Gas hot water vs hot water heat pumps: How do they compare?

Gas water heaters are widespread in Australia, making up approximately 48% of all water heaters installed in Aussie homes. 

While hot water heat pump systems generally cost more to buy than an ordinary gas system, they are cheaper to run and low in greenhouse gas emissions. 

So, should you make the switch? We compare the two options to help you decide.

Gas hot water vs hot water heat pump running costs

An average 5-star energy-rated storage hot water system using natural gas will cost around $395 per year to run for an average three-person household, according to Sustainability Victoria.

In contrast, a high-efficiency hot water heat pump can do the same job for the same house for approximately $120 a year when using off-peak electricity. 

So, while the initial cost of a heat pump is typically higher than that of a gas hot water system, its lower running costs can save the average three-person household $275 per year - that’s an average saving of $4,125 over a 15-year lifespan.

Compare the average running costs for different hot water systems here.

Gas hot water vs hot water heat pumps greenhouse gas emissions

Opting for a hot water heat pump can reduce more than just your electricity bills.

Gas hot water systems use either natural gas or Liquefied Petroleum Gas (LPG) to heat water, while hot water heat pumps are powered by electricity.

Comparing the same systems as above, a storage gas hot water system emits an average of 8.5 tonnes of greenhouse gasses over 10 years, while a high-efficiency hot water heat pump system emits around 4.1 tonnes.

In addition to the emissions released when the system is running, gas water heaters depend on a non-renewable resource that has already caused significant environmental damage before it ever reaches a house. In contrast, heat pumps are powered by electricity, whether it’s from your own solar panels or the grid (which is becoming increasingly renewable).

Pairing solar panels with a hot water heat pump

Combining rooftop solar panels with a hot water heat pump can help you further reduce your emissions and save even more on your energy bills. By timing your heat pump around your solar generation, it can act as a type of battery:

• Time your heat pump to power up around midday, when the sun is highest

• Your heat pump will store free solar energy in the form of hot water

• Your family can use hot solar-powered water any time they want, even when the sun isn’t shining

• This combination of time-shift and self-consumed energy will cut your electricity bills even more than just a solar system or a heat pump would on its own

While a hot water heat pump system can cost more to install, the energy-saving and environmental benefits can make it a great option.

The information contained in this article is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs and, where appropriate, seek professional advice.