Hot Water Heater Guide

Buying Guide to Hot Water Systems

Hot Water System Buying Guide

Having to take a dishearteningly cold or tepid shower is just one of the factors that can have you thinking of a new water heater. Alternatively, your water heater might be past its life expectancy, or you want to reduce your energy bills. If you are looking to install a water heater, you’re in luck. Aside from the improved and more energy efficient technologies, there is a range of options when it comes to fuel type and capacity.

What is a hot water system?

Also known as a water heater, a hot water system is an appliance that provides a constant supply of hot water. A variety of hot water heaters is currently available. In general, classification depends on their energy source and whether they store hot water or not.

When choosing a water heater, the system’s energy source or method of heating is what you’ll need to consider first. To help you understand which heating method best suits your budget and needs, here’s a detailed look at electric, gas, solar, and heat pump hot water systems.

Electric hot water systems

Electric hot water systems come in both the storage tank and continuous flow options. This type heats water using one or two replaceable electric-resistance heating elements. Depending on the size of insulated tank featured, traditional electric water heaters can hold 20-80 gallons of hot water. When hot water is needed, cold water enters the tank and is heated to a predetermined temperature. As a result, the storage tank is always filled with hot water. Insulating the tanks reduces stand-by heat loss.

Compared to storage tank water heaters, continuous flow electric units are more efficient because they heat water for immediate use. Unlike the storage tank option, this method does not result in any standby heat loss.

While it’s relatively cheap to purchase and install, an electric storage tank hot water system is often the most expensive to run, particularly if it operates at a constant rate (full-day). Fortunately, some systems run on off-peak electricity. Although this type consumes less energy than its counterpart, it needs a larger tank to ensure the water heated overnight lasts all day. Unfortunately, off-peak electricity is not available to every home.

On average, a household of four will require a 125–160L tank for the continuous power system and a 250–315L tank for the off-peak electricity unit.


  • Electric water heaters can be installed both indoors and outdoors
  • A variety of high-efficiency options is available
  • Safer than both propane and natural gas water heaters
  • Easy to install
  • Relatively affordable initial cost
  • Provides a constant supply of hot water regardless of weather
  • Different capacities, from 20 to 80 gallons


  • Low-quality units and faulty installations increase the risk of electrocution since electricity and water do not mix well
  • Over time, the cost of energy consumed will amount to sizable proportions
  • Because they contribute to air pollution and the emission of greenhouse gases, electric water heaters are not eco-friendly

Price range

Without the cost of installation, electric water heaters cost $300-$1500.

Gas hot water systems

Today, the gas hot water system is the most commonly used water-heating unit in residential settings, mostly because it is reliable, safe, and inexpensive. Gas water heaters come in both the storage tank and continuous flow options and are powered by propane or natural gas. Because of venting requirements, gas water heaters are usually installed outdoors. However, the inclusion of a flue allows for indoor installation.

Aside from holding 30-100 gallons of water, most units have a pilot light that consumes a small amount of gas. Because it’s cheaper than electricity, natural gas makes an excellent option for those with the necessary connection. Gas water heaters recover much faster than electric water heaters. As such, your supply of hot water will be replenished more rapidly in case of heavy hot water usage. Although propane costs more than natural gas, it’s still significantly cheaper than electricity. In fact, gas water heaters cost about 1/3 the cost of electric water heaters and produce less

On average, a household of four will need a tank of 135–170L for a storage tank unit.


  • Considerably low initial cost
  • Continual supply of hot water inspite of unfavorable weather conditions or power outage issues
  • Easy to install
  • Cheaper to run than electric water heaters
  • Available in a variety of high-efficiency options
  • Thanks to the rapid recovery rate, you can meet all your hot water requirements with an on-demand gas water heater
  • Produce less greenhouse gases
  • Energy efficiency star rating


  • Release carbon dioxide gas
  • Possible risk of gas explosions and carbon monoxide suffocation
  • Bulky in size, necessitating more installation space
  • Requires a constant supply of propane in the absence of natural gas

Price range

Minus the cost of installation, gas hot water systems cost $900-$2000.

