You’re standing in your Gold Coast bathroom, about to replace your aging hot water system, when the question hits: “Should I stick with what I have, or is it time to switch?” The salesperson just quoted you prices for both gas and electric systems, each claiming their option saves you more money. Your neighbor swears by gas, but your colleague says electric is the future. Now you’re more confused than when you started.
Choosing between gas and electric hot water isn’t just about upfront costs—it’s a decision that affects your energy bills for the next 10-15 years, your home’s environmental footprint, and even your daily convenience. With Queensland’s rising energy costs and increasing focus on sustainability, making the right choice has never been more financially important. The wrong decision could cost you thousands in unnecessary expenses over your system’s lifetime.
The truth is, there’s no universal “best” option. The right choice depends on your specific situation: household size, energy rates, installation costs, existing connections, hot water usage patterns, and long-term plans. In this comprehensive guide, we’ll break down the real costs of gas versus electric hot water systems, compare operating expenses with 2026 pricing, examine efficiency and environmental factors, and help you calculate which option saves you more money in your Gold Coast home.
Understanding Gas Hot Water Systems
Gas hot water systems heat water using natural gas or LPG (liquid petroleum gas). They come in two main types: storage tank systems and continuous flow (instantaneous) systems.
How gas storage systems work:
A gas burner heats water inside an insulated storage tank (typically 135-400 liters). When you open a hot tap, heated water flows out and cold water enters the bottom of the tank, triggering the burner to maintain temperature. The pilot light keeps the burner ready to ignite instantly when needed.
How gas continuous flow systems work:
These tankless units heat water on-demand as it flows through a heat exchanger. When you open a hot tap, water passes through copper coils heated by a gas burner. No storage means no standing heat loss, but the burner must be powerful enough to heat water to your desired temperature as it flows.
Key advantages of gas systems:
- Fast recovery time – Heats water quickly, ideal for large families
- Lower running costs (typically) – Gas is cheaper per unit than electricity in most of Australia
- Continuous flow models never run out of hot water
- Works during electrical outages (if pilot is lit)
- Less expensive to run for high hot water usage households
Potential disadvantages:
- Higher installation costs (especially if no gas connection exists)
- Requires proper ventilation and flue systems
- Professional maintenance recommended annually
- Gas connection fees and supply charges
- Pilot light uses small amount of gas continuously (storage models)
Understanding Electric Hot Water Systems
Electric hot water systems use electrical heating elements to warm water stored in insulated tanks. They’re the most common type in Australian homes.
How electric storage systems work:
One or two heating elements (similar to kettle elements) immerse in the water tank, heating the water to your set temperature (typically 60-65°C). Thermostats control when elements activate. Most operate on off-peak electricity tariffs, heating primarily at night when rates are lowest.
Types of electric systems:
- Off-peak storage – Uses cheap overnight electricity to heat a full tank for next-day use
- Continuous (tariff 11) – Can heat anytime, costs more but ensures hot water availability
- Heat pump – Uses refrigeration technology to extract heat from air (highly efficient)
- Solar with electric boost – Solar panels pre-heat water, electric elements boost when needed
Key advantages of electric systems:
- Lower upfront installation costs
- No venting or flue requirements
- Simpler, less expensive maintenance
- Heat pumps and solar electric are highly efficient
- Reliable with established technology
- Off-peak rates significantly reduce operating costs
Potential disadvantages:
- Higher running costs (conventional electric vs gas)
- Slower recovery time between uses
- No hot water during power outages
- Off-peak systems can run out before the next heating cycle
- Large storage tanks take up more space than continuous flow gas
Running Costs Comparison (2026 Gold Coast Pricing)
Let’s compare actual running costs using current Gold Coast energy prices and realistic household usage.
