Gas vs. Electric Water Heaters: Which Is More Cost-Effective?

gas vs. electric water heaters which is more cost effective

Are you in a bit of a pickle choosing between a gas and an electric water heater for your home? It’s the classic conundrum, with both types waving the promise of toasty showers and snug baths.

Yet, with energy costs doing a number on our bank accounts these days, making the wrong choice could leave your budget feeling under the weather. As fellow Aussie homeowners who’ve navigated these waters before, we totally get how daunting it can be – sifting through choices without wanting to earn a degree in industry jargon.

But guess what? We’ve rolled up our sleeves and tackled the nitty-gritty to spare you from that headache. Get this: roughly 21% of household energy consumption is dedicated just to keeping our water hot.

That’s quite the chunk out of the household pie! So, selecting an efficient system isn’t just wise; it’s essential! We’re here to help by breaking down everything from initial splurge versus ongoing bills, efficiency ratings, safety must-knows – all while throwing in some yarn about green alternatives.

By the time you finish this read, picking out your hot water system will feel like cruising down an open road.

Stick around; let’s unravel which heater can keep your water cosy without giving your wallet the shivers!

Key Takeaways

  • Gas water heaters have higher installation costs but lower monthly bills than electric ones.
  • Electric water heaters are cheaper to buy, but cost more each month because of high electricity prices.
  • Solar hot water systems and heat-pump water heaters offer long-term savings and help the environment.

Cost Comparison of Gas vs Electric Water Heaters

When it comes to upfront costs, gas water heaters are generally more expensive to install compared to electric water heaters. However, when considering the monthly operating costs,

cost comparison of gas vs electric water heaters

gas water heaters tend to be more cost-effective in the long run due to lower fuel prices.

Upfront costs

Electric water heaters often have lower upfront costs compared to gas models. You can find a quality electric storage water heater without breaking the bank.

Still, if you’re eyeing an electric heat pump hot water system, they usually cost more initially but can offer significant energy savings down the track.

Switching to a gas hot water system means paying for installation, which includes running gas lines and ventilation systems. These expenses add up quickly and can make installing a new gas hot water system quite costly.

If your home is already equipped for gas, this might not be as much of an issue, but for those starting fresh, it’s a hefty investment.

Monthly operating costs

Now, when considering the monthly operating costs of gas vs. electric water heaters, it’s essential to factor in both energy efficiency and utility bills. Gas water heaters tend to have lower monthly operating costs due to the typically lower cost of natural gas compared to electricity.

Additionally, with an efficient gas hot water system, you can potentially save on energy bills over time, making it a cost-effective option for homeowners aiming to reduce their utility expenses.

Electrically powered water heaters generally have higher monthly operating costs due to the higher cost of electricity compared to natural gas. It’s important for homeowners seeking ways to minimise their utility bills to consider this aspect when deciding between gas and electric water heaters.

Factors to Consider When Choosing Between Gas and Electric Water Heaters

When choosing between gas and electric water heaters, it’s important to consider factors such as efficiency and energy savings, lifespan, safety, installation requirements, and size.

These factors can help you decide which type of water heater is the best fit for your home.

Efficiency and energy savings

Gas water heaters are known for their high energy efficiency, reducing monthly operating costs. With a faster recovery rate, they ensure hot water is available when needed. On the other hand, electric water heaters provide consistent heat and boast higher energy efficiency ratings than

factors to consider when choosing between gas and electric water heaters

before, resulting in potential long-term savings. Considering the cost-effective aspects of both options, understanding your household’s hot water usage patterns will help in deciding between gas and electric systems. Investing in efficient models can lead to significant savings over time.


Gas water heaters generally have a shorter lifespan of around 10-15 years, while electric water heaters can last between 12-15 years. Regular maintenance and checking for corrosion or leaks can help extend the lifespan of your water heater.

It’s important to consider the long-term durability when choosing between gas and electric water heaters to ensure you make a cost-effective choice for your home.

Both gas and electric hot water systems require periodic maintenance to extend their lifespan. Checking for leaks and ensuring proper ventilation are essential steps in prolonging the life of your system.


When considering the safety of water heaters, it’s essential to install proper ventilation for gas units to prevent carbon monoxide buildup. Regular maintenance is crucial for both types to ensure safe and efficient operation.

Ensure that electric units are properly earthed and insulated to avoid electrical hazards.

