Hot Water Running Cost Calculator
Compare what different hot water systems cost to run each year on dated NSW reference rates, and see what you could save by switching to a more efficient system.
Reference rates checked 10 September 2026 | Electricity from 1 July 2026; gas from 31 July 2026 | Estimates to compare systems, not a quote
Energy Prices Over Time, Indicative
A rough picture of NSW household electricity and gas usage rates from 2008 to 2024. The figures haven't been checked against each source document, so treat the chart as background, not a price history.
Show the figures behind this chart
| Year | Electricity (c/kWh) | Gas (c/MJ) |
|---|---|---|
| 2008 | 15 | 1.8 |
| 2010 | 20.5 | 2 |
| 2012 | 27.5 | 2.3 |
| 2014 | 28 | 2.7 |
| 2016 | 26.5 | 3 |
| 2018 | 29.5 | 3.2 |
| 2020 | 28 | 3.4 |
| 2022 | 32 | 3.8 |
| 2024 | 35.5 | 4.5 |
Whatever prices do next, the fuel a system runs on matters as much as the unit itself. A heat pump runs on electricity and, in the calculator below, uses 440kWh per person a year against 1,400kWh for an electric storage tank.
About these figures: Average NSW residential usage rates, excluding supply charges. Electricity in c/kWh (general tariff); gas in c/MJ. Compiled February 2026 from IPART regulated retail tariff determinations (NSW, 2008–2014); AEMC Residential Electricity Price Trends reports (2015–2019); AER Default Market Offer determinations, Ausgrid zone (2020–2024); AGL and Jemena published residential gas tariffs (2008–2024). Rounded figures compiled from the publications listed. They haven't been matched year by year to a page of each document, and they use a different basis from the checked reference rates used by the calculator, so read them as a rough picture of the trend, not exact cents. The earlier 2026 figures (36.5c/kWh, 4.7c/MJ) did not match the checked reference rates used by the calculator, so that point has been left out. The chart is context only; no figure below uses it.
Your Household
Select the option closest to your household
Your Situation
These options refine your estimate
Your current hot water system
Pick what you have now and every option below shows what it could save you, or cost you, each year. Leave it on “Not sure” to just compare costs.
Electric hot water meter
Many electric systems run on a separate off-peak meter. Your bill will show it.
General: 33.14c/kWh reference rate
Gas appliances at home
Decides whether the gas supply charge belongs to your hot water
Includes the $356/yr gas supply charge, counted once
Rooftop solar PV system
Solar panels can cut grid electricity for a heat pump or an electric storage tank
No rooftop solar counted. Pick your system size to see how it changes the electric options.
Change the solar assumptions
Button settings (heat pump / electric storage): 6kW 40% / 20%, 8kW 45% / 25%, 10kW 50% / 30%, 12kW 55% / 35%, 15kW 60% / 40%, 20kW 65% / 45%. The heat pump share is capped at 65% because of winter, cloudy runs and reheating after dark. Electric storage is set 20 points lower: its element usually draws about 3.6kW for hours at a time, several times what a heat pump draws, so more of it comes from the grid when the panels are busy or the sky is grey.
Solar + electric boost gets no panel reduction at all. The collectors on the roof already do most of its heating, and when the booster kicks in (often evenings or a run of cloudy days) isn't modelled. Panel size alone can't predict any of this; a battery, seasonal output and time-of-use pricing aren't modelled either.
Estimated Annual Running Cost
Based on dated NSW reference rates for a 3–4 person household (worked out for 3 people)
Lowest modelled running cost: Heat Pump, $437 a year.
Pick your current system to see what each option could save you.
- Heat PumpCHEAPEST$437/year1,320 kWh
- Solar + Electric Boost$537/year1,620 kWh
- Solar + Gas Boost$809/year7,320 MJ
- Gas Continuous Flow$1,094/year13,950 MJ
- Gas Storage$1,285/year18,600 MJ
- Electric Storage$1,392/year4,200 kWh
Energy Usage Breakdown (kWh)
How much energy each system uses in this model, per day and per year, for a 3–4 person household
Heat Pump
- Daily use
- 3.6 kWh
- Yearly use
- 1,320 kWh
- From your panels
- None
- Running cost per day
- $1.20
Modelled at 1,320kWh a year against 4,200kWh for electric storage
Solar + Electric Boost
- Daily use
- 4.4 kWh
- Yearly use
- 1,620 kWh
- From your panels
- None
- Running cost per day
- $1.47
Solar + Gas Boost
- Daily use
- 20.1 MJ
- Yearly use
- 7,320 MJ
- In kWh terms
- 2,033 kWh
- Running cost per day
- $2.22
Gas Continuous Flow
- Daily use
- 38.2 MJ
- Yearly use
- 13,950 MJ
- In kWh terms
- 3,875 kWh
- Running cost per day
- $3.00
Gas Storage
- Daily use
- 51.0 MJ
- Yearly use
- 18,600 MJ
- In kWh terms
- 5,167 kWh
- Running cost per day
- $3.52
Electric Storage
- Daily use
- 11.5 kWh
- Yearly use
- 4,200 kWh
- From your panels
- None
- Running cost per day
- $3.81
kW vs kWh: kW (kilowatts) is how much power a system draws at any moment. kWh (kilowatt-hours) is the energy it uses over time, and that's what you pay for. The kW rating on your unit's data plate matters for circuit sizing and for how much of it your panels can carry at once, which is why the solar setting is a stated assumption rather than worked out from panel size. Gas use is also shown in kWh (3.6MJ = 1kWh) so you can compare.