Current energy rates (average Gold Coast 2026):
- Natural gas: $0.035 per MJ (megajoule)
- Bottled LPG: $0.045 per MJ
- Electricity (tariff 11 – continuous): $0.32 per kWh
- Electricity (tariff 31 – off-peak): $0.18 per kWh
- Electricity (solar self-consumption): $0.00/kWh while sun is shining
Energy content conversions:
- 1 kWh = 3.6 MJ
- Gas systems are approximately 60-70% efficient
- Electric resistance systems are 90-95% efficient
- Heat pumps are 300-400% efficient (they move heat rather than create it)
Annual Cost Examples by Household Size
Single person or couple (low usage: ~100-150L hot water daily)
Gas storage (135L):
- Annual gas consumption: ~8,500 MJ
- Cost: $298/year
Gas continuous flow:
- Annual gas consumption: ~6,800 MJ (no standing losses)
- Cost: $238/year
Electric storage off-peak (125L):
- Annual electricity: ~2,000 kWh
- Cost: $360/year (off-peak) or $640/year (continuous tariff)
Electric heat pump:
- Annual electricity: ~600 kWh
- Cost: $192/year
Winner for small households: Gas continuous flow ($238) or electric heat pump ($192)
Family of 4 (medium usage: ~200-250L hot water daily)
Gas storage (170L):
- Annual gas consumption: ~15,000 MJ
- Cost: $525/year
Gas continuous flow:
- Annual gas consumption: ~12,000 MJ
- Cost: $420/year
Electric storage off-peak (250L):
- Annual electricity: ~3,500 kWh
- Cost: $630/year (off-peak) or $1,120/year (continuous tariff)
Electric heat pump:
- Annual electricity: ~1,100 kWh
- Cost: $352/year
Winner for medium households: Gas continuous flow ($420) or electric heat pump ($352)
Large family of 6+ (high usage: ~350-400L hot water daily)
Gas storage (250L):
- Annual gas consumption: ~22,000 MJ
- Cost: $770/year
Gas continuous flow (high capacity):
- Annual gas consumption: ~18,500 MJ
- Cost: $648/year
Electric storage off-peak (400L):
- Annual electricity: ~5,200 kWh
- Cost: $936/year (off-peak) or $1,664/year (continuous tariff)
Electric heat pump (large model):
- Annual electricity: ~1,600 kWh
- Cost: $512/year
Winner for large households: Gas continuous flow ($648) or electric heat pump ($512)
Key Insights from Cost Comparison
1. Traditional electric storage is consistently the most expensive option across all household sizes when using standard tariffs
2. Off-peak electric improves costs significantly but still doesn’t beat gas or heat pumps
3. Gas continuous flow systems offer the best conventional technology value for most households
4. Electric heat pumps are the most economical option overall despite higher purchase price
5. LPG costs approximately 30% more than natural gas, changing the economics if natural gas isn’t available
Installation Costs: The Full Investment Picture
Running costs tell only half the story. Initial installation significantly impacts your total investment:
Gas Storage System:
- Unit cost: $900-1,500
- Installation (existing gas): $500-800
- Installation (running new gas line from meter): $1,500-3,000
- Total: $1,400-4,500
Gas Continuous Flow:
- Unit cost: $1,200-2,800
- Installation (existing gas): $600-1,000
- Installation (running new gas line): $1,500-3,500
- Total: $1,800-6,300
Electric Storage (Off-Peak):
- Unit cost: $600-1,200
- Installation (standard): $400-700
- Electrical work if upgrading: $200-500
- Total: $1,000-2,400
Electric Heat Pump:
- Unit cost: $2,500-4,500
- Installation: $800-1,500
- Total: $3,300-6,000
Solar Hot Water with Electric Boost:
- Unit cost: $3,000-6,000
- Installation: $1,000-2,000
- Total: $4,000-8,000
Break-Even Analysis
Let’s calculate how long it takes for lower running costs to offset higher installation prices.
Example: Gas continuous flow vs. electric storage (family of 4)
Electric storage off-peak costs $630/year; gas continuous costs $420/year.
