Gas and electric hot water systems differ in how they heat water, how much they cost to run, how quickly they recover, and what space and maintenance they require. 

Understanding these differences helps you make the right choice. Because the system you choose directly affects your energy bills, whether you have uninterrupted hot water during peak times, and how well your setup holds up during Townsville’s storms and power outages.

In this guide, we’ll break down how each system works and compare them across upfront and running costs, and long-term use, so you can see clearly which option fits your household without second-guessing your decision.

TL;DR

• Choose electric if you want lower running costs with off-peak tariffs or solar, have moderate daily usage, or have limited outdoor space for gas bottles.
  
• Choose gas if you have a mains gas connection, need instant, continuous hot water, or have a large household.
  
• Upfront costs for gas and electric have a small gap, but switching fuel types (electric → gas or vice versa) can add $500–$1,500 for new LPG lines or switchboard upgrades.
  
• Running costs of electric tanks range from $600 to $900, dropping further with tariff 33 or solar soaking. Gas systems (LPG) typically cost $800–$1,000 per year.
  
• Performance of gas continuous-flow heating is high with zero recovery time; electric tanks have low performance and a recovery time of 4–6 hours to refill a 250 L tank.
  
• Gas units are compact but require ventilation clearances and space for LPG bottles. Electric tanks need no ventilation but are heavy and take up floor/closet space.
  
• The environmental impact of gas systems is greater, as they produce CO₂ per m³ burnt. Electric systems have low emissions when grid-dependent, and pairing with solar results in almost zero emissions.
  
• The lifespan of gas units is 15–20 years with biannual maintenance checks. Electric tanks last 8–12 years, requiring annual flushing, anode rod inspection every 3–5 years, and TPR valve testing every 6 months. 

Gas vs. Electric Hot Water Systems: Quick Overview

Before we dive in, a quick note on what we’re comparing here. While both gas and electric systems come in different types, gas systems are typically installed as instantaneous (continuous flow) units, while electric systems are more commonly used as storage tanks.

That’s why this guide focuses on comparing gas continuous flow systems with electric storage systems, because this reflects the most common real-world choice for Townsville homeowners.

Gas Hot Water System at a Glance

A gas hot water system uses a burner powered by natural gas or LPG to heat water. 

In a continuous flow gas system, since there is no storage tank, when you turn on a hot tap, a flow sensor detects the moving water and activates the burner. The water passes through a heat exchanger (a series of copper coils) positioned above the flame. The heat is transferred directly to the water as it flows through, so it is heated within seconds before reaching the tap. 

These systems use electronic controls to adjust the flame based on demand. If you turn on a second tap, the control panel increases the gas flow to keep the temperature steady. Many units are factory-set to the safe temperature of 50°C, often removing the need for an external tempering valve to mix in cold water.

Once the tap is turned off, the sensor detects the flow stop and shuts down the burner immediately, so energy is used only when hot water is actually needed.

Electric Hot Water System at a Glance

An electric hot water system heats water using immersed heating elements inside a storage tank. 

Cold water enters the tank through a dip tube and settles at the bottom, where a heating element is placed.

When the thermostat detects that the temperature has dropped below 60°C, which is the minimum storage temperature required under Queensland regulations to prevent bacterial growth, it switches the heating element on to heat the water. The heated water rises to the top of the tank and is drawn out when you open a tap, while fresh cold water flows in, and the cycle continues.

Because water is stored at high temperatures, a tempering valve is installed to mix in cold water before it reaches your taps, delivering water at a safe temperature of 50°C to prevent burns.

Upfront Investment: What You’ll Pay to Buy and Install

Gas Continuous-Flow System

Typical installed cost: $1,800 – $3,500

Gas systems are slightly more expensive upfront because they require specialist installation to manage high-intensity burners and exhaust. Costs include:

• The unit: Compact wall-mounted continuous-flow units cost $1,000–$2,200. The price depends on the flow rate – the higher the flow rate, the higher the cost.
  
• Specialised gas fitting ($150/hr): Licensed gas fitters install the regulator, copper lines, and weather shielding for LPG bottles, a process that takes 3–5 hours.
  