Solar hot water systems

Although the solar water heater has been around for a while, it’s only until recently that it started gaining popularity, mainly due to environmental concerns and the rising prices of gas and electricity. By relying on solar energy instead of gas or electricity, solar hot water systems provide a practical solution to the rising costs of heating water.

Typically, a solar water heater comprises of solar energy collectors in the form of PV or thermal cells and a storage tank. A roof-mounted cell absorbs the sun’s heat. Solar hot water heaters come in two different types of heating systems.

The passive system does not include any additional moving parts. It is basically a dark colored water tank that applies the convection principle to heat water. Quality units can deliver stellar savings during summer, making them ideal for warm, sunny regions. Most models include a supplemental heat source designed to kick in when needed. Although this feature allows solar water heaters to keep up with demands, they still won’t perform as well on cold and cloudy days.

The active system features circulating pumps and thermostat controls that keep water from flowing whenever the outside temperature is very low. Instead of heating water directly, tubes running inside the collector circulate an antifreeze solution. Heat absorbed from the sun warms the antifreeze. Once heated, the hot solution moves through a series of coils located inside the hot water storage tank. An indirect system is better suited for cold areas.


  • Eco-friendly because of zero greenhouse gas emissions
  • The lack of moving parts makes solar water heaters durable
  • Uses free solar energy, which helps you save on energy bills
  • Efficient enough to turn approximately 80 percent radiation into heat energy
  • Requires minimal maintenance


  • Requires a backup heat source
  • High upfront cost for the equipment and installation
  • Needs additional space
  • Can emit a lot of heat, meaning the location has to be planned accordingly

Price range

Solar water heating systems cost $6,300-$7,800 and have an average rebate of about $3,300. Besides, you might receive a 30 percent federal tax credit.

Hot Water Heaters

Heat pump or hybrid

The heat pump is a much more efficient version of the electric storage tank water heater. Same as air conditioners and fridges, heat pumps work by transferring heat from one location to another. It uses energy extracted from the air to heat water.

Although units usually feature an integrated tank and compressor, some models have the tank and compressor as separate features. While some can be installed indoors, most models need a well-ventilated installation area with unobstructed space for optimal performance. However, you shouldn’t install a heat pump too close to neighboring houses because the compressor is sometimes as noisy as an air conditioner’s outdoor unit.

Though heat pumps tend to provide optimal performance in warm and temperate regions, some models are designed to perform well in cold climates. Most have a booster element for cold or high demand days, and a capacity of 50-80 gallons.

Because they use air that’s already warm heat pumps are extremely energy efficient, about three times more than traditional storage tank water heaters. Energy Star rated heat pumps can save an average household as much as $300 every year in energy costs. Although the initial cost is higher that most of the other water heating systems, government rebates and several other incentives can help reduce the amount required.

On average, a household of four will need a 270–315L tank.


  • Heats water using energy from the air
  • Extremely energy efficient, meaning much lower utility bills
  • Relatively expensive upfront
  • Available as an integrated water tank or an add-on to the existing tank
  • Easy to maintain


  • Needs a lot of unobstructed installation space
  • Performs only in areas where the yearly temperature stays between 40 and 90 degrees
  • Can be noisy
  • Requires drainage since it produces condensate that needs to be drained or pumped outside

Price range

Minus the cost of installation, heat pumps are available at $2500-$4000.

Storage Tanks or Continuous Flow

Storage Tanks or Continuous Flow

In terms of hot water storage, there are two types of water heating systems. As the name suggests, storage tank water heaters feature an insulated tank for storing hot water until it’s needed. On the other hand, continuous flow water heating systems, also known as on-demand or instant water heaters, employ heating coils to heat water for immediate use. To help you understand the differences between these two as well as the advantages and disadvantages of each, here is an in-depth look at both.

