Quick Answer
For most Sydney homes with rooftop solar, a heat pump is the best long-term choice. If gas is already connected and you don't have solar, instantaneous gas is still a strong option. Avoid plain electric storage unless install budget is the only consideration.
Replacing a hot water system is one of the biggest plumbing decisions a homeowner makes — and one of the easiest to get wrong. The wrong system can leave you paying more than you should every year, or fail years before it should because it wasn't suited to your home.
Here is how the three main options stack up in Sydney conditions.
Gas (instantaneous or storage)
Gas remains popular in Sydney because mains gas is widely available and recovery rates are fast — you won't run out of hot water during back-to-back showers. Instantaneous gas units are compact, wall-mounted, and tend to last well over a decade.
The downside: gas prices have climbed sharply in recent years, and new-build estates are increasingly being built all-electric.
Electric storage
Cheap to install, expensive to run. A standard electric tank has the lowest upfront cost but tends to be the most expensive system to operate over its lifetime.
Worth considering only if you have solar with a timer, or as a short-term replacement.
Heat pump
The clear long-term winner for most Sydney homes built after 2000. Heat pumps use a fraction of the electricity of a standard electric tank, often qualify for government STC rebates that significantly reduce install costs, and pair beautifully with rooftop solar.
They are noisier than gas and need outdoor clearance, but the running cost savings are real and add up year on year.
Our verdict
If you have solar, go heat pump. If you don't and gas is already connected, instantaneous gas is still a solid choice. Avoid plain electric storage unless budget at install time is the only factor.
Need help choosing? We do free on-site assessments across Sydney.
Thinking About a New Hot Water System?
Mr. Clog installs gas, electric, and heat pump hot water systems across Sydney. Free on-site assessment and honest advice.