Table Of Contents
- Gas vs electric water heater: the key differences
- Running costs: gas vs electric water heater
- Upfront costs: which is cheaper to install?
- Heating speed and performance
- Reliability during power outages
- Environmental impact
- Which is better for your home?
- Talk to a licensed plumber before you decide
- Frequently Asked Questions
If your hot water system is approaching the end of its life or you are building a new home, choosing between gas and electric is one of the biggest decisions you will make. As a trusted plumber Sydney homeowners rely on for hot water installations, Hero Plumbing helps hundreds of Sydney households make this decision every year. This guide gives you an honest, side-by-side comparison so you can choose what works best for your home.
Gas vs electric water heater: the key differences
At the most basic level, a gas hot water system burns natural gas or LPG to heat water, while an electric system uses an electric heating element. Both deliver hot water reliably, but they differ significantly in upfront cost, running cost, heat speed, and environmental impact.
Running costs: gas vs electric water heater
For most Australian households, gas is significantly cheaper to run than a standard electric storage system. Natural gas prices in NSW are currently lower per megajoule of energy delivered compared to electricity from the grid. A typical gas storage system will cost considerably less per year to operate than a comparable electric storage system.
The exception is a solar hot water system paired with a solar PV array. If you generate your own electricity, an electric hot water system can become very cheap or effectively free to run. However, without solar generation, gas wins on running costs in almost every scenario for Sydney households.
Upfront costs: which is cheaper to install?
Electric hot water systems generally have lower upfront purchase prices than comparable gas systems. However, if your home does not already have a gas connection, adding one will increase the installation cost significantly. For homes already connected to natural gas, a gas system installation is often the more economical long-term choice.
Heating speed and performance
Gas hot water systems heat water faster than standard electric storage systems. A continuous flow (instantaneous) gas system heats water on demand, meaning you never run out of hot water regardless of demand. Standard electric storage systems can run out of hot water during high-demand periods and take time to recover. Heat pump electric systems perform better on recovery time but at higher upfront cost.
Reliability during power outages
One practical advantage of gas is that most gas storage systems will continue operating during a power outage, as they do not rely on electricity for the main heating function. Electric systems stop entirely without power. For households in areas prone to outages, this can be a meaningful difference.
Environmental impact
Electric hot water systems, when powered by renewable energy or solar panels, have a lower carbon footprint than gas. However, grid-powered electric systems in NSW still draw on a mix of fossil fuels. Gas produces direct CO2 emissions but may still be lower-impact than coal-heavy grid electricity depending on the time of use. Heat pump systems are the most energy-efficient electric option and can have significantly lower emissions than standard gas storage when grid conditions are favourable.
Which is better for your home?
Use this as a starting guide:
- Already on natural gas, no solar: Gas hot water is typically cheaper to run and is the most common choice for Sydney households.
- Have solar panels: A solar hot water system or heat pump with solar diverter can be very cost-effective long-term.
- No gas connection and cost-conscious: A standard electric storage system has the lowest upfront cost, though running costs will be higher.
- Environmentally focused: A heat pump hot water system offers the best combination of performance and low emissions.
Read our guide on why you have no hot water and whether to repair or replace your water heater for more context before making a decision.
Talk to a licensed plumber before you decide
Every household is different. Your gas connection status, household size, hot water usage patterns, and roof space for solar will all influence the right choice. Hero Plumbing’s licensed plumbers and gas fitters can assess your home and give you an honest, manufacturer-independent recommendation. We install all major brands and system types across Sydney.
Frequently Asked Questions
Is gas or electric hot water cheaper to run?
In most Australian homes, gas is cheaper to run than a standard electric storage system. The exception is when solar panels are used to power an electric or heat pump system, which can make electricity very cost-effective.
What is the cheapest hot water system to run in Australia?
Solar hot water (evacuated tube or flat panel) and heat pump systems generally have the lowest running costs. Among conventional systems, gas storage is typically cheaper to run than electric storage.
Can a gas hot water system work without electricity?
Most gas storage systems can continue operating without electricity, as the main heating function uses gas. Electronic ignition systems may require power, but many older gas storage systems use a standing pilot.
How long does a gas hot water system last?
A well-maintained gas hot water system typically lasts 10 to 15 years. Regular servicing extends the lifespan and ensures safe operation.
Is it worth switching from electric to gas hot water?
For many Sydney households already connected to natural gas, switching from electric to gas can reduce annual running costs. The payback period depends on your current system’s age, your gas tariff, and installation costs.