Storage tank hot water heaters

With a capacity of 20-100 gallons, storage tank water heaters are the most commonly used type. They consist of an insulated tank used to store hot water for later use. When needed, the water emerges from a pipe located in the upper part of the water heater. Furthermore, these units feature two relief valves that open when the temperature or pressure exceeds a preset level. Storage tank water heaters are available in liquid propane (LP), natural gas, solar, heat pump, and electric models.

Storage tank hot water heaters are classified according to the amount of water held in gallons. Overall capacity is an important consideration when choosing a storage tank water heater. If you intend to use this type, make sure you find the right size for your needs. Recovery rate, which means the amount of water a unit heats in an hour, is another important consideration when choosing a storage tank water heater. The more the demand for hot water, the higher the recovery rate needed.

Although the tanks are insulated, some heat loss will occur over time. As such, it is good to install this type of water heater in an insulated space or sunny spot. Because mild steel tanks can corrode over time, they usually have 5 to 10-year warranties. However, proper maintenance helps to prevent corrosion.

Stainless steel tanks are usually more expensive, can last much longer and do not require as much maintenance as their mild-steel counterparts. Although most stainless steel tanks carry a 10-year warranty, they still need occasional maintenance such as valve and seal replacements.

You should check with your installer about the best type for you since the local water quality might have an effect.


  • Requires minimal maintenance
  • Least expensive initial cost
  • Immediate hot water


  • Might not provide a constant supply of hot water, of course depending on the model’s capacity, energy source, and hot water demand.
  • Not energy efficient because stored water needs continually reheating to maintain the set temperature.

Continuous flow hot water heaters

Also known as tankless, on-demand, or instantaneous water heaters, continuous flow water heating systems do not store hot water. They have no storage capacity. Instead, when you turn on the dishwasher or a hot water faucet, cold water flows into the unit where a series of coils heat it to a preset temperature. The hot water is then piped wherever needed.

Since this type of water heater only heats water for immediate use, it is usually more energy-efficient than the traditional storage tank water heater. Continuous flow water heaters are available in liquid propane (LP), natural gas, and electric models that come in various sizes. These units provide a limited hot water flow rate with most offering 3.5 gallons of hot water per minute.


  • Continuous supply hot water
  • Energy efficient
  • Requires the least possible installation space
  • Easily adjustable temperature
  • Available for both external and internal installations
  • Reliable and able to provide satisfactory amounts of hot water for any number of users
  • Eliminates the possibility of rust accumulation, which usually occurs in storage tanks


  • Produces greenhouse gas emissions during generation for electric units and during combustion for gas units
  • Limited water flow rates
  • Lower achievable flow rates in colder areas
  • Some electric units need heavy duty wiring, and others cannot use off-peak electricity
  • Gas units feature a pilot light that can be extinguished by the wind, which is why electronic ignition is recommended
  • Gas units have flue emissions

What to consider when choosing size

When it comes to water heating systems, capacity often impacts pricing. A family of four might do a load of laundry, take several showers, and run the dishwasher on an average day, consuming 100 or more gallons of hot water in total. However, this does not mean the family needs a 100-gallon storage tank. You should consider the first-hour rating (FHR) and gallons-per-minute rating (GPM) for storage tank water heaters and continuous flow water heaters respectively. The FHR ratings show how much hot water storage tank units can deliver over a given period. Although they do not store hot water, GPM ratings show how much hot water on-demand water heaters can produce in a specified period.

Depending on your hot water demand, professional plumbers can help you calculate the most appropriate capacity for you. A continuous flow water heater might not be the most suitable choice if you draw from multiple sources simultaneously. However, you can install two or more units if drawing from multiple sources at once is a regular occurrence.

The installation of a water heating system

Providing a reasonable estimate without seeing the installation site first is not easy. The cost will depend on the method of installation, which is often unique to every individual project. The mode of installation usually depends on the type of water heater currently installed, the type of unit to be installed, and what needs changing to bring the setup up to the current code.

Getting a qualified and licensed plumber to install your water heater is therefore important. Only professional plumbers can install the unit correctly and to the present local plumbing code. The cases of gas explosions, carbon monoxide suffocation, and electrocution are clear signs that both the installation process and improperly installed water heaters are dangerous. As such, every safety feature needs to be in place.

