending on layout.

Heat pump may suit a townhouse if:

• There is a courtyard, side passage or outdoor area with airflow

• Noise can be managed

• Drainage can be handled

• Delivery access is suitable

• Body corporate or complex rules allow it

• The tank capacity suits household demand

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 wall location

• Gas supply is suitable

• Body corporate or complex rules allow it

Townhouses need careful checking because neighbours can be close and outdoor areas can be tight.

Heat Pump vs Gas for Families

Family homes usually need more careful sizing.

Heat pump may suit families if:

• The tank capacity suits daily demand

• Outdoor space and airflow are suitable

• Noise placement can be managed

• The family wants efficient electric hot water

• The property is replacing electric storage

Gas may suit families if:

• Natural gas or LPG is already available

• Gas storage has suitable capacity and recovery

• Instant gas has suitable flow rate

• The current gas setup works well

• Peak demand is high and continuous flow is preferred

For families, the best system depends on shower timing, bathrooms, bath use and laundry demand.

Heat Pump vs Gas for Two Bathrooms

Two-bathroom homes need careful sizing because hot water may be used in more than one place at once.

Heat pump may suit if:

• The selected tank capacity supports two-bathroom demand

• Outdoor space is available

• Airflow and noise placement are suitable

• The home wants efficient electric storage

Gas may suit if:

• Natural gas or LPG is available

• Gas storage has suitable 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 selected system

For two bathrooms, peak demand matters. Compare storage capacity, recovery rate and instant gas flow rate carefully.

Heat Pump vs Gas for Rental Properties

Rental properties need practical hot water systems that suit likely tenant demand.

Heat pump may suit a rental if:

• Outdoor location is suitable

• Airflow and noise conditions are acceptable

• Tank capacity suits likely tenants

• The owner wants to compare efficient electric hot water

• The current system is electric storage

Gas may suit a rental if:

• The rental already uses natural gas or LPG

• The current gas system has worked well

• The system is correctly sized for the bedrooms and bathrooms

• The replacement is straightforward

• Instant gas flow rate suits likely tenant demand

Avoid undersizing rental hot water. A cheaper system can create tenant complaints if it cannot keep up.

Heat Pump vs Gas for Renovations

Renovations are a good time to compare heat pump and gas because the layout, services and system location may change.

Heat pump may suit a renovation if:

• Outdoor location can be planned early

• Airflow and drainage can be allowed for

• The renovation increases hot water demand

• The owner wants efficient electric hot water

• The tank capacity suits the finished home

Gas may suit a renovation if:

• Natural gas or LPG is already available

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

• The current gas setup can support the selected system

• Gas storage or instant gas is preferred

• Licensed tradespeople confirm suitability

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

Heat Pump vs Gas With Solar Power

Some homeowners compare heat pump and gas hot water because they already have solar power or want to use more electric appliances.

A heat pump may be worth comparing with solar where:

• The system can be timed or managed appropriately

• The household uses hot water regularly

• Outdoor space and airflow are suitable

• The selected model supports the intended setup

• Licensed tradespeople confirm suitability

Gas may still suit homes that already have natural gas or LPG and want to stay with gas hot water.

Do not assume solar automatically makes any system the best choice. Tariffs, timing, system settings and household demand all matter.

Heat Pump Rebates vs Gas System Price

Some heat pump hot water systems may be eligible for rebates or incentives depending on current program rules, product eligibility, installer requirements, property details and state or territory.

Rebates can change, so they should not be assumed.

Before relying on a rebate, check:

• Current state or territory rules

• Product eligibility

• Installer requirements

• Customer eligibility

• Whether the program is still active

• Whether the product price already includes rebate assumptions

• Whether the system must be installed by an approved provider

A rebate can improve heat pump value, but it does not make every heat pump suitable. Location, airflow, tank size and household demand still matter.

Natural Gas vs LPG

If choosing gas hot water, gas type must be confirmed before ordering.

Gas systems may be:

• Natural gas

• LPG

Natural gas and LPG systems are not interchangeable.

