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Your guide to installing a hot water system

Do you need a hot water system in your house? A hot water system installation will cost you around $350 to $800 if you replace your system with the same model as your previous one. However, if you choose to move from an electric system to a gas hot water system, the cost may shoot to about $1300 to $1400.

The hourly rate for installing a hot water system is around $120 per hour. However, if the task is simple, it can reduce to around $110 per hour. The total cost of the labour will be determined by the type of installation you want for your house and your geographical location.

If you need extra fittings for your hot water system, then the plumber can give you a higher quote for the extra work. Therefore, the total installation cost varies depending on your needs. However, you need to ensure that you only ever engage licensed plumbers to maintain all the necessary regulations. Without further ado, let’s dive into how to do any and all calculations involved in the process of installing a hot water system.

Factors affecting hot water system installation costs

Are you wondering what factors affect the cost of installing a hot water system and how much you will pay for installation? You need not wonder anymore as below you will find the factors that affect the total cost of installing hot water systems in Australia.

The size of water heater your house needs

The first thing to consider is the size of the water heater you need for your household. It is advisable to go for a water heater that will cover all the needs of your household. Nobody wants to be in the bathroom enjoying a hot shower just for the water to get cold when the hot water ends.

The higher the tank capacity of your water heater, the more the purchasing and installation cost. Whether you choose a solar water heater, an electric system, or a gas hot water system, this specification still stands.

Therefore, it is essential to consult a licensed plumber to get advice on the amount of water your home needs. Tanks vary from 25 litres to 400 litres. Getting the right size will save you money on the installation and operation costs of the water heater.

Model, make, and type of your water heater

Technology is ever-evolving which only means that there are now several types of water heater systems in the market, including:

Gas water heaters

These types of heaters use natural gas to heat water. They are available in on-demand models and tank models. Tank-based models are cheaper to purchase and install but not as efficient as on-demand models.

Electric water heaters

Electric water systems are powered by electricity. They are available in instant models, tankless and tank-based models. Basically, if you opt for an electric heater, it will cost the same as a gas water heater to purchase. However, the operational costs are higher since natural gas is cheaper which would save a person who goes for a gas water heater more money than you.

Heat pump water heaters

Despite these water heaters being expensive, they are very efficient which makes them a good investment. It’s safe to say that they function like reverse refrigerators since they draw heat from the air to heat water.

Solar water heaters

These types of heaters absorb heat from the sun to heat your water. Although they require no power to operate, they are expensive to purchase and install.

All the above-mentioned water systems cost differently to purchase and to install.

NOTE: It would be best if you do thorough research to determine the model, make, and type of heating system that is most suitable for you and your household.

Replacing the current water heater in your home

If you decide to replace the current water heater with a similar unit, your installation costs will be lower. Your plumbers will simply swap your old unit and fix the new one to your existing hot water system.

However, if you make a significant change like replacing a solar water heater with a gas water heater, you will pay more. Your total installation cost will consist of the cost of hiring reliable plumbers and that of reconfiguring the plumbing system. If you decide to switch your entire water heater, be ready to pay a higher overall cost.


Some water tanks can weigh up to 150 Kgs which means that they require specialised equipment and a greater number of people to deliver it to your doorstep as opposed to a smaller tank. When replacing your water heater, ensure you factor in this cost.

Additionally, if the plumbers encounter complications such as steep and narrow stairs during installation, they might charge you more for that hassle.


You need a licensed plumber to install your water heater. The installation cost is determined by the type of heater installed, whether your system needs an electrical and plumbing upgrade, and several other factors.

For instance, Australian law requires you to have tempering valves in all water heaters with storage tanks. These valves keep your water below 60° C to prevent scalding accidents from occurring. To install one, it will cost you around $200.

A simple installation can take around two-three hours, while a complex one taking up to four hours. Since plumbers charge on an hourly basis, a complex installation can increase the overall installation costs.


Some plumbers may haul the old water heater for free, while others will charge you to take it away. It may not be a hefty fee, but it is something you should keep in mind and inquire about beforehand.

Hot water system installation cost

It is important to note that the purchasing cost of a hot water system does not paint the complete picture. While the initial price of a heat pump water heater and solar water system may put you off, they are cheaper to run than an electric unit. Therefore, it is essential to look at each water system and discover how they fit into your overall budget.

Check the guide below to find out the average expected installation costs for all types of hot water systems.

Electric hot water system (with storage tank)

  • Average Installation Cost: $350 – $800
  • Average Hot Water Cost: $530 – $2000

Instant electric hot water system

  • Average Installation Cost: $350 – $1600
  • Average Hot Water Cost: $800 – $1400

Gas hot water system (with storage tank)

  • Average Installation Cost: $400 – $900
  • Average Hot Water Cost: $900 – $1530

Instant gas hot water system

  • Average Installation Cost: $400 – $1600
  • Average Hot Water Cost: $790 – $1650

Solar water system (electric support)

  • Average Installation Cost: $2000 – $3500
  • Average Hot Water Cost: $3600 – $5000+

Solar water system (gas support)

  • Average Installation Cost: $2000 – $3800
  • Average Hot Water Cost: $5000 – $6550+

Heat pump system

  • Average Installation Cost: $1000 – $2600
  • Average Hot Water Cost: $3300 – $4100

The above installation costs vary depending on how complex the installation process turns out to be, which means these costs are simply approximate suggestions to give you an idea of what to expect as they may change. Another cost that may increase the installation cost is the water heater tempering valve which costs around $300.