Adequate plumbing, enough clearance, and proper ventilation are other reasons why hiring a professional, licensed, and experienced plumber is of uttermost importance when installing a water heater.

Furthermore, you shouldn’t assume that the new water heating system will fit where the old one was. Newer models can be wider or taller than older models due to increased insulation and several other efficiency improvements.

Hot water heater maintenance

If you have a storage tank water heater, draining it is one of the most important parts of regular maintenance. By flushing out the minerals and debris that can have an impact on your water heater’s functionality, draining helps to ensure the unit’s longevity. If you do not perform proper maintenance, you may experience bursts of cold water when least expected, or your unit might cease to function altogether. Although professional recommendations vary, it’s best to have your unit drained once every year. However, you may have to drain it more frequently depending on how hard the water in your area is. Aside from checking your owner’s manual for the manufacturer’s guidelines, you should consider the services of a professional plumbing contractor.

If you have a continuous flow water heater, you need to ensure the heat exchange elements stay free of scale buildup. Even a light coating might severely impact your unit’s efficiency. If left unchecked, scale buildup causes longer burner cycles, which can strain your unit and lead to a shorter lifespan. Considering the importance of proper maintenance, having your unit professionally maintained is the best course of action.

The Best Brands in Australia

To help you pick the best product, here are some of the leading brands in Australia:

Rheem: With a reputation for high-quality products, this is arguably the most popular hot water brand in Australia. Thanks to their huge range of products, you can get a water heating unit for almost any situation from Rheem, including:

  • Continuous flow gas systems
  • Electric hot water heaters
  • Solar heating systems
  • Gas storage tank water heaters
  • Commercial systems

Rinnai: This brand is best known for its range of on-demand gas hot water heaters. Apart from requiring minimal installation space, units produced by Rinnai are considered energy efficient, convenient, and highly reliable.

Bosch: As one of the leading brands in on-demand gas water heaters, Bosch is well-known for high-quality, highly efficient products. Aside from offering a range of high performing on-demand gas hot water heaters, Bosch also offers one of the best heat pump systems currently available on the market.

Dux: As one of the longest-serving hot water system brands, Dux has a reputation for dependable, high-quality and energy efficient products. In fact, Dux has won several energy efficiency awards. Dux offers a range of hot water heaters including:

  • Electric hot water heaters
  • Heat pumps
  • Continuous flow gas systems
  • Solar heating systems
  • Gas storage tank water heaters

Vulcan: This brand is known for providing the most affordable units when quality and overall performance are considered. As a brand that targets the average homeowner, Vulcan hot water systems are among the most reliable yet reasonably priced units available. Vulcan specializes in electric and gas water heaters.

Energy Star Ratings Explained

Water heating systems have EnergyGuide labels detailing the unit’s expected energy efficiency and yearly operation costs. The energy star rating is a voluntary, trusted, and government-backed rating scheme. Hot water heaters are scored by an Energy Factor (EF) rating, which is the amount of energy a unit converts into hot water. Water heaters must have an Energy Factor of 0.82 or more to qualify for Energy Star ratings. The higher the EF (Energy Factor), the more efficient the model is.

The EnergyGuide label applies a star rating system, in which the stars represent the unit’s energy efficiency. The more the stars, the more efficienct the product is. A unit’s EnergyGuide label provides a quick assessment of the amount of energy that particular model consumes compared to other products in its category. On the other hand, the energy consumption figure is an estimate showing the average amount of energy that unit is expected to use within a year. Unlike the energy stars, the lower the figure, the lower your energy consumption might be.

When choosing a hot water heater, make sure you check its energy efficiency and annual operating costs, both cited on the EnergyGuide label.


Although choosing the most suitable type of water heater for your home could prove challenging, the information provided in this article should make it a lot easier. Now that you understand the differences between every type and the advantages offered by each, you can determine what is best. Along with the information provided here, a professional assessment is recommended.

This article was published by Michael Phillips from Pro Plumber Brisbane. If you found this information helpful please follow us on Google+.