Before ordering, check:

• Current hot water unit label

• Gas meter

• LPG bottle setup

• Existing appliance details

• Product listing gas type

• Licensed gas fitter advice if unsure

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

Heat Pump Location Requirements

Heat pump location is one of the biggest decision factors.

Before choosing a heat pump, check:

• Outdoor space

• Airflow around the unit

• Clearance from walls and fences

• Noise rating

• Distance from bedrooms

• Distance from neighbours

• Condensate drainage

• Delivery access

• Product dimensions

• Base or platform requirements

• Connection positions

• Electrical requirements

A heat pump with the right tank size can still be unsuitable if the location is poor.

Gas System Location Requirements

Gas hot water systems also need suitable placement.

Before choosing gas, check:

• Natural gas or LPG supply

• Existing gas line location

• Gas supply suitability

• Water connection positions

• Wall space for instant gas

• Tank space for gas storage

• Outdoor or indoor model suitability

• Product dimensions

• Clearance requirements

• Controller requirements if instant gas

• Licensed gas fitter assessment where needed

External gas units must be used in suitable outdoor locations unless the product is specifically designed and approved for internal flued installation.

Heat Pump vs Gas Sizing

Heat pump and gas systems are sized differently.

Heat pump systems are storage systems and are sized by tank capacity in litres.

Gas storage systems are sized by tank capacity and recovery rate.

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

Before choosing, check:

• Number of people in the home

• Number of bathrooms

• Number of showers per day

• Whether showers happen back-to-back

• Bath use

• Kitchen hot water use

• Laundry use

• Whether outlets run at the same time

• Current system size

• Whether the current system keeps up

• Available space

• Energy source

• Product specifications

Do not compare heat pump litres and instant gas L/min as if they are the same measurement.

Should You Replace Gas Hot Water With a Heat Pump?

Replacing gas hot water with a heat pump may be worth comparing if you want to move toward electric hot water and the property has a suitable location.

A heat pump may be worth considering if:

• Outdoor space is available

• Airflow is suitable

• Noise can be managed

• Condensate drainage can be handled

• Tank capacity suits household demand

• Electrical requirements can be met

• The household wants efficient electric storage

A gas replacement may be more practical if:

• The existing gas system works well

• Natural gas or LPG is already available

• Gas supply suits the selected model

• A like-for-like gas replacement is preferred

• Heat pump location is not suitable

Changing energy source can involve extra plumbing, electrical or gas work. Licensed tradespeople should assess suitability.

Should You Replace Heat Pump With Gas?

Replacing a heat pump with gas may be considered where the home already has suitable gas supply and gas hot water is preferred.

Before changing from heat pump to gas, check:

• Natural gas or LPG availability

• Gas supply suitability

• Outdoor wall or tank location

• Household hot water demand

• Flow rate if instant gas

• Tank capacity and recovery if gas storage

• Required valves and fittings

• Licensed gas fitting requirements

If gas is not already available, changing from heat pump to gas may add complexity and cost.

Should You Stay With Gas Hot Water?

Staying with gas hot water may be practical if the current gas system has worked well and the property is already set up for gas.

Staying with gas may suit when:

• Natural gas or LPG is available

• The current system is gas

• The gas supply is suitable

• A like-for-like replacement is preferred

• The household wants continuous flow hot water

• Heat pump location is not suitable

However, if the property has suitable outdoor space and the owner wants efficient electric hot water, a heat pump may be worth comparing.

Should You Choose Heat Pump Instead of Gas?

Heat pump may be worth choosing over gas if the property suits it and the household wants electric hot water.

Heat pump may suit when:

• The home is replacing electric storage

• Gas is not available or not preferred

• Outdoor space and airflow are suitable

• Noise placement is acceptable

• Tank capacity suits demand

• Energy efficiency is a priority

• The household wants to compare available rebates or incentives

Do not choose heat pump only because of efficiency claims. Choose it because it suits the home.

