Water heating makes up around a quarter of the average Australian household’s energy use. So the hot water system you install directly affects how much energy you consume overall, and how much that adds to your power bill.
This guide ranks solar, heat pump, electric, and gas hot water systems from most to least energy efficient, and breaks down what each one costs upfront and to run so that you can choose the right mix of efficiency, cost, and practicality for your home.
Quick Ranking: Hot Water Systems by Energy Efficiency
- #1 Solar Hot Water: Heats water almost entirely from free sunlight, so very little grid power or gas gets used, and that shows up as the lowest bill on this list.
- Performance can dip during extended wet season stretches, but a properly sized system with enough booster capacity keeps you covered.
- #2 Heat Pump: Uses a small amount of electricity to run the pump, while the actual heat comes free from the surrounding air, so you get far more hot water for the energy you pay for.
- Still depends on air temperature; colder air means less heat to draw from, but Townsville’s warm climate keeps that working in your favour nearly year-round.
- #3 Electric: Converts electricity into heat close to one-for-one, so it uses more energy than solar or a heat pump to heat the same amount of water, and that shows up as a higher bill.
- Runs off the grid regardless of weather, which is a big part of why it’s still the most common system in Townsville homes.
- #4 Gas: Burns fuel directly to heat water, losing some of that energy through combustion and exhaust, and typically costs the most to run of any system here.
- Delivers hot water on demand regardless of weather or grid conditions, which is its main advantage over the other three.
1. Solar Hot Water System
Solar (thermal) hot water system uses roof-mounted collectors to absorb heat from the sun, which then heats water either directly or through a heat-transfer fluid before it’s stored in a tank ready to use. It’s a different approach from every other hot water systems on this list, since the sun does most of the work before any power or gas gets involved.
Why Solar Hot Water System Ranks #1 for Energy Efficiency
- Well-Suited to the Local Climate: Townsville’s climate works in your favour year-round. In places like Melbourne or Hobart, cold winter days would noticeably slow how much heat the collectors can generate. Townsville’s winter days still sit between 24°C and 27°C, so you’re not losing performance the way you would further south.
- Less Reliance on Booster: You’ll rely on your electric or gas booster far less than most of the country. With close to 300 sunny days a year and around 8.5 hours of sun a day, there’s enough sunlight most days to fully heat what your household uses without the booster stepping in.
- Lower Running Cost: All of that adds up to the lowest running costs on this list, a fraction of what a system running entirely on grid power or gas costs to operate.
Solar Hot Water Costs and Considerations
Despite its high efficiency and low running costs, a solar hot water system has a few trade-offs to consider before installation.
- Higher Upfront Costs: Solar hot water systems cost more to install than electric or gas systems, since the price includes the solar collectors, storage tank, mounting equipment, plumbing, and controls. Government incentives such as Small-scale Technology Certificates (STCs) help reduce the initial installation cost for eligible systems.
- More Maintenance Requirements: Solar hot water systems have more components than a basic electric storage system, including solar collectors, circulation pumps, temperature sensors, controllers, valves, and the storage tank. These additional components increase maintenance requirements and servicing costs over the system’s lifespan.
Which Solar System Setup Is More Efficient?
Energy efficiency also depends on how the system circulates heated water. Townsville homes use 2 main configurations:
- Thermosyphon: A close-coupled thermosyphon system places the solar collectors and storage tank on the roof. As the collectors heat the water, warm water naturally rises into the tank while cooler water flows down into the collectors. Because it uses natural circulation instead of a pump, it uses very little electricity, making it more energy-efficient than a split system. However, the water-filled tank adds significant weight to the roof and requires suitable structural support.
- Split System: A split solar hot water system places the solar collectors on the roof and the storage tank at ground level. A circulation pump moves water between the collectors and tank, using electricity and making the system less energy-efficient than a thermosyphon system.
