Gas VS Electric Hot Water In A Cost Of Living Crisis

Have you noticed that the cost of living continues to soar all across Australia – and there’s apparently no end to it? At home, at your place, that means re-evaluating everything, from grocery costs to utility providers – and hot water systems. Did you know that just heating hot water at your place accounts for up to 25% (or more) of your power bill? So if wondering what to do at home, the smartest place to start is perhaps by comparing the long-term value of gas vs electric hot water systems.

25% That’s a huge chunk of your power bill – and all of it is hot water! With these high interest rates, ongoing electricity price rises, and the never-ending increases in groceries and rent costs, your hot water bill starts to matter a lot, lot more. The perfect system – for YOU – can save you hundreds but also thousands over time.

But which is actually more cost-effective? Are you considering switching from a gas to electric hot water system in Melbourne? Do you have an old hot water system in Geelong and not sure what to replace it with? Looking for the most cost effective Canberra hot water system? Let’s break it down:

1. Cost comparison

Is gas hot water cheaper than electric?

It’s the question so many homeowners like you are asking right now – is gas hot water cheaper than electric?

The short answer is:

It depends.

Upfront, electric systems are typically cheaper to purchase and install.
But gas systems may offer lower running costs over time, depending on your energy tariffs, hot water usage habits, and how energy-efficient your current system is.

When comparing gas vs electric hot water running costs, you’ll also need to factor in location. Typically, mains natural gas is readily available and cheaper than electricity on a per-unit basis. But in other parts of Australia, where gas needs to be bottled or is not available at all, electric might be the only viable option.

2. Understanding running costs

The real savings come from understanding long-term usage. So, is gas or electric hot water cheaper over time? Let’s explore:

Electric storage systems can be more expensive to run, especially if you’re using hot water throughout the day and not on an off-peak tariff. However, some homes have access to time-of-use electricity plans or solar panels, which help reduce those running costs significantly.
Gas hot water systems, particularly continuous flow (also known as instantaneous), only heat water as you need it – making them efficient for larger families or high-usage homes. They also perform well in cold climates, as they recover quickly and don’t rely on stored heat.

When weighing up gas or electric hot water, consider how your household actually uses hot water on a daily basis. Ask yourself:

Do you take long showers?
Do you run multiple loads of laundry?
Do you have a large family using the bathroom all at once?

Are you saying “yes” to yourself? Gas could be the better performer.

3. Efficiency & performance

It’s not just about the cost – performance matters too. No one wants to deal with a system that runs out of hot water during peak times or takes forever to reheat.

Electric storage units can be limited by tank size. Once the hot water’s used up, you’ll need to wait for it to reheat. That’s not ideal during cold winter mornings or when guests come to stay.
Gas systems, especially continuous flow models, heat water on demand. That means consistent hot water for everyone in the house, no matter how long the showers are.

When comparing a gas vs electric water heater, think deeply about reliability. Systems that run out of hot water quickly can be frustrating and costly in the long run if you’re forced to replace them prematurely or run backup systems.

4. Upfront costs & installation

If you’re in affordability or hot water crisis mode, upfront affordability can tip the balance. Let us explain:

Electric water heaters are typically cheaper to buy and install, making them appealing to households on a budget.
Gas water heaters, especially continuous flow models, tend to cost more upfront but may last longer and save you money over time.

It’s important to also consider the existing setup of your home. If you already have a gas connection and gas appliances, it may make a lot of sense to stick with gas. But if your property is electric-only, switching to gas may require expensive infrastructure changes.

That’s why it’s smart to speak with an experienced, licensed hot water plumber who can assess your current system – whether you’re in Victoria, ACT or regional areas – and recommend the most cost-effective solution. For example, our Canberra hot water system experts consider both usage and energy efficiency, while our trusted hot water technicians in Geelong offer tailored solutions for older homes and growing families.

5. Lifespan & maintenance

When thinking about hot water options, especially gas hot water vs electric hot water, lifespan and service costs are another super-important factor.

On average:

Electric hot water systems last between 10-15 years, depending on brand and maintenance.
Gas systems, especially continuous flow units, can last up to 20 years with regular servicing.

However, both systems require maintenance. Hot water leaks can occur in gas or electric hot water systems, increasing your water bill and leading to more serious failures if left unchecked. Electric systems may need occasional element or thermostat or hot water anode rod replacements. Gas systems, on the other hand, involve components like burners, valves and flues that demand a level of specialisation. That’s why it’s crucial to have gas servicing carried out by qualified professionals, licenced gasfitters in Geelong, Melbourne or wherever you’re located, who understand the local gas requirements.

Still weighing up electric water heater vs gas? It’s a difficult decision, but remember to factor in not just replacement costs, but how often each system might need professional attention.

6. Environmental considerations

Another aspect worth considering is your environmental footprint. Electricity in Australia, as we all know, is increasingly being sourced from renewables. So depending on your provider and plan, your electric vs gas hot water choice might affect your carbon output.

If you already have solar power, electric hot water becomes even more appealing, especially with a timer or smart controller to sync heating to sunlight hours.
That said, gas water heater vs electric efficiency can still be competitive if your home is connected to clean-burning natural gas.

But for those focused on reducing fossil fuel reliance, electric is often the greener long-term option – because it can be combined so easily with solar.

So… Which one should you choose?

The answer to gas hot water vs electric isn’t black and white. It depends on:

Your home
Your lifestyle
Your energy sources
And your budget.

BUT – here’s a simplified breakdown to help you decide:

Choose gas if:

You already have a mains gas connection
You use a lot of hot water (e.g., large family)
You want continuous hot water with minimal delays
You’re planning to stay in the home long enough to benefit from lower running costs.

But choose electric if:

You’re looking for a lower upfront cost
You live in an all-electric home or one with solar
Your hot water usage is moderate or scheduled for off-peak times
You prefer a lower-maintenance system without gas servicing needs.

Is it time to rethink your hot water?

The debate over electric vs gas hot water has never been more relevant. In the middle of a cost of living crisis, like the one we’re all living through across Australia right now, you know that every dollar counts. That means the right hot water system can make a hugely significant difference to your long-term household budget. Trust us – there’s a lot of money you can keep in your bank account!

Here at Fix-It Right Plumbing, we specialise in helping homeowners just like you choose the best system for their needs. We’re experts in both electric and gas vs electric water heater installations, as well as repairs, upgrades, servicing, maintenance, and a lot more. We take the time to:

Assess your current setup
Look at your usage habits
And help you budget for the perfect solution that works not only NOW but in the future.

Need extra help choosing between electric vs gas hot water? Reach out to Fix-It Right Plumbing in Melbourne, Geelong or Canberra and we’ll ensure your hot water system is working as hard as you are – and drive down those depressingly rising power bills.