Heat pump vs gas vs electric hot water
Hot water is one of the biggest energy users in a home. How a heat pump, instantaneous gas and a traditional electric storage system compare for a new build in SA or Victoria.
Hot water quietly uses more energy than almost anything else in a home, so the system you choose has a real say in how efficient and comfortable your new build is. The three options you will weigh up across SA and Victoria are a heat pump, instantaneous gas, and a traditional electric storage tank. The ground has shifted here: heat pumps have become the standout for a new home, especially an all-electric one with solar, while gas and old-style electric each have their place and their drawbacks. Here is how they really compare.
Why heat pumps have taken over
A heat pump hot water system works like a reverse-cycle air conditioner, pulling warmth from the outside air to heat the water rather than using electricity to heat it directly. That makes it dramatically more efficient than a traditional electric storage tank, using a fraction of the energy for the same hot water. Set it to run during the day and it sips from your solar, which is the cheapest power you have, and it lifts your Whole-of-Home energy score at the same time. For a new all-electric home, it is usually the obvious pick.
Where gas still appeals, and where it does not
Instantaneous gas gives you endless hot water with no tank, fast recovery and a compact unit, which is why it had such a loyal following. The downsides for a new build are real though: it needs a gas connection with its own supply charge, it sits entirely outside your solar, and it works against your Whole-of-Home score. In Victoria it is also increasingly restricted for new homes under the planning rules, so check what applies to your project before planning around it.
The case against old-style electric
A traditional electric storage tank is cheap and simple to install, which is its main appeal, but it is the least efficient of the three and the weakest for your energy score unless it is paired with enough solar to cover it. On a new build, the small upfront saving over a heat pump is usually outweighed by how much more energy it uses over the life of the home. Most people building new skip straight past it to a heat pump.
Placement and timing matter
Whichever electric option you choose, give the unit a sensible, ventilated location, because a heat pump in particular makes a soft hum and wants airflow. Then set it to heat during the solar day so it uses your own generation rather than grid power in the evening. Good placement and a smart timer turn an efficient system into a genuinely cheap one to run.
Heat pump
- Very efficient, uses a fraction of the energy of electric storage
- Runs on your solar, so it is cheap to run in daytime
- Lifts your Whole-of-Home energy score
- No gas connection needed, suits all-electric homes
- Needs a sensible, ventilated outdoor spot
- The unit itself can make a low hum
- Works best when set to heat during the solar day
Instantaneous gas
- Endless hot water with no tank to run out
- Fast recovery and compact
- Familiar and proven
- Needs a gas connection with its own supply charge
- Sits outside your solar generation
- Works against your Whole-of-Home score
- Increasingly restricted for new homes in Victoria
Electric storage
- Simple, proven and inexpensive to install
- No gas connection required
- Easy to replace like for like
- Uses a lot of energy compared with a heat pump
- Can run out if the tank is undersized
- Weakest option for your energy score unless on solar
For a new home, a heat pump is the standout: it is far more efficient than electric storage, runs on your solar, and lifts your energy score, with no gas connection to worry about. Gas still suits some who want endless hot water, but it works against your score and is being restricted in Victoria. Old-style electric storage is hard to justify on a new build unless it is well covered by solar.
Still weighing it up?
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Match me with 3 buildersCommon questions
Is a heat pump hot water system worth it in a new home?
For most new builds, yes. A heat pump uses a fraction of the energy of an electric storage tank, runs on your solar during the day, and lifts your Whole-of-Home energy score. In an all-electric home it is usually the obvious choice.
Heat pump vs gas hot water, which is better?
For a new build, a heat pump generally wins because it runs on solar and helps your energy score, with no gas supply charge. Gas gives endless hot water and fast recovery but sits outside your solar, works against your score, and is increasingly restricted for new homes in Victoria.
Are heat pump hot water systems noisy?
They make a soft hum, similar to an air conditioner unit, so they want a sensible, ventilated spot away from bedroom windows. With good placement it is not an issue, and the efficiency gain is well worth planning the location for.
Should I avoid electric storage hot water?
On a new build it is usually worth skipping in favour of a heat pump. Electric storage is cheap to install but the least efficient option and the weakest for your energy score, unless it is paired with enough solar to cover its use.