Changing from Gas to Electric Hot Water

More and more Australian households are making the switch from gas to electric when it comes to heating their water. Rising gas costs, questions of sustainability, and government incentives all make switching to an electric system an attractive proposition, but is electric the only way to go or does gas still have a part to play in modern water heating?

This article will cover everything you need to know in order to make an informed choice about your water heating options. From the types of electric hot water systems available to how much it all costs, we will deep dive into the details of making the switch and whether doing so is right for you.

Why Switch from Gas to Electric Hot Water?

Hot water systems are typically the second-most energy intensive appliance in the home, according to MaketheSwitch.org.au, so choosing how to power them matters, both in an environmental context with our carbon footprint and for our household budget and energy bills.

As a fossil fuel, using gas has more detrimental environmental repercussions than renewable electricity. While it is true that Australia still uses coal-fired power plants, 40% of all of Australia's energy needs now come from renewable sources and this figure is rising every year. By removing reliance on gas, we are removing another environmental pollutant and lessening the need for natural gas to be mined.

Electric hot water systems have also become incredibly energy efficient. Some 50% of all hot water systems in Australia are electric, and as they take the largest share of the market, so too do they take the main share of technological research and innovation investment. Gas prices are also currently high and expected to remain high, according to CHOICE.

Further, there are government rebates or incentives available in many states and territories to encourage Australians to make the switch. Federal schemes, such as the Small-Scale Renewable Energy Scheme and the Household Energy Upgrades Fund, are both available across the country to make investing in more sustainable energy systems more accessible for households and small businesses.

Finally, there are the safety considerations of using gas, including the risk of gas leaks and explosions. While systems installed outside the home are generally safe, systems installed indoors are at risk of indoor air pollution from carbon monoxide, nitrogen dioxide, and particles in the surrounding air.

Types of Electric Hot Water Systems

There are three electric options when it comes to choosing your new hot water system. Each has its benefits in terms of costs, efficiency, lifespan, and space requirements, which will help determine the correct choice for your household or business needs.

Traditional Electric Storage Hot Water Systems

These traditional systems use electricity to heat an element in the water tank, heating the water like a giant electric kettle. Tanked systems will keep the water hot throughout the day, ready to be used whenever required. They can also be switched to off-peak tariffs, meaning they only heat water during periods of lower demand and lower costs (usually late at night or very early morning).

Traditional systems have a lifespan of 10–12 years and do not take up much space, often placed outside along the side of the house. Smaller systems can be placed inside cupboards, such as inside a unit. A family home-sized tank system can be as affordable as $1000.

Heat Pump Hot Water Systems

Electric heat pump systems have much greater energy efficiency, using only 30% of the energy required by traditional storage systems, according to Energy.gov.au. Heat pumps have a much higher upfront cost, however, with a family-sized system costing $3000 or three times the price of a traditional storage system.

However, over their 10–15-year lifespan, this investment can pay for itself in energy savings. Combined with government assistance, this can be a very smart choice. For example, Energy.gov.au states that the Victorian government's Hot Water Rebate "provides Victorian households with up to $1000 to assist with the purchase of an eligible heat pump or solar hot water system".

Solar Electric Hot Water Systems

As their name suggests, solar hot water systems reduce greenhouse gas emissions and save energy by harnessing the power of the sun to generate electricity to heat the water. Solar is by far the most environmentally friendly option, freeing you from relying on the public grid.

Solar hot water systems have the longest lifespan of all, lasting from 10 to 25 years or even longer. However, they are more expensive to set up initially, with a typical system and solar panel setup costing between $3000 and $7000. There are several rebates and initiatives available for solar energy to help offset a higher upfront cost. Additionally, this initial cost is eventually offset by decades of free energy delivered directly by the sun.

Cost Considerations: Upfront vs. Long-Term Savings

While solar is the most expensive in terms of upfront installation costs, followed by heat pump and then traditional systems, they also have the longest lifespan and deliver the greatest investment in terms of long-term savings from running costs.

Heat pumps are second, costing a mid initial investment but delivering long-term savings by using a mere 30% of the electricity required by a traditional storage system. Taking into account that the hot water system uses one-quarter (25%) of total household energy use (according to Energex), that is a lot of kilowatt hours to be saved over the next decade or more.

Finally, the traditional system is cheap and widely accessible and a perfect way to switch to enter the electric hot water system market if you are unready or unable to invest in one of the systems mentioned above. Electric systems still rely on the public grid, but it is a grid increasingly supplied by renewable energy.

Installation Process & What to Expect

A standard installation can last anywhere between 2 and 6 hours, depending on the system chosen and the location of installation. Traditional systems will be at the lower end of this estimate, while solar-powered systems will take longer as the panels will need to be installed on the roof.

Some systems, like solar, will also have electrical requirements as new electrical cables and lines will need to be installed through your home from the panels to the hot water system itself. Talk to your local electrician about converting to an electric storage tank system to learn more about the process.

Common Questions & Concerns

Is an electric hot water system as effective as gas?

When talking about system effectiveness, most people assert that gas systems are more energy efficient. As they use gas, not electricity, this is technically true. However, electric systems perform just as well as gas systems without the need for an additional utility or the use of fossil fuels.

Will I have enough hot water?

Yes, electric heaters provide enough hot water for standard household use.

What happens during a power outage?

Traditional and heat pump tanked heaters are insulated and will maintain their heat even if the power goes out. Instantaneous systems will not be able to provide hot water without power. Solar hot water systems will continue to use the sun's power to generate hot water.

How long does it take for an electric system to heat water?

Electric systems typically take 3–5 hours per day to heat water.

How much does it cost to convert a gas hot water heater to electric?
Replacing your gas hot water system with an electric option can cost as little as $1000 for a traditional tanked system to up to $7000 for a full solar-powered water heating system.

Is it worth switching from gas to electric water heater?

We think so! Gas prices remain high with no sign of lowering in the near future, while electric systems bring with them a wide range of benefits that simply outcompete most gas systems.

Can I change a gas water heater to an electric water heater?

Yes, you can replace a gas water heater with an electric water heater.

Is it cheaper to heat hot water with gas or electric?

With current gas prices staying high with no signs of reducing, electric options are becoming cheaper and increasingly more affordable to run.

Making the Switch: Steps to Take

When choosing your new hot water system, speak to your local electrical experts at Easther Electrical. We can help you reduce running costs by assessing your current system and household needs to choose the right electric system for you and your family.

An electric system, whether you go for traditional, heat pump, or solar, is an investment that will repay you with reliability, long-term cost savings, and all the hot water you could need.

Get in touch with our friendly team at Easther Electrical to make the switch to electric today.