Calculate water heating running costs

Last updated: 18 February 2021


The table below provides the approximate annual energy costs for various types of water heating systems, for different household sizes.

1 person (60 litres per day)

Gas

Water heater type Energy star rating Annual energy cost Annual Greenhouse Gas (GHG) emissions (kg)
Natural gas – storage 5.5 $230 515
Natural gas – storage 4 $285 635
Natural gas – instant 7 $160 380
Natural gas – instant 5.5 $180 425
LPG – storage 5.5 $370 605
LPG – storage 4 $460 745
LPG – instant 7 $240 430
LPG – instant 5.5 $275 490

Electric

Water heater type Energy star rating Annual energy cost Annual Greenhouse Gas (GHG) emissions (kg)
Peak tariff – storage N/A $555 2040
Peak tariff – instant N/A $395 1450
Off-peak tariff – storage N/A $455 2555

Solar

Water heater type Energy star rating Annual energy cost Annual Greenhouse Gas (GHG) emissions (kg)
Natural gas boosted High efficiency $35 95
Natural gas boosted Standard $40 110
LPG boosted High efficiency $45 100
LPG boosted Standard $55 120
Electric boosted – peak tariff High efficiency $110 410
Electric boosted – peak tariff Standard $185 670
Electric boosted – off-peak tariff High efficiency $85 455
Electric boosted – off-peak tariff Standard $135 750

Heat pump

Water heater type Energy star rating Annual energy cost Annual Greenhouse Gas (GHG) emissions (kg)
Peak tariff High efficiency $150 545
Peak tariff Standard $235 860
Off-peak tariff High efficiency $100 545
Off-peak tariff Standard $155 860

2 people (90 litres per day)

Gas

Water heater type Energy star rating Annual energy cost Annual Greenhouse Gas (GHG) emissions (kg)
Natural gas – storage 5.5 $290 645
Natural gas – storage 4 $350 775
Natural gas – instant 7 $230 535
Natural gas – instant 5.5 $260 605
LPG – storage 5.5 $465 755
LPG – storage 4 $560 910
LPG – instant 7 $355 615
LPG – instant 5.5 $405 700

Electric

Water heater type Energy star rating Annual energy cost Annual Greenhouse Gas (GHG) emissions (kg)
Peak tariff – storage N/A $740 2730
Peak tariff – instant N/A $585 2160
Off-peak tariff – storage N/A $575 3245

Solar

Water heater type Energy star rating Annual energy cost Annual Greenhouse Gas (GHG) emissions (kg)
Natural gas boosted High efficiency $45 125
Natural gas boosted Standard $60 160
LPG boosted High efficiency $65 140
LPG boosted Standard $90 175
Electric boosted – peak High efficiency 655
Electric boosted – peak Standard $270 990
Electric boosted – off-peak tariff High efficiency $130 730
Electric boosted – off-peak tariff Standard $195 1095

Heat pump

Water heater type Energy star rating Annual energy cost Annual Greenhouse Gas (GHG) emissions (kg)
Peak tariff High efficiency $195 720
Peak tariff Standard $310 1135
Off-peak tariff High efficiency $130 715
Off-peak tariff Standard $200 1130

3 people (120 litres per day)

Gas

Water heater type Energy star rating Annual energy cost Annual Greenhouse Gas (GHG) emissions (kg)
Natural gas – storage 5.5 $350 775
Natural gas – storage 4 $415 915
Natural gas – instant 7 $295 690
Natural gas – instant 5.5 $340 785
LPG – storage 5.5 $560 910
LPG – storage 4 $665 1075
LPG – instant 7 $465 795
LPG – instant 5.5 $535 905

Electric

Water heater type Energy star rating Annual energy cost Annual Greenhouse Gas (GHG) emissions (kg)
Peak tariff – storage N/A $925 3420
Peak tariff – instant N/A $780 2875
Off-peak tariff – storage N/A $700 3935

Solar

Water heater type Energy star rating Annual energy cost Annual Greenhouse Gas (GHG) emissions (kg)
Natural gas boosted High efficiency $65 165
Natural gas boosted Standard $85 215
LPG boosted High efficiency $95 185
LPG boosted Standard $130 240
Electric boosted – peak tariff High efficiency $260 950
Electric boosted – peak tariff Standard $365 1345
Electric boosted – off-peak tariff High efficiency $185 1040
Electric boosted – off-peak tariff Standard $265 1475

Heat pump

Water heater type Energy star rating Annual energy cost Annual Greenhouse Gas (GHG) emissions (kg)
Peak tariff High efficiency $245 895
Peak tariff Standard $385 1415
Off-peak tariff High efficiency $160 885
Off-peak tariff Standard $250 1395

4 people (150 litres per day)

Gas

Water heater type Energy star rating Annual energy cost Annual Greenhouse Gas (GHG) emissions (kg)
Natural gas – storage 5.5 $410 905
Natural gas – storage 4 $475 1055
Natural gas – instant 7 $365 845
Natural gas – instant 5.5 $420 965
LPG – storage 5.5 $655 1060
LPG – storage 4 $765 1240
LPG – instant 7 $575 975
LPG – instant 5.5 $660 1115

Electric

Water heater type Energy star rating Annual energy cost Annual Greenhouse Gas (GHG) emissions (kg)
Peak tariff – storage N/A $1115 4110
Peak tariff – instant N/A $970 3585
Off-peak tariff – storage N/A $820 4625

Solar

Water heater type Energy star rating Annual energy cost Annual Greenhouse Gas (GHG) emissions (kg)
Natural gas boosted High efficiency $85 215
Natural gas boosted Standard $110 285
LPG boosted High efficiency $130 245
LPG boosted Standard $175 320
Electric boosted – peak tariff High efficiency $350 1285
Electric boosted – peak tariff Standard $470 1740
Electric boosted – off-peak tariff High efficiency $250 1395
Electric boosted – off-peak tariff Standard $335 1885

Heat pump

Water heater type Energy star rating Annual energy cost Annual Greenhouse Gas (GHG) emissions (kg)
Peak tariff High efficiency $290 1070
Peak tariff Standard $460 1695
Off-peak tariff High efficiency $185 1045
Off-peak tariff Standard $295 1655
  • Annual energy costs are based on a Melbourne household with the stated average daily hot water use. For gas instantaneous and gas boosted solar water heaters the running costs take the electricity use into account. Electricity tariffs are based on a general (or peak) rate of 31.9c/kWh, and an off-peak rate of 20.9c/kWh. Natural gas tariffs are based on a typical declining block structure for a house with gas heating, water heating and cooking, which means that the more gas that is used during each billing period, the cheaper the unit cost. Natural gas tariffs used for gas storage and instantaneous water heaters: 2.49c/MJ (1 and 2 person household); 2.46c/MJ (3 and 4 person household). For solar-natural gas boost, a tariff of 2.36c/MJ has been used. LPG tariff is based on bulk supply (210kg cylinder) in Melbourne area: $1 per litre or 4.0c/MJ. Energy tariffs do not include any on-time payment discount, and do not include the annual supply charge or cylinder rental fee. Annual costs for your household will depend on your daily hot water use. This will depend on the frequency and length of showers, the flow rate of the shower rose and shower temperature, use of hot water in clothes washing, and use of hot water for dishwashing and bathing, etc.
  • Solar and heat pump water heaters efficiency levels are based on the following STC allocations in Zone 4 (southern Victoria): solar gas boosted – standard (29), high efficiency (33); electric boosted solar – standard (27), high efficiency (31); heat pump – standard (28), high efficiency (35).