• Compliance and Ventilation: Because these units produce hot exhaust, they must meet strict Australian safety standards for placement. This involves placing the unit where flues or vents are safely away from doors, windows, and eaves to prevent fumes from entering your home, which adds to installation complexity and increases cost. 
  
• Electrical Connection: Most modern continuous-flow units use an electronic control unit to manage the flame. This requires a standard 10A outdoor power point. If your installation site doesn’t have an existing outlet, you will need to factor in a brief visit from an electrician.

Electric Storage System

Typical installed cost: $1,500 – $3,000

Electric systems are cheaper upfront because most Townsville homes already have the wiring and space for a tank. Costs typically include:

• The tank: A 250–400 L electric cylinder costs $800–$1,800, with higher prices reflecting more durable components and longer warranties.
  
• Installation labour ($120/hr): Labour includes connecting the tank to your existing plumbing and electrical supply, installing a dedicated circuit if needed, and ensuring the system meets Queensland requirements. This takes about 2-4 hours, depending on complexity.
  
• Safety compliance: Queensland regulations require a tempering valve to ensure water exits at a safe temperature (50°C) and a pressure-limiting valve to protect the tank from pressure surges. These are included in the upfront cost. 

When Switching Fuel Types Gets Expensive

You can see that gas and electric systems both fall into almost the same cost bracket, with a difference of only a few hundred dollars, but this is for a like-for-like replacement. If you change systems and fuel types, the total cost can rise quickly.

• Switching from electric to gas: You’ll often need a new LPG line installed from the bottles to your taps. This adds extra labour and materials, which can cost $500–$1,000 depending on your house layout.
  
• Switching from gas to electric: Older switchboards may not have enough capacity or the required safety switches to handle a dedicated 20 A circuit for the electric hot water system. If your home still uses outdated ceramic fuses, upgrading the switchboard to meet current safety standards can add around $800–$1,500 to the cost.

Running Costs: What You Pay Over Time

In Townsville, running costs vary between the two systems depending on your energy rate and daily hot water usage. You can expect to pay: 

Gas Continuous-Flow System

Annual running cost: $400 – $1,000

Gas costs vary depending on how the gas is supplied. For homes connected to natural gas, you pay a daily supply charge of about $0.80–$1.10. This is a fixed cost just for being connected, which adds $300–$400 per year, even if you use very little gas. On top of that, you also pay for the gas you actually use. 

For homes using 45 kg LPG cylinders, a four-person family typically uses 3-5 cylinders annually. Each refill and delivery costs between $120 and $170 per cylinder, and you also pay cylinder rental of about $45–$55 per bottle annually. Altogether, this brings total yearly costs to around $800–$1,000. This makes gas a premium choice for many Townsville households.

Electric Storage System

Annual running cost: $600 – $900

This estimate covers a typical four-person household using a 250–315 L tank, which uses around 3,300 kWh per year.

• Tariff 11 (standard rate): ~32.9 c/kWh → about $1,080–$1,100 per year
  
• Tariff 33 (cheaper rate): ~19.1 c/kWh → about $620–$650 per year

If your home has solar panels, costs can drop even further. By using a timer or solar diverter, you can heat water during the middle of the day when your system is generating excess power and store it for later use. So, there is no need to purchase electricity from the government grid. 

So, gas systems are only cheaper when electric systems use the standard tariff 11. However, when you move to Tariff 33 or use solar, electric storage becomes the more economical choice. 

Hot Water Performance & Recovery: How Fast You Can Get Water

Performance refers to how quickly a system can deliver hot water and how long that supply lasts during peak use. The recovery rate is how fast the system can heat water again after it has been used.

Gas Continuous-Flow System

Gas systems are the higher-performance option because a gas burner produces a strong, concentrated flame that transfers heat directly through a heat exchanger, which lets the system heat water very quickly and deliver it within 10 to 15 seconds of turning on the tap.

For continuous-flow units, the recovery rate is not really a limitation. Water is heated as it passes through the unit, so there is no stored supply to run out. As long as gas is available, the system can provide a continuous flow of hot water, even during back-to-back use. 