Annual savings with gas: $210/year
If gas installation costs $2,500 more than electric ($3,500 vs $1,000):
Break-even: $2,500 ÷ $210 = 11.9 years
Example: Heat pump vs. gas continuous flow (family of 4)
Gas continuous costs $420/year; heat pump costs $352/year.
Annual savings with heat pump: $68/year
If heat pump costs $1,200 more than gas ($4,500 vs $3,300):
Break-even: $1,200 ÷ $68 = 17.6 years
What this means:
- If you already have gas plumbing, gas systems break even relatively quickly
- If you need new gas installation, electric options become more competitive
- Heat pumps require long ownership periods to recoup premium prices through savings
- When replacing existing systems of the same type, staying with that fuel usually makes financial sense
Efficiency and Environmental Considerations
Beyond costs, environmental impact matters to many Gold Coast homeowners:
Carbon Emissions Comparison (annual CO2 for family of 4):
- Gas storage: ~1,800 kg CO2
- Gas continuous flow: ~1,440 kg CO2
- Electric storage (coal-heavy grid): ~2,450 kg CO2
- Electric storage (Queensland grid mix): ~1,750 kg CO2
- Heat pump (Queensland grid): ~580 kg CO2
- Solar electric (self-consumption): ~0-200 kg CO2
Key environmental factors:
- Gas efficiency: 60-70% (energy lost through flue and combustion)
- Electric resistance: 90-95% (minimal losses, but electricity generation has losses)
- Heat pumps: 300-400% efficiency (moves existing heat, doesn’t create it)
- Solar power: Clean generation but requires sunny days
- Queensland grid: Approximately 65% coal, 15% gas, 20% renewables (improving annually)
Future-proofing consideration:
Queensland’s electricity grid is rapidly transitioning to renewables. Electric systems benefit from cleaner grids over time, while natural gas remains fossil fuel-based. If environmental impact matters to you, electric heat pumps powered by rooftop solar offer the cleanest solution.
Factors to Consider for Your Gold Coast Home
Beyond raw numbers, consider these practical factors:
1. Existing Infrastructure
Already have gas connected? Gas systems make more sense financially (no connection costs).
Electric only? Running gas lines costs $1,500-3,500, favoring electric upgrades.
2. Available Space
Limited indoor space: Continuous flow gas or external heat pumps
Outdoor installation possible: More options, better ventilation
In-roof installation: Electric storage works well; gas requires extensive fluing
3. Hot Water Usage Patterns
High demand times (morning rush): Gas continuous flow shines—never runs out
Spread-out usage: Electric storage with off-peak works fine
Unpredictable usage: Gas continuous or large storage capacity needed
4. Solar Power Consideration
Have rooftop solar? Time-of-use electric systems or heat pumps can run on free solar power during the day
Planning solar installation? Electric systems pair well with solar; gas doesn’t benefit
No solar plans? Gas costs typically beat standard electric tariffs
5. Local Gold Coast Factors
Coastal properties: Salt air accelerates corrosion—quality heat pumps handle this better than budget gas units
Heritage homes: Gas may be easier to retrofit than heavy electric tanks requiring roof/structural work
Rental properties: Lowest-cost installation usually wins (electric storage) unless tenant pays utilities
Bushfire zones: Consider fire risk of gas vs electric for your specific area
6. Household Size and Growth
Growing family: Gas continuous flow scales effortlessly; electric storage may need upsizing
Downsizing: Oversized systems waste energy—match capacity to actual needs
Multiple bathrooms: Simultaneous use favors gas continuous or multiple smaller electric units
7. Longevity and Maintenance
Gas systems: 10-15 year lifespan, annual professional service recommended ($150-250)
Electric storage: 10-12 years, minimal maintenance, anode replacement ($150 every 5 years)
Heat pumps: 10-15 years, annual filter cleaning, refrigerant checks every 2-3 years
Solar: 15-20 years for collectors, 10-12 for tank, more maintenance required
Making Your Decision: Decision Framework
