Budgeting for a Hot Water System: How to Estimate Installation and Running Costs

Budgeting for a Hot Water System: How to Estimate Installation and Running Costs

With so much variation in hot water systems in the market, how do you choose the right one for your home? And if your system fails suddenly, how do you get a replacement without breaking the bank?

This guide answers all your questions about budgeting for a hot water system, using current estimates and tips to save on costs.

What Determines Hot Water System Costs?
Your hot water system costs depend on the type of system, water tank capacity, and your household needs and lifestyle.
  • Type of Hot Water System
The main hot water system types are electric, gas, heat pump, and solar, each with a different price tag depending on size and brand. Electric systems are often cheaper, costing between $450 and $1,900; solar water heaters, while highly recommended for energy efficiency, are the most expensive to install.

These cost between $3,600 to $4,800, with an extra $1,000-$2,000 for a split system, connecting your solar heater to gas or electric as a backup.
  • Water Tank Capacity
Hot water systems typically start from 25L up to 400L, so there's one for every type and size of household. As a start, estimate that each person uses about 50L of water per day, then add other factors like:
  • Full-time residents versus visitors, e.g., friends and relatives staying over
  • Number of showers in the house: One shower is more effective heating-wise than multiple showers running simultaneously
  • Appliances: Know your dishwashing and laundry cycles to determine hot water use.
To illustrate, a household with one to three people can comfortably use an 80L to 125L tank. A large family with eight people may need 250L to 400L.
  • Household Needs and Lifestyle
Your current water heating system may be inefficient if your family grows, your work schedule changes, or you need to manage certain illnesses. For example, hot showers or baths can ease health conditions like arthritis.

Switching from a school to a work schedule also means adjusting your water usage. So, instead of installing a new version of the system you found in your house, consider your unique household needs and choose the most efficient option.

What Determines Installation Costs?
Delivery, complexity, and water tank disposal are the main factors influencing your hot water installation costs.
  • Delivery: You'll pay more to cover a longer distance from your vendor to your home and extra for a larger heater that needs multiple installers to handle safely.
  • Complexity: You'll pay less for a type-for-type swap-out ($260-$690) compared to upgrading from electric to solar ($1,500-$3,000) or moving your system from one location in the house to another ($$1,100-$2,100).
  • Disposal: Since old water heaters require safe removal, installers often charge for this service ($60-$80) to take it to a certified scrap metal centre for recycling.
When it comes to home water heating, the right system means you always have hot water and keep your energy bills low. Call a plumber to find out what system is best for you based on your location, household needs, and available government rebates to save money today.