Hot water is a daily necessity, but have you ever stopped to think about how much it adds to your energy bill? With rising costs across Australia, understanding how your hot water system affects your expenses—and what you can do to save—can make a real difference. The good news? Small changes and smarter choices can lead to significant savings while also benefiting the environment.
Here’s what influences hot water costs the most:
- Your system type: Gas, electric, solar, and heat pumps all come with different price tags.
- Energy efficiency: Older systems or those with low star ratings use more power.
- Your household size: More people mean more hot water (and higher costs).
- When you use hot water: Heating water during peak hours costs more if you’re on a time-of-use tariff.
How Hot Water Affects Your Energy Bills
For most Australian households, heating water accounts for about 25% of total energy consumption. That’s a significant chunk of your electricity or gas bill. According to the Australian Bureau of Statistics, the average household spends $800–$1,500 per year on water heating alone. The type of hot water system you have, its efficiency and your household’s daily habits all play a role in determining how much you spend on hot water each month.
Gas vs. Electric vs. Solar: Which Is More Cost-Effective?
Choosing the best hot water system for energy savings depends on multiple factors, including your location, household size and budget. Each system comes with its own advantages and trade-offs:
- Electric Storage – Widely used but can be costly unless paired with off-peak tariffs.
- Gas Storage & Instantaneous Gas – Generally more cost-effective than standard electric systems, with instantaneous models offering better efficiency.
- Solar Hot Water – Higher upfront cost but significantly lower running costs, making it ideal for long-term savings.
- Heat Pump – Energy-efficient and cost-effective in many climates but may require specific installation conditions. If you’d like to see if you’re eligible for a Victorian Government rebate as part of a heat pump installation, give us a call today or contact us via our website contact form.
Since energy tariffs, climate, and household needs all affect running costs, getting expert advice is key to choosing the most cost-effective option for your home.
Common Hot Water Mistakes (and How to Fix Them)
Even if you have a good system, everyday habits can drive up costs. Here’s how to fix them:
- Currently having long, hot showers? Install water-efficient showerheads and try to aim for 4–5 minutes per shower as a maximum.
- Water heater set too high? Aim to keep it at 60°C and under (or 50°C for instant systems), to avoid unnecessary heating.
- Using hot water at peak times? If your plan has peak and off-peak rates, adjust your routine to save.
- Skipping maintenance? A neglected system works harder—and costs more. Regular checks for leaks and sediment buildup can help.
Future-Proofing Your Home with Smarter Choices
Energy prices are unpredictable, but one thing’s for sure—cutting waste and choosing an efficient system will always pay off. More homeowners are switching to hybrid options, like combining solar with a heat pump, for maximum savings.
Another way to make upgrading easier? Government rebates. Many incentives exist for switching to energy-efficient hot water systems, helping to lower upfront costs while giving you long-term savings. A quick chat with a professional can help you figure out what rebates you’re eligible for and how to make the most of them.
Investing in a Smarter, More Efficient Future
Your hot water system isn’t just another household appliance—it’s a long-term investment in your home, your wallet and the environment. Finding the right setup depends on your energy source, home design and budget, but one thing is clear: small adjustments can lead to big savings.
Ready to Save on Your Hot Water Bills?
Find the best energy-efficient hot water system for your home, compare running costs and start cutting down your expenses today. Get a free consultation and learn ways to save with Elite Trades.
