Compare water heating running costs

Last updated: 31 January 2023
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This page provides approximate annual energy costs for various types of common water heating systems for different household sizes. It also shows the estimated greenhouse gas emissions of the different options over a 10-year period.

This provides a fairer comparison of emissions between systems that use gas and electricity, as over this time the greenhouse intensity of Victoria’s electricity supply will become much lower.

These calculations should be used as a guide only.

Your water heating energy costs will depend on:

  • the number of people in your household
  • how you use hot water
  • your energy tariffs
  • your climate
  • how efficient the system is
  • the length and insulation of connecting pipes
  • the flow rates (water efficiency) of taps and showers.

Annual energy cost in 2023 graph

graph of annual energy costs

Water heating running costs update

Figures have been updated to reflect the gas price increases as of 1 Feb 2023. Prices of electricity and other fuels remain the same. We expect the electricity price to also rise in mid-2023. The 10-year emission coefficient for electricity has been updated (it has gone down a bit), based on the emission coefficient data released in 2022.

1 person (50 litres per day)

Heat pump

Water heater type Energy star rating Annual energy cost 10-year Greenhouse Gas emissions (tonnes)
Peak tariff High efficiency $90 1.8
Peak tariff Standard $125 2.5
Off-peak tariff High efficiency $70 1.9
Off-peak tariff Standard $90 2.6

Solar

Water heater type Energy star rating Annual energy cost 10-year Greenhouse Gas emissions (tonnes)
Natural gas boosted High efficiency $55 1.0
Natural gas boosted Standard $70 1.2
Electric boosted – peak tariff High efficiency $60 1.2
Electric boosted – peak tariff Standard $110 2.2
Electric boosted – off-peak tariff High efficiency $55 1.4
Electric boosted – off-peak tariff Standard $90 2.6
LPG boosted High efficiency $65 1.0
LPG boosted Standard $90 1.4

Electric

Water heater type Energy star rating Annual energy cost 10-year Greenhouse Gas emissions (tonnes)
Peak tariff – storage N/A $340 7.0
Peak tariff – instant N/A $265 5.4
Off-peak tariff – storage N/A $290 8.3

Gas

Water heater type Energy star rating Annual energy cost 10-year Greenhouse Gas emissions (tonnes)
Natural gas – storage 5.0 $315 5.4
Natural gas – storage 4 $365 6.2
Natural gas – instant 7 $155 2.6
Natural gas – instant 6 $175 2.9
LPG – storage 5 $535 6.2
LPG – storage 4 $615 7.1
LPG – instant 7 $250 3.0
LPG – instant 6 $280 3.3

2 people (90 litres per day)

Heat pump

Water heater type Energy star rating Annual energy cost 10-year Greenhouse Gas emissions (tonnes)
Peak tariff High efficiency $135 2.8
Peak tariff Standard $175 3.6
Off-peak tariff High efficiency $100 2.7
Off-peak tariff Standard $125 3.6

Solar

Water heater type Energy star rating Annual energy cost 10-year Greenhouse Gas emissions (tonnes)
Natural gas boosted High efficiency $85 1.5
Natural gas boosted Standard $115 1.9
Electric boosted – peak High efficiency $125 2.5
Electric boosted – peak Standard $190 3.9
Electric boosted – off-peak tariff High efficiency $100 2.8
Electric boosted – off-peak tariff Standard $155 4.4
LPG boosted High efficiency $120 1.7
LPG boosted Standard $160 2.1

Electric

Water heater type Energy star rating Annual energy cost 10-year Greenhouse Gas emissions (tonnes)
Peak tariff – storage N/A $525 10.8
Peak tariff – instant N/A $465 9.6
Off-peak tariff – storage N/A $415 11.8

Gas

Water heater type Energy star rating Annual energy cost 10-year Greenhouse Gas emissions (tonnes)
Natural gas – storage 5 $420 7.1
Natural gas – storage 4 $470 8.0
Natural gas – instant 7 $270 4.5
Natural gas – instant 6 $300 5.0
LPG – storage 5 $710 8.2
LPG – storage 4 $800 9.3
LPG – instant 7 $440 5.2
LPG – instant 6 $490 5.8

3 people (120 litres per day)

Heat pump

Water heater type Energy star rating Annual energy cost 10-year Greenhouse Gas emissions (tonnes)
Peak tariff High efficiency $170 3.5
Peak tariff Standard $215 4.4
Off-peak tariff High efficiency $120 3.4
Off-peak tariff Standard $150 4.3

Solar

Water heater type Energy star rating Annual energy cost 10-year Greenhouse Gas emissions (tonnes)
Natural gas boosted High efficiency $120 2.0
Natural gas boosted Standard $150 2.6
Electric boosted – peak tariff High efficiency $185 3.8
Electric boosted – peak tariff Standard $265 5.4
Electric boosted – off-peak tariff High efficiency $150 4.1
Electric boosted – off-peak tariff Standard $210 5.9
LPG boosted High efficiency $170 2.3
LPG boosted Standard $225 2.9

Electric

Water heater type Energy star rating Annual energy cost 10-year Greenhouse Gas emissions (tonnes)
Peak tariff – storage N/A $660 13.5
Peak tariff – instant N/A $620 12.7
Off-peak tariff – storage N/A $505 14.4

Gas

Water heater type Energy star rating Annual energy cost 10-year Greenhouse Gas emissions (tonnes)
Natural gas – storage 5 $495 8.5
Natural gas – storage 4 $555 9.5
Natural gas – instant 7 $355 5.9
Natural gas – instant 6 $485 6.6
LPG – storage 5 $840 9.8
LPG – storage 4 $940 10.9
LPG – instant 7 $580 6.8
LPG – instant 6 $645 7.6

4 people (150 litres per day)

Heat pump

Water heater type Energy star rating Annual energy cost 10-year Greenhouse Gas emissions (tonnes)
Peak tariff High efficiency $205 4.2
Peak tariff Standard $255 5.2
Off-peak tariff High efficiency $145 4.0
Off-peak tariff Standard $175 5.0

Solar

Water heater type Energy star rating Annual energy cost 10-year Greenhouse Gas emissions (tonnes)
Natural gas boosted High efficiency $155 2.7
Natural gas boosted Standard $195 3.3
Electric boosted – peak tariff High efficiency $255 5.2
Electric boosted – peak tariff Standard $345 7.1
Electric boosted – off-peak tariff High efficiency $200 5.6
Electric boosted – off-peak tariff Standard $270 7.6
LPG boosted High efficiency $230 3.0
LPG boosted Standard $295 3.7

Electric

Water heater type Energy star rating Annual energy cost 10-year Greenhouse Gas emissions (tonnes)
Peak tariff – storage N/A $795 16.3
Peak tariff – instant N/A $770 15.8
Off-peak tariff – storage N/A $595 17.0

Gas

Water heater type Energy star rating Annual energy cost 10-year Greenhouse Gas emissions (tonnes)
Natural gas – storage 5 $575 9.8
Natural gas – storage 4 $635 10.9
Natural gas – instant 7 $435 7.3
Natural gas – instant 6 $485 8.1
LPG – storage 5 $970 11.3
LPG – storage 4 $1,080 12.6
LPG – instant 7 $715 8.4
LPG – instant 6 $795 9.4

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