Use this framework to determine your best option:
Choose Gas Continuous Flow if:
✓ You already have gas connected
✓ You have high hot water usage (family of 4+)
✓ You want unlimited hot water on-demand
✓ You’re comfortable with gas appliances
✓ You prioritize lower running costs over upfront savings
✓ You don’t have or plan for solar panels
Choose Gas Storage if:
✓ You have gas connected but want lower upfront costs than continuous
✓ You have moderate usage (2-4 people)
✓ You need replacement for existing gas storage
✓ Budget is tight but you want gas benefits
Choose Electric Storage (Off-Peak) if:
✓ You want lowest upfront installation cost
✓ You have predictable hot water usage patterns
✓ You can plan around off-peak heating cycles
✓ You’re replacing existing electric storage
✓ No gas connection exists and you don’t want to add one
Choose Heat Pump if:
✓ You prioritize long-term running cost savings
✓ Environmental impact matters to you
✓ You can afford higher upfront investment
✓ You’re planning to stay in your home 10+ years
✓ You have rooftop solar or plan to install it
✓ You want the most energy-efficient option
Choose Solar Hot Water if:
✓ Maximum environmental benefit is your priority
✓ You have suitable roof space and orientation
✓ You can afford the highest upfront cost
✓ You receive government rebates/incentives
✓ You’re in a very sunny location (Gold Coast qualifies!)
Government Rebates and Incentives (2026)
Queensland/Federal incentives currently available:
- Small-scale Technology Certificates (STCs): Solar and heat pump systems qualify, reducing purchase price by $300-1,000 depending on system size and location
- Queensland Energy Efficiency Rebate: May offer up to $1,000 for replacing electric resistance with heat pump (eligibility requirements apply)
- Solar for Rentals Trial: If you’re a landlord, subsidies may be available for solar or heat pump installations
- Low-interest loans: Some councils and programs offer financing for energy-efficient hot water upgrades
How to access rebates:
Contact Coastal Plumbing Professionals when getting quotes. We handle STC applications and can advise on available incentive programs, ensuring you receive all eligible benefits. These can reduce effective heat pump costs by $800-1,200,significantly improving their value proposition.
Hot Water System Recommendations by Profile
Budget-conscious family, no gas connection:
Electric storage (250L off-peak) – ~$1,200 installed
Running cost: ~$630/year
Most affordable upfront, acceptable running costs
Comfort-focused family, gas connected:
Gas continuous flow (24L/min) – ~$2,500 installed
Running cost: ~$420/year
Never run out, lower running costs, great family performance
Eco-conscious homeowner with solar:
Heat pump (270L) – ~$4,500 installed (minus $800 rebates = $3,700)
Running cost: ~$352/year (or less with solar)
Green option, excellent long-term savings, future-proof
Large family, high usage, gas connected:
Gas continuous flow (32L/min) – ~$3,500 installed
Running cost: ~$648/year
Handles simultaneous use, reliable, cost-effective for high volume
Small household, minimal usage:
Gas continuous flow (16L/min) – ~$2,200 installed
Running cost: ~$238/year
Pay only when using, no storage losses, compact
Rental property investor:
Electric storage (125L off-peak) – ~$1,000 installed
Running cost: Tenant pays
Lowest installation cost, minimal maintenance, simple
Frequently Asked Questions
Q: Will gas or electric save me more money over 10 years?
It depends entirely on your situation. For a family of 4 over 10 years:
- Gas continuous (with existing connection): $3,300 install + $4,200 running = $7,500 total
- Electric storage off-peak: $1,200 install + $6,300 running = $7,500 total
- Heat pump (with rebates): $3,700 install + $3,520 running = $7,220 total
The heat pump wins long-term, gas continuous if you already have gas, and electric storage if upfront budget is limited. Run the numbers for your specific household size and existing infrastructure.
Q: Is it worth switching from electricity to gas or vice versa?