Solar Hot Water System We Install
Thermann Evacuated Tube Solar
At 1Touch Plumbing, our licensed plumbers install the Thermann evacuated tube solar hot water systems. Their vacuum-insulated tubes reduce heat loss, while their round design captures sunlight from different angles throughout the day.
The range includes:
- 250L + 22 evacuated tubes: For smaller households of around 2–3 people.
- 315L + 30 evacuated tubes: For medium to large households of around 4–6 people.
- 400L + 44 evacuated tubes: For larger households with higher hot water demand.
Thermann systems use electric boosting when solar energy is insufficient and feature glass-lined storage tanks for added corrosion protection and longer tank life. Depending on the model, warranties include up to 10 years for the tank and 15 years for solar collectors.
2. Heat Pump Hot Water Systems
A heat pump uses a small amount of electricity to run the pump itself, while the actual heat that warms your water comes free from the surrounding air. Instead of generating heat directly like electric or gas systems, it moves warmth that’s already there into your tank, which is why it ranks second on this list for energy efficiency.
Why Heat Pump Ranks #2 for Energy Efficiency
- High Energy Efficiency: A heat pump has a Coefficient of Performance (COP) of 3.5 to 5.0, which means it produces around 3.5 to 5 kW of heat for every 1 kW of electricity it uses, so you get more hot water from less electricity.
- Efficient in Townsville’s Warm Climate: Winter daytime temperatures in Townsville stay around 24°C to 27°C, while summer temperatures exceed 30°C. The warmer air gives your heat pump more heat to extract, so it operates efficiently year-round.
- Lower Running Costs: A heat pump only uses electricity to run the compressor, fan, and controls, so it costs 2-3 times less to run than traditional systems.
- Works Well With Solar PV and Off-Peak Tariffs: You can schedule the heat pump to run and store hot water for later use when your rooftop solar PV is generating electricity or during off-peak electricity tariffs when electricity is cheaper, so you don’t have to buy power at higher rates.
Heat Pump Costs and Considerations
The high efficiency and lower running costs of a heat pump come with several factors to consider before installation, including:
- Higher Upfront Cost: A heat pump costs more upfront than an electric system once you add the heat pump unit, storage tank, plumbing, electrical work, and installation. Eligible systems can receive Small-scale Technology Certificates (STCs), which reduce the upfront cost.
- Exposure to Coastal Air: The outdoor heat pump unit is exposed to Townsville’s salty coastal air, which can accelerate corrosion of metal components over time, so choose a unit with suitable corrosion protection to extend its service life.
- More Complex Maintenance: A heat pump has more components than a standard electric storage system, including a compressor, fan, heat exchanger, sensors, and valves. You need to service these components periodically, which increases your maintenance requirements and costs.
Heat Pump Hot Water System We Install
Thermann X Split Heat Pump
At 1Touch Plumbing, we install the Thermann X Split Heat Pumps.
Their range includes:
- 160L: Suitable for around 2 people.
- 250L: Suitable for around 2–3 people.
- 315L: Suitable for around 4–5 people.
- 400L: Suitable for around 5–6 people.
Because of the split design, you can install the heat pump unit separately from the storage tank, depending on your home’s space.
The system comes with a 10-year domestic tank warranty and a 6-year heat pump warranty, providing longer protection for the system’s major components.
3. Electric Hot Water Systems
Electric hot water systems heat water by running electricity directly through a heating element, either in a storage tank or as water flows through on demand. That direct-electricity approach puts it near the bottom of this list for energy efficiency. Yet it’s still the most popular choice among Townsville homeowners, largely because it reliably delivers hot water on demand.
Why Electric Hot Water System Ranks #3 for Energy Efficiency
- Lower COP: An electric heating element has a Coefficient of Performance (COP) of 1:1, meaning 1 kWh of electricity produces 1 kWh of heat, which makes it less efficient than a heat pump, which produces 3.5–5 kWh of heat from the same 1 kWh of electricity.
- Standby Heat Loss: An electric storage tank gradually loses some of its stored heat through the tank’s wall. The heating element then switches on to reheat the water, using additional electricity.