Electric Storage System

Electric systems use a slower, more gradual heating process. Submerged heating elements warm the entire tank over time. While you get hot water instantly at the tap because it is already stored and ready, you are limited by the tank’s physical capacity.

Once that stored hot water is used, the recovery process begins. A typical 250 L electric tank reheats at roughly 30 to 50 litres per hour, so it takes about 4 to 6 hours to heat a full tank.

In Townsville, this can be further limited by Tariff 33. This lower-cost electricity is typically supplied for around 16 hours per day, with short off-periods. If the tank runs out during one of these periods, it will not start reheating until the next power window. Switching to standard tariff electricity can heat water, but it comes at a much higher cost, so most households avoid it.

Installation & Space Requirements: How The System Fits in Your Home

Gas Continuous-Flow System

Gas systems are compact – roughly the size of a carry-on suitcase – and mount directly onto an external wall, so they don’t take up floor space. This makes them easier to fit in homes where space is limited.

However, they come with stricter placement rules because they produce exhaust. They must be installed with safe clearances – at least 500 mm from windows and air-conditioning intakes – so fumes don’t enter your home. In newer Townsville suburbs, where houses are built close together, finding a wall that meets these distances can be challenging.

If your home uses LPG, you also need space for two 45 kg gas bottles. These must sit on a level, non-combustible base (typically a 50–75 mm concrete pad) and be easily accessible to delivery trucks. The bottles cannot be enclosed or hidden because they require ventilation.

Electric Storage System

Electric storage units are easier to place because they don’t require gas lines or exhaust ventilation. They can be installed indoors or outdoors, as long as there is enough space and a suitable base.

The main limitation is their size and weight. A typical 315 L tank is around 1.8 m tall and 60 cm wide, making it difficult to fit in smaller townhouses or tight laundry spaces. When full, the tank can weigh close to 400 kg. In Queensland homes with timber floors or upper-storey installations, this requires a structural check or a reinforced base to safely support the load and avoid long-term damage to the framing.

Reliability: Will the System Perform During Extreme Weather

In Townsville, heavy rains and storm seasons can lead to temporary power outages, which directly affect how your hot water system performs.

Gas Continuous-Flow System

Most gas continuous-flow units require a small amount of electricity to ignite the burner and operate internal controls. This means that during a power outage, the system won’t operate, even if gas is still available, unless it has a battery backup or is a non-electric ignition model.

Electric Storage System

Electric storage tanks hold pre-heated water, so if the power goes out, you can still use the hot water stored in the tank for several hours. How long it lasts depends on the tank size and how quickly it’s used, but it generally provides a short-term backup during outages.

Environmental Considerations: How Your System Impacts the Planet

For eco-conscious buyers, the choice between gas and electric comes down to how each system generates energy and what that means for long-term emissions. 

Gas Continuous-Flow System

Gas continuous-flow systems are reliable, but they come with environmental costs. Burning natural gas produces about 2.5 kg of CO₂ per cubic metre, contributing to greenhouse emissions. If you use LPG bottles, the carbon footprint is even higher because extra energy is used to process, transport, and deliver the fuel before it reaches your home.

Electric Storage System

Electric storage systems are more environmentally friendly because they do not burn fuel. If the system draws power from the grid, some emissions can occur because Queensland’s electricity is made from a mix of coal, gas, and renewables. 

However, pairing an electric system with solar panels changes this completely. In Townsville, with over 300 sunny days a year, households can heat most of their water using their own solar electricity, which cuts both emissions and reliance on the grid for much of the year.

Maintenance & Lifespan: What It Takes to Keep Your System Running

Gas units and electric tanks face different stresses, and knowing these differences helps you plan servicing, avoid failures, and get the most life out of your system.

Gas Continuous-Flow System

A quality continuous-flow gas unit lasts 15 to 20 years because it doesn’t store water, so there’s no internal tank that can corrode over time.

These systems rely on combustion, so they need regular servicing: a licensed gas fitter should inspect the burner, ignition, and flue every two years to ensure everything is safe and working properly. 

Electric Storage System

A standard electric storage tank typically lasts 8 to 12 years, mainly because it continuously stores hot water, which puts ongoing stress on its internal components.