A Heat Pump has the lowest running cost here: $437 a year
Tell us what you have now and we'll show the yearly difference. Pick your current system above. Purchase, installation, maintenance and disconnection costs aren't included.
Detailed Comparison
Annual estimates for a 3–4 person household on the Northern Beaches
Heat Pump
$437/yrMoves heat from outdoor air into stored water; performance depends on model and conditions.
Energy $437
Solar + Electric Boost
$537/yrSolar thermal collectors heat water, with an electric booster when needed.
Energy $537
Solar + Gas Boost
$809/yrSolar thermal collectors heat water, with a gas booster when needed.
Energy $453 + gas supply $356
Gas Continuous Flow
$1,094/yrA gas burner heats water when a hot tap is used.
Energy $738 + gas supply $356
Gas Storage
$1,285/yrA gas burner heats stored water; tank and pilot losses vary by model.
Energy $928 + gas supply $356
Electric Storage
$1,392/yrAn electric element heats a storage tank.
Energy $1,392
| System Type | Fuel | Energy/Year | Cost/Year | vs Your System |
|---|---|---|---|---|
| Heat PumpCHEAPESTMoves heat from outdoor air into stored water; performance depends on model and conditions. | Electricitygeneral tariff | 1,320 kWh | $437energy $437 | — |
| Solar + Electric BoostSolar thermal collectors heat water, with an electric booster when needed. | Electricitygeneral tariff | 1,620 kWh | $537energy $537 | — |
| Solar + Gas BoostSolar thermal collectors heat water, with a gas booster when needed. | Natural gas+ $356/yr supply | 7,320 MJ | $809energy $453 + supply $356 | — |
| Gas Continuous FlowA gas burner heats water when a hot tap is used. | Natural gas+ $356/yr supply | 13,950 MJ | $1,094energy $738 + supply $356 | — |
| Gas StorageA gas burner heats stored water; tank and pilot losses vary by model. | Natural gas+ $356/yr supply | 18,600 MJ | $1,285energy $928 + supply $356 | — |
| Electric StorageAn electric element heats a storage tank. | Electricitygeneral tariff | 4,200 kWh | $1,392energy $1,392 | — |
Rates used: Electricity 33.14c/kWh (general tariff, reference rate) | Gas 3.87–6.19c/MJ in daily blocks + 97.63c/day supply, counted once. The general electricity supply charge is left out because the house stays connected either way.
These are illustrative estimates from dated reference rates, not a quote or a prediction of your bill. Your retailer, plan, usage and the model you choose will change the numbers.
Sources: AGL Ausgrid residential standing offer, including GST (PDF). AGL Jemena residential standing offer, including GST (PDF). Checked 10 September 2026. Energy use per person: illustrative annual energy assumptions; not a product rating or measured household usage.
Understanding Hot Water Running Costs in NSW
Why Running Costs Matter as Much as Purchase Price
Most hot water systems are in for ten years or more, depending on the model, water quality and maintenance. Over that time the energy bill can add up to more than the unit cost. A system that's cheaper to buy isn't always cheaper to own.
Heat Pumps: The Efficient Electric Option
A heat pump moves heat from the outside air into the water, like a fridge in reverse. A good unit delivers around three to four units of heat for each unit of electricity, depending on the model, the air temperature and how it's set up. Sydney's mild winters suit them better than colder parts of the country, though output still drops on cold mornings.
The Gas Supply Charge
If hot water is your only gas appliance, you pay a daily supply charge just to stay connected: about $356 a year on the reference rates, before you use any gas. That's why it's part of the hot water cost above, counted once. Swap to a heat pump and close the gas account and that charge stops, though your retailer or network may charge to disconnect or remove the meter.
Switching Off Gas: What to Check
If hot water is your last gas appliance, the calculator shows the yearly difference with the supply charge included. Before switching, check your switchboard has room for the new circuit, where the unit can go (heat pumps need airflow and make some noise), and if you want to keep a gas cooktop. We look at all of that during a free on-site quote.
Off-Peak Electricity
Many electric hot water systems run on a controlled load tariff: a separate circuit the network switches on during set hours, mostly overnight. On the reference rates it's 19.31c/kWh against 33.14c/kWh on the general tariff, plus a small daily service charge. Some heat pumps are fine on it; others need a longer run window. We check the model and your meter setup first.
Rebates and Incentives
Eligible heat pump and solar hot water installs may qualify for federal small-scale technology certificates and the NSW hot water upgrade incentive, which reduce the upfront cost. Eligibility depends on the model and your home, and the paperwork has to be right before the install. Read our NSW rebate guide, or ask us during a free on-site quote.
How We Worked These Numbers Out
Each system gets a yearly energy figure per person, scaled by household size: heat pump 440kWh, electric storage 1,400kWh, gas storage 6,200MJ, gas continuous flow 4,650MJ, solar + electric boost 540kWh, solar + gas boost 2,440MJ. These are comparison assumptions, not measured use or a product rating. Tank losses don't scale exactly with people, and shower length, temperature settings and pipe runs all change real costs.
Electricity cost is the grid kWh times the rate, plus the off-peak service charge where it applies, plus the feed-in credit you give up for any solar energy used. Gas use is spread evenly over 365 days and charged through the daily blocks below.
| Daily block | c/MJ |
|---|---|
| First 20.712MJ | 6.1897 |
| Next 20.384MJ | 4.2196 |
| Next 49.315MJ | 4.0667 |
| Remaining use | 3.8687 |
Ready to Get Started?
Get expert advice from your local Northern Beaches hot water specialist.
25+ years experience · Licensed & Insured · Emergency enquiries welcome