In Australia, hot water systems play a crucial role in providing households with a steady supply of heated water for daily activities like bathing, cooking, and cleaning. These systems typically operate by heating water and storing it for use on demand, ensuring comfort and convenience for residents. In recent years, there’s been a growing shift towards renewable energy options for hot water systems, driven by environmental awareness and the desire to reduce energy bills.
Solar hot water systems, which utilise the sun’s energy to heat water, have become increasingly popular due to Australia’s abundant sunshine. Heat pump systems, which extract heat from the air to warm the water, are another eco-friendly choice that is gaining traction. Both options significantly reduce greenhouse gas emissions and energy consumption, making them attractive alternatives to traditional electric or gas water heaters.

Solar Hot Water
Heat your water with the power of the sun. Read more about solar hot water systems.
Heat Pumps
Heat pumps heat the water using the surrounding air. Read more about heat pumps
Hot Water System Rebates and Incentives
Read more about available rebates and incentives for solar hot water and heat pump hot water systems across Australia
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What type of hot water systems are available in Australia?
Australia offers a variety of hot water systems to cater to different needs and preferences. The main types available include:
Electric storage systems
These heat water using an electric element and store it in an insulated tank for use when needed. They’re relatively easy to install but can be costly to run due to electricity prices.
Gas storage systems
Similar to electric storage systems, but these use natural gas or LPG to heat the water. They’re generally more energy-efficient and have lower running costs compared to electric systems.
Continuous flow (Instantaneous) systems
These systems heat water on demand as it passes through a heat exchanger, eliminating the need for a storage tank. Available in both electric and gas versions, they provide endless hot water.
Heat pump systems
These use electricity to transfer heat from the air or ground to heat the water. They are highly energy-efficient and environmentally friendly, especially when paired with solar panels.
Solar hot water systems
Utilising solar collectors, these systems harness the sun’s energy to heat water. They often have a gas or electric booster to ensure a consistent supply even on cloudy days. Solar hot water systems are highly sustainable and can significantly reduce energy bills.
Each system has its own set of benefits and costs, so it’s essential to consider your household’s needs, energy efficiency, and environmental impact when choosing a hot water system.
Should I upgrade my existing gas or electric hot water system?
Your hot water system is usually the largest contributor to your energy bills; typically accounting for 15 – 30% of your energy bills. Upgrading your system to an energy-efficient alternative will not only significantly reduce your bills but also decrease your carbon footprint.
Energy Matters recommends upgrading your system to a solar hot water or heat pump system. To assist you with the upgrade, the federal government offers incentives in the form of small-scale technology certificates (STCs) to reduce the upfront cost. Some states also offer further rebates and incentives to upgrade your hot water system.
Can I disconnect my home from gas if I upgrade my hot water system?
Achieving energy independence often requires disconnecting your home from the gas mains. If you upgrade your gas hot water system to an electric boosted heat pump, and your home does not otherwise need gas, then you can disconnect from the gas main.
Upgrading your hot water system to solar hot water might still require access to gas. Your solar hot water system will either have an electric or gas booster. If it is the latter, then you will not be able to disconnect from gas.
Find out more about the process and cost of disconnecting from the gas mains.