How Much Does it Cost to Install a Hot Water System?

Installing a hot water system is a significant home improvement decision. There are a large number of considerations that need to be weighed up, including how much hot water is needed, sustainable opinions as well as your budget.

The cost of a new hot water system can vary widely based on the type chosen and the installation requirements for the property. The average cost of buying and installing a hot water system in Australia ranges between $1,000 to $5,000.

Each property will be unique with several factors influencing the final price. These include the: 

• Size of the unit
• Energy source (gas, electric, or solar)
• Brand
• Labour costs 
• Existing set up
• Location 

There are different costs for urban and rural areas too, so local research will prove more accurate than a state or national search. Homeowners can also consider long-term energy efficiency options when selecting a hot water system. 

While some may have higher upfront costs, greener energy options can lead to substantial savings on energy bills over time. 

For best results and accuracy, get quotes from licensed plumbers to compare prices and ensure proper installation.

Which System?

The most important thing when selecting a hot water system is the correct fit for your property. This involves considering the size, type, and brand that will provide enough hot water to cover everyone’s needs. Knowing which system is needed helps get the best performance and ensures correct installation.

Size

The size of a hot water system is crucial for meeting household demands. Smaller homes typically require tanks between 25 and 160 litres, while larger households may need up to 400 litres. Tankless systems are rated by flow rate, usually between 15 and 40 litres per minute.

Undersized systems can lead to insufficient hot water, while oversized ones waste energy and increase costs. To determine the right size, consider:

• Number of occupants
• Peak usage times
• Number of bathrooms and appliances

A family of four might require a 250-300 litre tank or a tankless system with a flow rate of 20-25 litres per minute.

Type

The main types of hot water systems are:

1. Electric
2. Gas
3. Solar
4. Heat pump

Electric systems are the most common in Australia and are easy to install. They come in both storage tank and instantaneous models. While initial costs are lower, running costs can be higher than other types of systems.

Gas systems offer quick heating and lower operating costs. They're available in natural gas and LPG options, with both storage and continuous flow models.

Solar systems use roof-mounted panels to heat water. They're environmentally friendly and can reduce energy bills, but have higher upfront costs.

Heat pump systems extract heat from the air to warm water. They're energy-efficient but can be noisy and less effective in colder climates.

Brand

Choosing a reputable brand can affect reliability, warranty, and after-sales support. Popular Australian hot water system brands include:

• Rheem
• Rinnai
• Dux
• Bosch
• Solahart

When comparing brands, consider:

• Energy efficiency ratings
• Warranty terms
• Customer reviews
• Price points

Higher-end brands often offer extended warranties and better energy ratings, which can offset higher initial costs through long-term savings.

Delivery Cost and Accessibility

The cost of delivering a hot water system can vary quite a lot. The distance from the supplier to the installation site plays a crucial role in determining delivery fees. Urban areas typically have lower delivery costs compared to rural or remote locations.

Delivery fees can range from $50 to $200 or more, depending on the location and system size. Be sure to ask what’s included in your quote. Some suppliers include delivery in the overall installation price, while others charge separately. 

Accessibility at the installation site also affects delivery costs and logistics. Narrow driveways, steep terrain, or limited access may require specialised equipment or additional labour, potentially increasing expenses.

For multi-storey buildings, delivering the system to the upper floors might incur extra charges. Lifts or cranes may be necessary, adding to the overall cost.

To minimise delivery expenses, homeowners can consider:

• Choosing local suppliers
• Opting for suppliers offering free delivery
• Coordinating delivery with neighbours if multiple systems are being installed in the area

Discussing delivery details with suppliers beforehand helps avoid unexpected expenses and ensures a smooth installation process.

Hot Water Installation

Installing a hot water system requires a licensed plumber. An electrician is sometimes required for certain systems as well. Make sure your installer is a qualified professional. This will give you the best results and protect the manufacturer’s warranty.

Plumbers and electricians often charge between $80 and $120 per hour. The total installation time varies based on the system type and complexity.

Factors affecting installation cost include:

• System type (electric, gas, or solar) 
• Location of the unit
• Accessibility of existing connections
• Any necessary upgrades to plumbing or electrical systems

For electric systems, installation is usually straightforward. The plumber connects the unit to existing water pipes and power outlets. This process can take 2-4 hours for a simple replacement.

Gas system installation is more complex. It requires proper ventilation and connection to gas lines. If a new gas line is needed, this can add to the cost and time. A typical gas system installation takes 3-6 hours.

Solar hot water systems are the most intricate to install. They involve roof work for panel placement and additional plumbing. This installation can take a full day or more.

Disposal of Old System

\Professional plumbers typically remove old hot water systems as part of their service. The cost for disposal can range from $50 to $150, depending on the size and type of unit.

\Local councils often have specific regulations for disposing of hot water systems. These rules aim to prevent environmental harm and ensure proper recycling of materials. Some councils offer free collection services for old units, while others may charge a fee.

\Many plumbers include disposal costs in their overall installation quote while others might charge extra for removing systems from difficult-to-access areas like roof spaces or basements.

\Recycling old hot water systems is becoming more common. Parts like copper, brass, and steel can be salvaged and reused. This practice helps reduce landfill waste and supports sustainable resource management.

For those keen on DIY, some scrap metal yards accept old hot water systems. They might even offer a small payment for the recyclable materials. However, professional removal is generally safer and more convenient for most homeowners.

Government Rebates

Government rebates are incentives to encourage homeowners to switch to energy-efficient options.

To access these rebates, homeowners should:

1. Research eligible hot water systems
2. Find an accredited supplier in their area
3. Obtain a quote for the installation
4. Have the new system installed by the accredited supplier

>The actual discount may differ from the rebate amount, as it's set by the accredited supplier. These incentives are separate from the long-term savings achieved through lower energy bills with more efficient systems.

The amount of rebate varies depending on the type of system being replaced and the new one installed. For instance; 

• Replacing an electric water heater with an air source heat pump water heater could attract a rebate between $400 and $670.
• Switching from a gas system to an air-source heat pump water heater may qualify for a rebate ranging from $190 to $310.

It's important to note that these rebates are typically provided as upfront discounts rather than cash back. Accredited suppliers, known as Accredited Certificate Providers (ACPs), apply the discount directly to the installation cost.

Hot Water System Running Costs

Different types of hot water systems have varying running costs. In many homes, water heating accounts for about 25% of total energy use. For larger families, this percentage can be even higher.

Electric systems are typically the most expensive to operate, while solar and heat pump options offer lower ongoing expenses.

Here's a breakdown of estimated annual energy costs for different hot water systems:

Table created using source calculator and imputing data for ACT, natural gas, residential electricity and loline solar. More input options are available. 

These figures are based on average usage of 120 litres per day, suitable for a three-person household. Actual costs may vary depending on individual usage patterns and local energy prices.

Solar hot water systems can be particularly cost-effective in the long run. They harness free energy from the sun, reducing reliance on grid electricity. However, their effectiveness depends on factors like location and available roof space.

Heat pumps offer another energy-efficient alternative. They extract heat from the surrounding air to warm water, using less electricity than traditional electric systems. This technology can result in significant energy savings.

Gas systems generally have lower running costs than electric ones, especially in areas with access to natural gas. However, homes relying on LPG bottles may face higher expenses due to the cost of gas bottle replacements.

When selecting hot water systems in Canberra, it's important to consider both initial costs and long-term running expenses. Investing in an energy-efficient system can lead to considerable savings on utility bills over the system's lifespan.