Common Mistakes When Comparing Heat Pump vs Gas

Choosing Heat Pump Without Checking Airflow

Heat pumps need outdoor space and airflow. A tight or enclosed location may be unsuitable.

Choosing Gas Without Confirming Gas Type

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

Comparing Tank Litres to L/min

Heat pumps use tank capacity. Instant gas uses flow rate. These measurements are not the same.

Choosing by Upfront Price Only

A cheaper product may not suit household demand, energy source or location.

Choosing by Running Cost Claims Alone

Running costs depend on tariff, usage, sizing, location and product suitability.

Ignoring Noise Placement

Heat pumps make operating noise, so placement near bedrooms or neighbours should be checked.

Choosing Too-Low Instant Gas Flow Rate

A low-flow instant gas unit may not suit families or two-bathroom homes.

Forgetting Valves and Fittings

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

Heat Pump vs Gas Hot Water Buyer Checklist

Before choosing between heat pump and 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 heat pump or gas storage

• Flow rate in L/min if instant gas

• Recovery rate if gas storage

• Gas supply suitability if gas

• Heat pump airflow if relevant

• Heat pump noise rating if relevant

• Condensate drainage if heat pump

• Electrical requirements if heat pump

• Product dimensions

• Connection positions

• Required valves and fittings

• Delivery access

• Warranty information

• Product specifications

• Rebate eligibility if relevant

Compare Heat Pump and Gas Hot Water Online

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

Start with:

• Heat Pump Hot Water Systems

• Gas Hot Water Systems

• Instant Gas Hot Water Systems

• Hot Water Systems

• Valves, Pipework and Fittings

If heat pump is not suitable and gas is not available, compare electric hot water systems for standard electric storage options.

FAQs About Heat Pump vs Gas Hot Water

Is heat pump hot water better than gas?

Heat pump hot water may be better where efficient electric storage is preferred and the property has suitable outdoor space, airflow and drainage. Gas may be better where natural gas or LPG is already available and the existing gas setup suits the home.

Is heat pump cheaper to run than gas hot water?

Running costs depend on energy tariffs, household use, system size, gas type, climate, installation quality and product specifications. Heat pumps are commonly compared for energy efficiency, but the home must suit the system.

Is gas hot water better than heat pump?

Gas hot water may be better if the home already has natural gas or LPG, the gas supply is suitable and the household wants gas storage or continuous flow hot water. Heat pump may be better for homes wanting efficient electric storage.

Should I replace gas hot water with a heat pump?

Replacing gas with a heat pump may be worth comparing if you want electric hot water and the property has suitable outdoor space, airflow, drainage and electrical capacity. Licensed tradespeople should assess the change.

Should I replace electric hot water with gas or heat pump?

If your home already has electric storage, a heat pump may be worth comparing where location suits. Gas may only be practical if natural gas or LPG is available and the gas supply can support the selected system.

What is the downside of heat pump hot water?

Heat pumps usually cost more upfront than many standard electric tanks and need suitable outdoor space, airflow, drainage and noise placement. They may not suit every unit, townhouse or tight outdoor area.

What is the downside of gas hot water?

Gas hot water requires the correct natural gas or LPG model, suitable gas supply and licensed gas fitting. Instant gas also needs the right flow rate for the household.

Is heat pump or instant gas better for two bathrooms?

Heat pump may suit two bathrooms if the tank capacity is correct and the location suits. Instant gas may suit two bathrooms if natural gas or LPG is available and the selected flow rate is high enough for peak demand.

Do heat pump and gas hot water systems need valves and fittings?

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

Can I install heat pump or gas hot water myself?

No. Heat pump and gas 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 Heat Pump or Gas Hot Water System

The right choice between heat pump and gas hot water depends on your household demand, energy source, available space, budget and replacement setup. Heat pump hot water may suit homes wanting efficient electric storage where outdoor space and airflow are suitable. Gas hot water may suit homes already using natural gas or LPG where gas storage or instant gas suits the household.

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