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5 Steps to Calculating the Cost of a Hot Water System

Most people wait until their hot water heater breaks before considering what kind of replacement they want. The problem with this is, it’s a big expense with a lot of different cost areas to research.

Keep in mind that the choice you make will have an impact on ongoing costs for energy supply, maintenance, parts and the expected time of replacement. Calculating all these costs from the beginning will help get you the best price and result for your home.

Factors affecting hot water costs

There are big differences in the overall costs of hot water systems which will vary depending on your:

1. Water heater size

Larger tanks cost more but also are essential for busy households. All heater types (electric systems, heat pumps, solar and natural gas) offer tank systems as part of their range and even continuous systems have different sizes available.

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2. Water heater type

There are some big brands on offer, and lesser-known ones as well, for a wide range of electric, gas, solar and heat pump options.

Energy Type Priced between May need replacement after
Electric $200 – $2,000 10-12 years (tanked) and 15-20 years (tankless)
Gas  $800 – $2,000 8 – 10 years
Solar $2,000 – $7,000 10 + years (reports in Australia of systems doing well after 20 years of service)
Heat pump $2,500 to $4,000 13 – 15 years

3. Same or switch?

It’s relatively fast and simple to replace your gas tank water heater with another gas tank water heater. For this reason, many homeowners typically stick to what they had previously, even if they inherited it with the house purchase and don’t find it suitable.

While switching to a different type does cost a little more, it can give you greater flexibility in choosing a type of water heater that will meet your requirements long-term, possibly also saving you considerable money too, especially if you switch to green energy like a heat pump or solar heating.

4. Delivery Costs

Delivery costs are something you want to factor into your water heater budget as they can be high depending on how far they need to travel and how easy your home access is. Water heaters are big and heavy and require multiple people to lift and carry, or even specialised lifting equipment if your home access is not straightforward.

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5. Approximate installation costs for your water heater

The hot water prices listed in the table above do not include installation. The costs will vary

considerably as some are more complex than others.

Usually, installations are priced by the time taken, with simple jobs taking around two to three hours, which should fall into a price range of around $220 and $660 for gas, and $330 to $800 for electric and heat pumps.

More complex jobs, where there are changes made to the original system or a new type of system is being installed, can cost double this or even more, this includes changing from an electric tanked system to electric continuous flow.

While changing to a new system may cost as much as $1,500 to $2,000, it might pay off if it means you have the hot water you need and it reduces your overall power bills for the next decade.

Call a plumber to find out what type of system is best for you. A good plumber will also offer an on-site assessment to give you an accurate quote before you commit to any big expenses.

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