Only if you’re replacing a failed system anyway. The cost of switching fuel types (adding gas lines or removing them) rarely pays off through savings alone. Stick with your existing fuel type unless you have compelling reasons (major efficiency upgrade, environmental goals, or already planned gas connection/removal).
Q: Do heat pumps work well in Gold Coast’s climate?
Yes, excellently! Heat pumps work best in warm, humid climates like the Gold Coast. They extract heat from the air, and our mild winters mean they operate at peak efficiency year-round. Cold-climate concerns don’t apply here—Gold Coast is ideal heat pump territory.
Q: How long do gas vs electric systems last?
Both typically last 10-15 years with proper maintenance. Gas systems may need more frequent component replacements (thermocouples, valves) while electric systems need anode replacements but fewer repairs overall. Heat pumps average 12-15 years. Coastal locations shorten lifespan for all types due to salt air corrosion—opt for premium materials.
Q: Can I install a hot water system myself?
No. In Queensland, gas fitters require specific licensing for gas systems, and electricians must connect electric systems. DIY installation violates regulations, voids warranties, and creates serious safety risks. Always use licensed professionals. At Coastal Plumbing Professionals, we’re licensed for both gas and electrical hot water installations.
Q: What about tankless electric systems?
Instantaneous electric systems exist but require enormous electrical capacity (20-40 amps) that most Gold Coast homes don’t have without expensive electrical upgrades ($2,000-5,000). They’re rare in residential applications. Gas continuous flow is much more practical for tankless hot water.
Q: Which system works during power outages?
Gas storage with pilot lights and gas continuous flow units work during electrical outages (though electric ignition models need power). Traditional electric storage provides whatever hot water remains in the tank but can’t reheat. Heat pumps require electricity. If power reliability concerns you, gas offers advantage.
Q: Should I get a bigger system “just in case”?
No. Oversized systems cost more upfront and waste energy keeping excess water hot. Size appropriately for your household:
- 1-2 people: 125-170L storage or 12-16L/min continuous
- 3-4 people: 250-315L storage or 20-24L/min continuous
- 5-6 people: 315-400L storage or 28-32L/min continuous
We help Gold Coast homeowners size systems correctly based on actual usage patterns, not guesswork.
Conclusion: Your Best Hot Water Investment
There’s no single “winner” in the gas versus electric debate—the right choice is deeply personal to your household’s needs, existing infrastructure, budget, and priorities. However, armed with the real-world cost comparisons, break-even calculations, and decision framework we’ve provided, you can make an informed choice that serves you well for the next decade.
Quick decision guide:
- Lowest upfront cost: Electric storage off-peak
- Lowest running cost: Heat pump or gas continuous flow
- Best for families:
Gas continuous flow (gas connected) or large heat pump - Most eco-friendly: Heat pump with solar or solar hot water
- Never running out: Gas continuous flow
- Best long-term value: Heat pump (if staying 10+ years)
The most expensive mistake is choosing based on someone else’s priorities rather than your own situation. What works for your neighbor may not work for you.
At Coastal Plumbing Professionals, we don’t push products—we assess your specific circumstances, run real cost calculations for your household size and energy rates, and recommend the option that genuinely saves you the most money. Our same-day service covers all Gold Coast suburbs, and we’re licensed to install both gas and electric systems with transparent pricing.
Ready to make the right hot water decision? Contact Coastal Plumbing Professionals today at 1300 590 085 or book a free consultation at coastalplumbingprofessionals.com. We’ll assess your home, explain your options with real numbers, handle all rebate applications, and install your new system professionally—usually within 24 hours of approval.
Resources & References
- Queensland Government Energy Comparison Tool: Compare energy costs by fuel type
- Australian Energy Regulator: Current gas and electricity pricing data
- Energex/ERGON Queensland: Tariff information and off-peak schedules
- Department of Energy and Water Supply (DEWS): Hot water system efficiency ratings
- Clean Energy Council: Rebate eligibility and installer directories
- Bureau of Meteorology: Queensland climate data for system selection