- Higher Running Costs: It costs more to run than solar or a heat pump, which makes it a costly option if you use large amounts of hot water or rely on standard electricity rates.
Electric Systems Cost and Considerations
Despite their lower energy efficiency and high running cost, almost 50% of Australian households use electric hot water systems because of their:
- Lower Upfront Cost: Electric storage systems have a simple design, so the storage tank, electric heating element, plumbing, and installation cost less, making them much cheaper upfront than solar hot water and heat pump systems.
- Ergon Energy Tariffs: Eligible households can use Ergon Energy tariffs such as Tariff 31 and Tariff 33, which provide electricity at lower rates during specific periods. You can heat and store water during these lower-cost periods to reduce your electricity costs.
- Rooftop Solar PV: If you have rooftop solar PV, you can use excess daytime solar generation to heat your water and reduce the amount of electricity you buy from the grid.
- Lower Maintenance: Electric storage systems have a simple design with fewer mechanical components, which means less ongoing servicing and maintenance.
Which Electric System Is More Efficient?
Different system configurations use electricity differently, which affects energy efficiency. Electric hot water systems come in 2 main configurations:
- Electric Storage Water Heater: An insulated tank heats and stores water for later use, but some heat escapes over time. However, you can schedule heating during low-cost, off-peak electricity periods or when your rooftop solar PV is generating excess electricity, making it more energy-efficient and less expensive than a continuous system because you can use cheaper or free electricity.
- Instantaneous Electric Water Heater: A continuous-flow unit heats water only when you open a hot tap, avoiding standby heat loss, but it needs a large amount of electricity at the time of use. Also, an instantaneous system does not store hot water for later use, so you cannot take advantage of off-peak electricity periods or excess rooftop solar PV, making it less energy-efficient and more expensive to run than an electric storage system.
Electric Hot Water System We Install
Thermann Smart Electric Storage
At 1Touch Plumbing, our licensed professionals install the Thermann Smart Electric, which helps manage electricity costs with smart heating controls. The Thermann Control App lets you schedule heating during solar generation or cheaper off-peak periods and store hot water for later use.
The range includes:
- 80L: For smaller hot water needs.
- 250L: For medium-sized households.
- 315L+: For larger households with higher hot water demand.
The system comes with different modes like Eco Mode to match your hot water habits, Schedule Mode to heat water when electricity is cheaper or solar power is available, and Holiday Mode to reduce unnecessary heating while you are away. It also has a 10-year cylinder warranty, providing long-term protection for the tank.
Factors to Consider When Choosing an Energy-Efficient Hot Water System
- Type of System: Based on your specific requirements and climate, choose options like heat pump systems, solar hot water systems or high-efficiency gas water heaters.
- Initial Cost vs. Long-Term Savings: While energy-efficient systems may have a higher upfront cost, they often offer significant savings over time through reduced energy bills.
- Size and Capacity: Choose a system that matches your household size and hot water demand. Oversized systems can lead to unnecessary energy consumption, while undersized ones might not meet your needs.
- Installation and Maintenance: Consider the complexity of installation and the availability of professional maintenance services. Proper installation and regular maintenance are crucial for optimal performance and longevity.
4. Gas Hot Water Systems
Gas hot water systems heat water by burning natural gas or LPG, either to keep a tank topped up or to heat water on demand as it flows through. That combustion process puts it last on this list for energy efficiency, since some of the fuel’s energy escapes as heat before it reaches the water, and burning gas also produces emissions.
Why the Gas Hot Water System Ranks #4 for Energy Efficiency
- Energy Loss During Combustion: A gas system converts around 80%–90% of the fuel’s energy into heat, while the remaining 10%–20% is lost during combustion and through the exhaust, so less of the energy you pay for reaches your hot water.
- Cannot Use Solar PV: Gas systems rely on natural gas or LPG to heat water, so they cannot use extra electricity from your rooftop solar PV. This means you miss the opportunity to use your free energy to heat water.