Always check the pressure relief valve on your water heater regularly for potential leaks or malfunctions. It’s also important to keep flammable materials away from any type of water heater, especially gas units, as they pose a fire hazard.

Installation and size

Installing a gas water heater may require more space due to ventilation requirements and the need for a flue. Electric water heaters usually take up less space as they don’t have these same ventilation needs.

When choosing a hot water system, consider the available installation space in your home, as well as any additional requirements for fitting and venting the chosen unit.

Size also matters when it comes to installation, particularly if you’re replacing an existing system. Ensure that the new hot water system fits into the designated space without major modifications or extensive renovations.

Environmentally Friendly Options

Explore eco-friendly options like solar hot water systems and electric heat-pump water

environmentally friendly options

heaters to reduce your carbon footprint and energy costs. Find out more about the benefits of these environmentally friendly options in our full blog post!

Solar hot water systems

When considering solar hot water systems, make sure to evaluate your home’s sun exposure and space for panels.

  1. Solar hot water systems utilise sunlight to heat water, reducing the reliance on traditional energy sources and lowering monthly operating costs.
  2. The initial investment in solar hot water systems can be higher, but various rebates and incentives are available to offset the upfront costs.
  3. With advancements in technology, solar hot water systems are now more efficient and reliable, offering a cost-effective and environmentally friendly option for Australian homeowners.
  4. Installation of solar hot water systems requires professional expertise to ensure optimal positioning for maximum sun exposure and efficiency.
  5. By choosing solar hot water systems, homeowners can contribute to reducing their carbon footprint while enjoying long-term savings on their energy bills.

Electric heat-pump water heaters

Here are some reasons why electric heat-pump water heaters are environmentally friendly options:

  1. Energy efficiency: Electric heat-pump water heaters are designed to transfer heat from the surrounding air or ground to heat water, rather than generating heat directly. This makes them significantly more energy-efficient compared to traditional water heaters that rely on combustion or electric resistance. As a result, they consume less electricity, helping to reduce overall energy consumption and environmental impact.
  2. Lower greenhouse gas emissions: Since electric heat-pump water heaters use electricity instead of fossil fuels, they produce fewer greenhouse gas emissions during operation. This is particularly beneficial in regions where the electricity grid is transitioning to cleaner and renewable energy sources. By using these water heaters, you can help lower carbon emissions and contribute to mitigating climate change.
  3. Reduced reliance on fossil fuels: Switching to electric heat-pump water heaters reduces dependence on fossil fuels such as natural gas or propane. Fossil fuel extraction and consumption contribute to air and water pollution, habitat destruction, and the emissions of greenhouse gases. By choosing an electric heat-pump water heater, you can decrease the demand for fossil fuels in your household and contribute to a cleaner, more sustainable energy future.
  4. Cost savings: Although the initial cost of electric heat-pump water heaters may be higher than traditional models, they can help save money in the long run. Their energy efficiency can result in substantial reductions in electricity bills, offsetting the initial investment over time. Additionally, some regions offer incentives and rebates for installing energy-efficient appliances, further reducing the overall cost of the water heater.
  5. Potential for integration with renewable energy sources: Electric heat-pump water heaters are compatible with renewable energy sources like solar power. By installing solar panels, you can generate clean electricity to power your water heater, making it even more environmentally friendly. This integration allows you to minimise your carbon footprint and maximise the use of renewable energy.
  6. Long lifespan: Electric heat-pump water heaters have a longer lifespan compared to traditional models, typically lasting 10-15 years or more. This longevity reduces the number of appliances that end up in landfills, supporting a more sustainable waste management system.
  7. Minimal environmental impact: Electric heat-pump water heaters operate quietly, emit no greenhouse gases directly, and have minimal impact on air quality. Unlike combustion-based water heaters, there is no production of harmful gases or odors during operation, making it a cleaner and more environmentally friendly option.

Which is the More Cost-Effective Option?

Gas water heaters offer lower upfront costs and a quick payback period. Electric water heaters have higher operating costs but are more energy-efficient than gas counterparts.

Consider efficiency, lifespan, safety, and installation when choosing between the two. Environmentally friendly options like solar systems or heat-pump water heaters present long-term cost-effective solutions.

Are you ready to make a practical and efficient choice for your home’s hot water system? Reflect on the importance of these decisions for long-term savings and sustainability. Explore further resources or consult professionals if you’re considering switching to a more cost-effective option.