New Australian research warns gas hot water “poses large risk to energy bills”, supports switch to electric hot water

Researchers at the UTS Institute for Sustainable Futures have released a new report for ARENA that examines the potential role of electric hot water systems in helping Australian households reduce the cost of their home hot water and emissions from heating it.

The researchers concluded that:

“For consumers, locking in gas as a fuel source for domestic hot water poses a large risk to their energy bills”.

“Although the average user of gas hot water was better off in 2020 than those with electric water heating technologies, by 2030 they are projected to be significantly worse off”.

“The gap between gas and electric household only increases in 2040, with gas households paying $660–960 per year more than households with a heat pump”.

Electrifying home water heating provides major opportunities to reduce energy use and carbon emissions, protect against future energy price rises, and tap into a major source of energy storage to support integration of renewable energy in the grid.

Old fashioned electric resistance element storage tank water heaters may seem attractive due to their lower upfront cost, however their daily electricity running cost is much higher eg 5-10 times as much as a hot water heat pump.

Due to their clever design which can extract heat from the air all year round even in cold weather, heat pump water heaters offer higher efficiency and lower lifetime operating costs than gas or electric element tank heaters (graphic credit : Sanden).

Australian techAU readers who are thinking of switching their home hot water system to a heat pump should compare Sanden (premium), Reclaim (premium) or Hydrotherm (mid-range).

Personally I’ve had a great experience during the last few years with our Hydrotherm DYNAMIC/X8 gen 5 hot water heat pump, which I schedule to run in the middle of the day when our solar system output is highest and can control via an app on my phone.

Compared to our old instant gas hot water system my family saves over $400 a year from not having a gas bill anymore and thanks to the timer schedule the hot water heat pump hardly uses any grid electricity at all.

Avoid the lower quality cheaper hot water heat pump systems eg: Midea Chromagen which aren’t as reliable, long lasting or efficient, especially in colder areas of Australia.

Government incentives and a growing consumer push towards electrification are increasing adoption of hot water heat pumps in Australia, but this is slowed by their higher upfront cost and a lack of customer awareness of their benefits in low running costs and low emissions.

Real Life Example

One Victorian Reclaim customer reported “daily power consumption was reduced by over 80%” after their 315 litre electric element hot water tank was replaced by a Reclaim heat pump hot water system.

Before Heat Pump installation their hot water system used 14-20kWh/day. After Heat Pump installation it used 2-4kWh/day.