Understanding The Cost of a Hot Water System Installation

Understanding The Cost of a Hot Water System Installation

A home’s standard water heating costs make up around one-quarter of your household energy, yet most people don’t factor ongoing costs when choosing a new hot water unit.

If your hot water system is not the right one for your home you can see high energy bills, find you run out of hot water when you need it most and need to replace parts or even the unit itself more frequently.

It's worth reviewing your hot water choices thoroughly before you make your next purchase to see what the big picture costs are for your wallet and the environment.

Factors affecting cost

When it comes to choosing a hot water heater for a home or business, price is a big deciding point, however, it’s also a sticking point because different costs come into the equation on so many different levels:

The initial purchase - Initial prices will be influenced by;
  • Type of hot water system you choose
  • Tank capacity
  • Brand
Delivery and removal fees
Ongoing costs

People are typically more inclined to choose cheaper units initially and save some money, but when you take into account the ongoing costs, it can actually be a bigger saving to go for an expensive green energy option that gives back over time.

The below shows an estimate (based on a medium-sized home in Victoria) of costs and annual energy prices for using 120 litres a day.

Type of Water Heater: Electric
Initial cost: $400 - $1,800
Annual running cost: $700 (off-peak tariff) / $780 – $925 (day rate)

Type of Water Heater: Gas
Initial cost: $700 - $1,800
Annual running cost: $295 – $665

Type of Water Heater: Heat Pump
Initial cost: $2,000 - $4,000
Annual running cost: $160 – $385

Type of Water Heater: Solar
Initial cost: $4,000 - $8,000
Annual running cost: $65 – $365

The prices in the table do not include installation. More complex installation work, like tankless or solar heating, as well as switching from your original heating power source to a new one, can come with increased costs.

Talk to your plumber about costs for Hot water installation and repairs.

It’s worth noting that while greener energy options are more expensive, you can see genuine savings in overall running costs over the next 15 years. You can also see if any government rebates apply to assist with the purchase costs.

Approximate installation costs

It’s best to ask for advice from a qualified plumber about your installation requirements to determine the price. Because there are so many variations between hot water unit types and brands and even more variation between individual properties and their existing hot water setups, there is not one “installation price”, rather plumbing work is charged by the hour from $220 - $660 the lowest bracket for straightforward jobs with good access and a simple swap of the old unit to an identical new one. More complex jobs that require a lot of changes and extra additions may cost $1,500 to $3,000.

If you need new parts these can be expensive. In 2012 new laws were introduced that every hot water system must have an anti-scald device. If you do not currently have one it will cost around $190 to $250 for this to be added.

In order to meet plumbing codes, safety regulations and the warranty requirements for your system you will need to hire a qualified plumber to complete your installation.

While buying a new hot water heater for your property might seem like an overwhelming expense, it’s important to consider that the unit you purchase today will most likely still be working for you in ten years or even 15 years' time.