Compare water heating running costs

Last updated: 6 September 2022
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This page provides approximate annual energy costs for various types of common water heating system 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.

Annual energy cost in 2022 graph

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 2.3
Peak tariff Standard $125 3.1
Off-peak tariff High efficiency $70 2.3
Off-peak tariff Standard $90 3.1

Solar

Water heater type Energy star rating Annual energy cost 10-year Greenhouse Gas emissions (tonnes)
Natural gas boosted High efficiency $50 1.1
Natural gas boosted Standard $60 1.3
Electric boosted – peak tariff High efficiency $60 1.5
Electric boosted – peak tariff Standard $110 2.7
Electric boosted – off-peak tariff High efficiency $55 1.7
Electric boosted – off-peak tariff Standard $90 3.1
LPG boosted High efficiency $65 1.1
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 8.6
Peak tariff – instant N/A $265 6.6
Off-peak tariff – storage N/A $290 10.1

Gas

Water heater type Energy star rating Annual energy cost 10-year Greenhouse Gas emissions (tonnes)
Natural gas – storage 5.0 $250 5.4
Natural gas – storage 4 $290 6.2
Natural gas – instant 7 $125 2.6
Natural gas – instant 6 $135 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 3.4
Peak tariff Standard $175 4.4
Off-peak tariff High efficiency $100 3.4
Off-peak tariff Standard $125 4.4

Solar

Water heater type Energy star rating Annual energy cost 10-year Greenhouse Gas emissions (tonnes)
Natural gas boosted High efficiency $75 1.7
Natural gas boosted Standard $95 2.1
Electric boosted – peak High efficiency $125 3.1
Electric boosted – peak Standard $190 4.8
Electric boosted – off-peak tariff High efficiency $100 3.5
Electric boosted – off-peak tariff Standard $155 5.4
LPG boosted High efficiency $120 1.8
LPG boosted Standard $160 2.3

Electric

Water heater type Energy star rating Annual energy cost 10-year Greenhouse Gas emissions (tonnes)
Peak tariff – storage N/A $525 13.1
Peak tariff – instant N/A $465 11.7
Off-peak tariff – storage N/A $415 14.4

Gas

Water heater type Energy star rating Annual energy cost 10-year Greenhouse Gas emissions (tonnes)
Natural gas – storage 5 $335 7.1
Natural gas – storage 4 $375 8.0
Natural gas – instant 7 $210 4.5
Natural gas – instant 6 $235 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 4.3
Peak tariff Standard $215 5.4
Off-peak tariff High efficiency $120 4.1
Off-peak tariff Standard $150 5.2

Solar

Water heater type Energy star rating Annual energy cost 10-year Greenhouse Gas emissions (tonnes)
Natural gas boosted High efficiency $100 2.2
Natural gas boosted Standard $125 2.7
Electric boosted – peak tariff High efficiency $185 4.6
Electric boosted – peak tariff Standard $265 6.6
Electric boosted – off-peak tariff High efficiency $150 5.1
Electric boosted – off-peak tariff Standard $210 7.2
LPG boosted High efficiency $170 2.4
LPG boosted Standard $225 3.0

Electric

Water heater type Energy star rating Annual energy cost 10-year Greenhouse Gas emissions (tonnes)
Peak tariff – storage N/A $660 16.6
Peak tariff – instant N/A $620 15.6
Off-peak tariff – storage N/A $505 17.6

Gas

Water heater type Energy star rating Annual energy cost 10-year Greenhouse Gas emissions (tonnes)
Natural gas – storage 5 $395 8.5
Natural gas – storage 4 $440 9.5
Natural gas – instant 7 $275 5.9
Natural gas – instant 6 $310 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 5.2
Peak tariff Standard $255 6.3
Off-peak tariff High efficiency $145 4.9
Off-peak tariff Standard $175 6.1

Solar

Water heater type Energy star rating Annual energy cost 10-year Greenhouse Gas emissions (tonnes)
Natural gas boosted High efficiency $130 2.8
Natural gas boosted Standard $160 3.4
Electric boosted – peak tariff High efficiency $255 6.4
Electric boosted – peak tariff Standard $345 8.6
Electric boosted – off-peak tariff High efficiency $200 6.9
Electric boosted – off-peak tariff Standard $270 9.3
LPG boosted High efficiency $230 3.1
LPG boosted Standard $295 3.8

Electric

Water heater type Energy star rating Annual energy cost 10-year Greenhouse Gas emissions (tonnes)
Peak tariff – storage N/A $795 20.0
Peak tariff – instant N/A $770 19.3
Off-peak tariff – storage N/A $595 20.7

Gas

Water heater type Energy star rating Annual energy cost 10-year Greenhouse Gas emissions (tonnes)
Natural gas – storage 5 $455 9.8
Natural gas – storage 4 $505 10.9
Natural gas – instant 7 $340 7.3
Natural gas – instant 6 $380 8.2
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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