- Higher Running Costs: Gas hot water is usually the most expensive system to run, depending on your household’s hot water use, gas type, and local fuel costs. In areas where natural gas is unavailable, LPG cylinders are used, which cost more because you also pay for gas cylinder refills and delivery.
- Installation and Ventilation Requirements: Gas systems need clearance around windows, doors and air-conditioning intakes to safely discharge exhaust gases. This can limit where you install the unit, particularly if your home has limited outdoor wall space.
Gas System’s Costs and Considerations
- Faster Heating and Recovery: Gas burners deliver more heat than standard electric elements, allowing gas storage systems to recover around 150–200L of hot water per hour, compared with roughly 100L per hour for standard electric tanks. So, you get hot water back faster after heavy use.
- Lower Relative Running Costs: Where natural gas is available, gas usually costs less per unit of energy than standard electricity, which can lower your hot water bill, depending on your household’s usage.
- Low Maintenance: Gas systems have a simpler design, so you only need regular checks of the burner, gas pressure, heat exchanger and exhaust to keep your hot water system safe and reliable.
Which Gas System Is More Efficient?
Gas hot water systems come in 2 main configurations. Their different heating methods affect energy efficiency, gas consumption, and heat loss.
- Gas Storage Water Heater: A gas burner heats water inside an insulated tank and keeps it hot until you need it. The tank gradually loses heat between uses, so the burner switches on repeatedly to maintain the water temperature. This standby heat loss means the system uses gas even when you are not using hot water, making it less energy-efficient than a continuous system.
- Continuous Flow Gas Water Heater: A continuous flow system heats water only when you turn on a hot tap, so it does not need to keep a tank of water hot between uses. This eliminates standby heat loss and reduces wasted gas, which makes it more energy efficient than a gas storage system.
Gas Hot Water System We Install
Thermann R-Series Gas Instantaneous
At 1Touch Plumbing, we install the Thermann R-Series with up to 6.4-star energy efficiency, which means you use less gas to heat the same amount of water as a conventional gas storage system.
The Thermann R-Series includes:
- 17 L/min: Suitable for a small household with one shower or tap using hot water at a time.
- 21 L/min: Suitable for a typical household with one shower and other hot water use.
- 26 L/min: Suitable for larger households with higher hot water demand.
- 32 L/min: Suitable for high-demand households and can supply up to three showers at once.
The R-Series is available in both natural gas and LPG, so you can choose the option that matches your home’s available gas supply.
Thermann 4-Star Gas Storage
For homes that prefer a gas storage system, we install the Thermann 4-Star Gas Storage. Its improved burner technology uses gas more efficiently than older 3-star systems, helping reduce gas use and running costs.
The range includes:
- 135L: Suitable for around 3–4 people.
- 170L: Suitable for larger households with higher hot water demand.
Both models run on natural gas or LPG, giving you the flexibility to choose the fuel type available at your home.
The system also comes with a 7-year tank warranty and 1-year parts and labour warranty, giving you longer protection for the tank and essential repairs during the covered period.
Final Thoughts
Solar and heat pump systems cost the least to run and use the least energy overall, while electric and gas cost more to run but have a lower upfront price tag. But then it’s also important to remember that solar and heat pumps both depend on something outside your control – sunlight for one, mild air for the other.
Whereas electric doesn’t have that problem. Grid power’s always there, and if you’ve got solar PV, you’re running mostly on your own supply anyway. That’s a big part of why electric is still the system most Townsville homes have, even though it uses more energy to produce the same amount of heat.
So while efficiency matters, it’s not the only thing that decides the right system for your home. Your household size, hot water demand, energy tariffs, and whether you’ve got solar PV all factor in too. And weighing all of that up on your own isn’t easy.
That’s where our team at 1Touch Plumbing comes in. From choosing the system that fits your household to sourcing and installing the right model, we can handle the whole thing for you.
Contact us today for a free quote!
