Gas Hot Water vs Heat Pumps - How do they compare? – AEF | Australian Energy Foundation

Gas Hot Water vs Heat Pumps – How do they compare?

A common question we get here at AEF –  Is a hot water heat pump worth it if you currently have a gas system? How do the two compare?

To answer this question we’re sharing an excerpt from our latest hot water heat pump guide: How to Choose the Perfect Heat Pump for Your Home.

Beginning of excerpt

 Gas Hot Water vs Heat Pumps Running Costs

Since a heat pump’s initial price is higher than that of an ordinary gas system (although the rebates help!), many homeowners wonder if heat pumps really will pay themselves off (and more) over the years.


Here’s why:

Hot water systems annual running cost. Comparison of gas storage, gas instantaneous, electric storage, solar hot water and hot water heat pumps
Data sourced from Sustainability Victoria’s Hot Water Running Costs and compares running costs of 5.5 star gas storage system, 7 star gas instantaneous system, electric storage off peak system, high-efficiency solar gas boosted system, high-efficiency solar electric boosted system, high-efficiency hot water heat pump on off peak tariff.

45% of Australian houses come with a gas hot water system; as seen, their use costs an average of $410/year.

In contrast, high-efficiency heat pumps can do the same job for the same house for approximately $185/year. Please note exact running costs depend on each household’s electricity tariffs, pump model and hot water usage.

Thus, although the initial cost of a heat pump is higher than that of a gas hot water system, its lower running costs save the average homeowner up to $225/year and an average of $3,375 over its 15 year lifetime.

And this difference is only likely to grow; changes in the gas market mean that most of our gas resources are now exported overseas, making gas much more expensive for Australian residences.

Solar Panels + Hot Water Heat Pump = Extra Savings

If you have solar panels, your hot water heat pump’s running costs will be even lower:

  • Time your heat pump to power up around midday, when the sun is highest.
  • Your heat pump will store free solar energy in the form of hot water.
  • Then your family can use hot solar-powered water any time they want, even when the sun isn’t shining.
  • This combination time-shift + self-consumed energy will cut your electricity bills even more than just a solar system, or just a heat pump, would on its own.

No need for an expensive electric car or $10,000 storage battery — a solar energy and heat pump system allow you to store your solar energy with appliances you’d already have anyway.

Of course, the more water your household uses per year, the more a high-efficiency heat pump will save you. (See Sustainability Victoria’s hot water comparison chart to see how much more you’ll save per additional person).

So whether you’re a one-person or six-person household, a heat pump can indeed help you save thousands.

 Gas Hot Water vs Heat Pumps Greenhouse Gas Emissions

Heat pumps decrease more than just your electricity bills.

Hot water systems green house gas emissions. Comparison of solar hot water, gas, electric storage, heat pump.
Data sourced from the Renew hot water booklet.

As seen in the chart, the emissions from gas heaters are nearly equivalent to those from heat pumps (about 1.6 tonnes each).

However, this doesn’t mean that gas heaters are as sustainable.

While gas heaters and heat pumps release comparable emissions, acquiring gas is far more environmentally destructive.

As both Australian and foreign natural gas resources diminish, companies are forced to dig into near-inaccessible areas such as coal seams and shale layers. Obtaining gas from these difficult locations requires environmentally and agriculturally harmful methods such as hydraulic fracturing (fracking).

Thus, gas heaters depend on a non-renewable resource that has already caused significant environmental damage before it ever reaches a house.

In contrast, heat pumps are powered by electricity — whether it’s from your own solar panels, GreenPower, or the grid (which is becoming increasingly renewable).

Since heat pumps are powered by electricity instead of gas, they cause little to no of gas aquisition’s environmental impact.

In the end, the numbers show that gas hot water systems come up short compared to heat pumps. So it’s worth investing in a hot water system that’s both economically and environmentally friendly .

End of excerpt

Want to learn more? Read the complete guide: How to Choose the Perfect Heat Pump for Your Home.

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