The biggest maintenance concern is sediment build-up. Minerals in the water can corrode the tank, so there’s a sacrificial anode rod inside the tank that absorbs minerals from the water and corrodes in place of the steel tank. Once the anode is used up, the tank itself starts to deteriorate, so checking and replacing the rod every 3-5 years is essential to prolong the tank’s life.

Minerals can also build up on the heating element, reducing heat transfer. This forces the element to run longer and hotter, which can eventually cause it to fail or damage the tank lining. Flushing the tank once a year helps remove sediment and maintain efficiency.

The temperature and pressure relief (TPR) valve releases water if the pressure or temperature inside the tank gets too high. The valve should be manually tested every six months. 

At 1touch Plumbing, we also supply, install, and service electric hot water systems across Townsville, so you can enjoy reliable hot water. 

Best Option by Household Type

• Small households & couples (1–2 people): A 125–160 L electric storage tank is sufficient to meet all daily needs. Because your demand is low, the tank recovers quickly overnight, and connecting to Tariff 33 keeps running costs very low, even if you don’t use solar.
  
• Average families (3–4 people): A 250–315 L electric storage tank provides enough water to meet simultaneous household use in the morning and evening. Using Tariff 33 or investing in a few solar panels so the tank can heat during off-peak or daylight hours keeps costs manageable while ensuring enough hot water for everyone.
  
• Large or high-demand households (5+ people): A continuous-flow gas system is best for households with multiple bathrooms or back-to-back hot water needs because water is heated on demand, so there is no supply limit. While LPG or natural gas costs are slightly higher, the guaranteed supply during heavy use often outweighs the expense.

Decision Checklist: How to Choose the Right System

To make your final decision easier, we have made this quick “yes/no” checklist. Review your home’s setup and daily hot water needs, and then answer the questions below to see which system aligns with your infrastructure.

The Go Electric Checklist

If you answer YES to most of the questions, an electric storage system is likely your best match.

• Do you have solar panels installed? Using a solar diverter or timer, your tank can heat water during the day with excess solar energy, which reduces running costs significantly.
  
• Is your home already set up for an electric tank? A like-for-like replacement is faster and cheaper because the plumbing and electrical connections are already in place.
  
• Are you looking for the lowest upfront purchase price? Standard electric tanks cost less to buy than gas systems and require simpler installation.
  
• Do you have access to Ergon Energy’s Tariff 33? This controlled-load rate provides electricity at a cheaper rate, making electric running costs very competitive.
  
• Do you have a suitable installation space? Electric tanks are more flexible; they can fit inside cupboards, laundries, or other compact areas.

The Go Gas Checklist

If you answer YES to most of the questions, a gas continuous-flow system is likely the better choice:

• Does your household have 5 or more people? Gas heats water instantly, providing an endless supply that can handle back-to-back showers and heavy daily demand.
  
• Do you have limited floor space? Wall-mounted gas units are compact, freeing up laundry floors or backyard areas.
  
• Do you have a suitable wall for installation? Gas systems must be installed on a wall with enough distance from windows and doors to prevent fumes from entering the home.

• Is your suburb already connected to natural gas? This avoids the cost and logistics of managing LPG bottle deliveries and refills.
  
• Are your bathrooms located far apart? Smaller gas units can be installed closer to the point of use, reducing wait times for hot water.

Final Thoughts

Choosing a hot water system in Townsville is all about matching the unit to your household’s lifestyle, energy setup, and local conditions.

Think about the practical side too: space, maintenance, and lifespan. There’s no point investing in a gas system if there is no clear space for ventilation. Likewise, an electric tank won’t serve you well if you don’t commit to regular maintenance.

For eco-conscious buyers, electric systems paired with solar can significantly reduce your carbon footprint, while gas may still be the best choice for large families or households that need hot water on demand at any time.

If all this feels overwhelming, don’t worry – our team at 1touch Plumbing can guide you through every step. We’ll assess your home, explain which system fits your household, and help you choose a solution that balances performance, cost, and convenience.

Contact us today for smart, reliable hot water solutions.