Hot water systems tend to fail at the worst possible time, and that's often when people ask how much a replacement will cost. The honest answer is that it depends on the type of system, the size you need, your home and the installation work involved. A like-for-like swap is very different from switching to a new type of system.
This guide explains what drives the cost of a hot water replacement, how the main system types compare, and how to get quotes that are easy to compare. It applies Australia-wide, but rules and rebates differ between states and territories.
What affects the price
The type of system
The main types are electric storage, gas (storage or continuous flow), solar and heat pump. Each has different purchase, installation and running costs. Energy.gov.au's guide to hot water systems says electric storage systems are the cheapest to buy and install but generally more expensive to run unless powered by solar PV, while heat pumps and solar systems cost more up front but are cheaper to run.
Size and household needs
A system that's too small runs out of hot water, while one that's too big wastes energy keeping water hot. The government's YourHome guide suggests thinking about household size and how you use hot water, such as whether everyone showers at the same time, when choosing tank size.
Like-for-like or a change of type
Replacing a system with the same type in the same spot is usually the simplest job. Switching types can add work. For example, going from gas to a heat pump may need a new electrical circuit, while moving a system may mean new pipework or a new base.
Access and location
A system in a tight cupboard, on a roof, or upstairs takes more time to remove and install than one on an outside wall with clear access. Removing and disposing of the old unit may be included or charged separately.
Electrical and gas work
Depending on the system, you may need a plumber, a gas fitter, an electrician or a combination. Some businesses hold more than one licence; others bring in another trade. Ask who will do each part of the job.
Rebates and incentives
Rebates and certificates may reduce the cost of efficient systems, depending on where you live and your eligibility. Energy.gov.au keeps a searchable list of rebates and assistance across states and territories. Check what applies to you before you choose a system, and confirm whether a quote already includes any discount.
Comparing the main system types
- Electric storage: usually the lowest upfront cost, higher running costs unless paired with solar or off-peak tariffs.
- Gas continuous flow: heats water on demand, but needs a gas connection and outdoor venting in most cases.
- Gas storage: keeps a tank hot using gas. Energy.gov.au notes these can be inefficient, especially in cold climates.
- Solar: uses roof-mounted collectors with a tank, and may need a booster in areas with less winter sun.
- Heat pump: works like a reverse air conditioner. Energy.gov.au says some models aren't designed for very cold locations, and the compressor can be noisy, so think about placement.
How to get quotes you can compare
Give each installer the same details:
- the brand, model and size of your current system (check the label)
- photos of the system and where it's installed
- how many people live in the home and your typical hot water use
- whether you want like-for-like or are open to a different type
- whether you have rooftop solar and what tariff you're on
- how urgent the job is
Ask each quote to show the system make and model, installation labour, any electrical or gas work, valves and fittings, removal of the old unit, rebates applied and GST.
Check licences and paperwork
Hot water installation generally involves licensed plumbing work, and gas or electrical work requires the right licences too. Requirements vary by state, so check with your state regulator. For example, in Queensland the QBCC says plumbing and gas fitting work of any value needs a QBCC licence. In South Australia, the SA Government says plumbers must give you a certificate of compliance when installing or replacing a water heater.
Ask your installer what compliance paperwork you'll receive, and keep it with the product warranty.
Warranties
Hot water systems come with manufacturer warranties, which can differ for the tank and other components. The installer may also offer a warranty on their workmanship. Ask about both, and register the product if the manufacturer asks you to.
Ways to manage the cost
- Plan ahead. A planned replacement gives you time to compare systems, rebates and quotes.
- Check eligibility for rebates before you sign, not after.
- Think about running costs, not just the purchase price. A cheaper system can cost more over its life.
- Ask about tariffs. Your retailer or installer can explain how tariffs affect running costs.
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Frequently asked questions
How long does a hot water replacement take?
A straightforward like-for-like swap is often done in one visit. Changing system type or location can take longer. Ask your installer for an estimate.
Do I need a plumber or an electrician?
It depends on the system. Most installs involve a plumber, and you may also need a gas fitter or electrician. Ask who will handle each part of the work.
Are there rebates for heat pump or solar hot water?
There may be, depending on your state and eligibility. Energy.gov.au has a searchable list of rebates and assistance.
Should I replace my system before it fails?
If it's old or showing signs of trouble, researching options early gives you time to compare quotes and rebates instead of rushing a decision.
This guide is general information only, not legal or financial advice. Rules change, so check the official sources linked above for your state.