Hot water system replacement cost

If you are only having the same hot water system replaced, then the cost is minimal. It simply means that if you install a new system where the old system was, you will cough up around $300 or more. However, the cost of replacing a gas hot water system can be about $1000 to $2500 if you are changing its location.

Similarly, if you replace your electric unit with a gas unit, you will pay around $1200 to $3100. However, the overall installation cost will depend on the complexity of the installation process and the distance to be covered, which is determined by your geographical location.

Gas water heater installation and replacement costs

In most cases, the cost is around $1100 to $3300 to replace a hot water system which covers the material cost and labour. However, when replacing a gas unit, you will incur an extra $200 to $250 on average.

For a tankless water heater, the installation costs are around $300 to $750 to replace an old one with the same type while having it fixed at the same spot. The installation cost will be about $1250 to $3100 if you switch to electric from gas.

According to Australian Law, you must install a tempering valve to prevent the occurrence of accidents. If your system does not already have this valve, you need to factor it in at around $300 extra for it. You will save around $300 for the tempering valve since you will not need it if you opt for a gas tankless water heater.

Costs of installing and replacing an electric hot water system

The cost of installing a hot water system depends on the type of installation you want. Surprisingly, you can install a hot water system for about $300 only. However, if you wish to acquire an electric system, the cost may increase to around $750. Additionally, you will have to pay about $1100 to $2200 for installation, labour, and unit costs.

Installation and replacement costs for a heat pump hot water system

Heat pumps draw air from the atmosphere as the source of energy to generate hot water. If you consider yourself an eco-conscious consumer, you should opt for this system due to its energy efficiency. The average cost of a heat pump water system is around $2550 to $5000 and varies in size from 170 litres to 315 litres.

Solar water heater installation and replacement costs

When it comes to solar water systems, you are spoilt for choice. The options include an electric boosted system, a gas boosted system, and a roof-mounted system. Roof-mounted systems are electric boosted and popular in homes that can support the tank weight and get a lot of sunlight. They cost around $4000 to $9900.

Split systems can have a tank installed on the ground and are a good choice if the roof system is too heavy for your house. Gas boosted systems will cost you around $5000 to $9000 whereas electric systems cost around $4000 to $7800.

Average cost of using a plumber for installation

Usually, a plumber charges an average of about $120 per hour to install a water heater unit. However, the overall cost might change depending on various factors. For instance, if you live far from your plumber of choice, the charges may increase due to fuel charges. You should therefore get the hot water services of a trustworthy plumber near you. It will save you on those extra fuel costs.

Government rebates for hot water installation

The Australian government highly encourages the installation of hot water systems by providing rebates. This is because hot water systems are suitable for the environment, especially solar energy systems. Consequently, the Australian government reduces the initial purchasing cost by $550 to $1200, depending on the type of your selected system. Therefore, it is essential to check your eligibility and factor it into your plan.

The overall water heater installation costs

As you may have noticed, many factors affect the overall installation costs of your hot water system. The best way to plan for the cost of your project is by engaging different professional plumbers to get quotes for comparison. Moreover, you should factor in other arising costs that may occur during the hot water installation process because of the complexity of the work.

Additionally, you should ensure that you hire plumbers that will make use of technological advancements to make their work robust and efficient. If they use technology and special tools, they can avoid small mistakes that can cause significant damage to your preferred hot water system. Hiring professionals who utilise technology is vital in solving your problems without taking much of your time.


Our customers

Christopher Chow

I called Hero Plumbing to unblock a shower drain and was unable to get a quote over the phone, but Sam the owner was here same day. After his first try, he made quick work of the blockage. I opted to also get the acid cleaner stuff poured down. Sam had run out, but made a trip to go pick some up to finish the job. If you opt for this treatment make sure you can easily air the bathroom as it’s extremely strong and produces a lot of fumes. Great Service and Honest Pricing.

Sarah Lincon

Hero Plumbing has been excellent since there first phone call.
I spoke to a gentlemen names Sam which he organised a technician to come and replace our hot water heater.
The technician was excellent called me 30mins before arrival explained the whole job to me and gave me an upfront price.
Excellent work Hero team.
We are a Hero member now and always look forward to working with them.

Jared Evans

We've used Hero Plumbing previously. Both times reliable and flexible with changing times (helpful during covid ISO periods!)
Hayden was on time and explained the issue clearly, fixed it,then also did some extra checks on water pressure and taps to ensure there were no underlying issues.
Would recommend their services.

Denzi K

Hero Plumbing has been our go to plumber for years.

They replaced our hot water system with excellent workmanship, professionalism and in a timely manner - as always!

Hayden Davidson

Brilliant service from the first phone call to Hero Plumbing as Sam the manager booked us in very efficiently. I received a confirmation  email, a phone call on approach and all went smoothly & work conducted was beautiful . The team did a great job even dig up on our sewer and cut concrete & repaired the issue and our sewer is running like a dream.
Thanks for your great efforts guys!


Victoria Barmina

I knew Sam when he was working alone. And from the first time I was pleasantly surprised by his work. A little later I found out that he has his own business. I am very happy about that. And I am very glad for myself that I have such a company that I can always rely on.

Thank you for your work. People need you very much.

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