Compare water heating running costs
This page provides approximate annual energy costs and greenhouse gas emissions 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.
1 person (60 litres per day)
Gas
| Water heater type | Energy star rating | Annual energy cost | Greenhouse Gas emissions 2020 (kg/year) | 10 year Greenhouse Gas emissions (tonnes) |
|---|---|---|---|---|
| Natural gas – storage | 5.3 | $165 | 540 | 5.4 |
| Natural gas – storage | 4 | $190 | 630 | 6.3 |
| Natural gas – instant | 7 | $115 | 375 | 3.5 |
| Natural gas – instant | 6 | $120 | 405 | 3.8 |
| LPG – storage | 5.3 | $390 | 635 | 6.3 |
| LPG – storage | 4 | $455 | 735 | 7.3 |
| LPG – instant | 7 | $245 | 425 | 4.0 |
| LPG – instant | 6 | $265 | 465 | 4.4 |
Electric
| Water heater type | Energy star rating | Annual energy cost | Greenhouse Gas emissions 2020 (kg/year) | 10 year Greenhouse Gas emissions (tonnes) |
|---|---|---|---|---|
| Peak tariff – storage | N/A | $460 | 1,730 | 10.4 |
| Peak tariff – instant | N/A | $325 | 1,230 | 7.4 |
| Off-peak tariff – storage | N/A | $390 | 2,160 | 13.0 |
Solar
| Water heater type | Energy star rating | Annual energy cost | Greenhouse Gas emissions 2020 (kg/year) | 10 year Greenhouse Gas emissions (tonnes) |
|---|---|---|---|---|
| Natural gas boosted | High efficiency | $25 | 85 | 0.7 |
| Natural gas boosted | Standard | $30 | 105 | 0.8 |
| Electric boosted – peak tariff | High efficiency | $95 | 345 | 2.1 |
| Electric boosted – peak tariff | Standard | $150 | 570 | 3.4 |
| Electric boosted – off-peak tariff | High efficiency | $70 | 390 | 2.3 |
| Electric boosted – off-peak tariff | Standard | $115 | 635 | 3.8 |
| LPG boosted | High efficiency | $40 | 95 | 0.7 |
| LPG boosted | Standard | $55 | 115 | 0.9 |
Heat pump
| Water heater type | Energy star rating | Annual energy cost | Greenhouse Gas emissions 2020 (kg/year) | 10 year Greenhouse Gas emissions (tonnes) |
|---|---|---|---|---|
| Peak tariff | High efficiency | $125 | 460 | 2.8 |
| Peak tariff | Standard | $195 | 725 | 4.4 |
| Off-peak tariff | High efficiency | $85 | 460 | 2.8 |
| Off-peak tariff | Standard | $135 | 725 | 4.4 |
2 people (90 litres per day)
Gas
| Water heater type | Energy star rating | Annual energy cost | Greenhouse Gas emissions 2020 (kg/year) | 10 year Greenhouse Gas emissions (tonnes) |
|---|---|---|---|---|
| Natural gas – storage | 5.3 | $205 | 675 | 6.7 |
| Natural gas – storage | 4 | $235 | 775 | 7.7 |
| Natural gas – instant | 7 | $160 | 530 | 5.1 |
| Natural gas – instant | 6 | $175 | 580 | 5.5 |
| LPG – storage | 5.3 | $485 | 790 | 7.9 |
| LPG – storage | 4 | $560 | 905 | 9.0 |
| LPG – instant | 7 | $355 | 610 | 5.9 |
| LPG – instant | 6 | $390 | 665 | 6.4 |
Electric
| Water heater type | Energy star rating | Annual energy cost | Greenhouse Gas emissions 2020 (kg/year) | 10 year Greenhouse Gas emissions (tonnes) |
|---|---|---|---|---|
| Peak tariff – storage | N/A | $615 | 2,315 | 13.9 |
| Peak tariff – instant | N/A | $485 | 1,835 | 11.0 |
| Off-peak tariff – storage | N/A | $500 | 2,745 | 16.5 |
Solar
| Water heater type | Energy star rating | Annual energy cost | Greenhouse Gas emissions 2020 (kg/year) | 10 year Greenhouse Gas emissions (tonnes) |
|---|---|---|---|---|
| Natural gas boosted | High efficiency | $35 | 120 | 1.0 |
| Natural gas boosted | Standard | $45 | 150 | 1.3 |
| Electric boosted – peak | High efficiency | $150 | 560 | 3.4 |
| Electric boosted – peak | Standard | $225 | 840 | 5.0 |
| Electric boosted – off-peak tariff | High efficiency | $115 | 620 | 3.7 |
| Electric boosted – off-peak tariff | Standard | $170 | 930 | 5.6 |
| LPG boosted | High efficiency | $65 | 130 | 1.1 |
| LPG boosted | Standard | $90 | 170 | 1.5 |
Heat pump
| Water heater type | Energy star rating | Annual energy cost | Greenhouse Gas emissions 2020 (kg/year) | 10 year Greenhouse Gas emissions (tonnes) |
|---|---|---|---|---|
| Peak tariff | High efficiency | $160 | 610 | 3.6 |
| Peak tariff | Standard | $255 | 960 | 5.8 |
| Off-peak tariff | High efficiency | $110 | 605 | 3.6 |
| Off-peak tariff | Standard | $175 | 955 | 5.8 |
3 people (120 litres per day)
Gas
| Water heater type | Energy star rating | Annual energy cost | Greenhouse Gas emissions 2020 (kg/year) | 10 year Greenhouse Gas emissions (tonnes) |
|---|---|---|---|---|
| Natural gas – storage | 5.3 | $245 | 805 | 8.0 |
| Natural gas – storage | 4 | $280 | 915 | 9.1 |
| Natural gas – instant | 7 | $210 | 690 | 6.6 |
| Natural gas – instant | 6 | $225 | 755 | 7.3 |
| LPG – storage | 5.3 | $580 | 940 | 9.4 |
| LPG – storage | 4 | $660 | 1070 | 10.7 |
| LPG – instant | 7 | $470 | 795 | 7.7 |
| LPG – instant | 6 | $515 | 870 | 8.4 |
Electric
| Water heater type | Energy star rating | Annual energy cost | Greenhouse Gas emissions 2020 (kg/year) | 10 year Greenhouse Gas emissions (tonnes) |
|---|---|---|---|---|
| Peak tariff – storage | N/A | $765 | 2,900 | 17.5 |
| Peak tariff – instant | N/A | $645 | 2,440 | 14.7 |
| Off-peak tariff – storage | N/A | $605 | 3,330 | 20.0 |
Solar
| Water heater type | Energy star rating | Annual energy cost | Greenhouse Gas emissions 2020 (kg/year) | 10 year Greenhouse Gas emissions (tonnes) |
|---|---|---|---|---|
| Natural gas boosted | High efficiency | $50 | 160 | 1.4 |
| Natural gas boosted | Standard | $65 | 210 | 1.9 |
| Electric boosted – peak tariff | High efficiency | $215 | 810 | 4.9 |
| Electric boosted – peak tariff | Standard | $305 | 1,145 | 6.9 |
| Electric boosted – off-peak tariff | High efficiency | $165 | 885 | 5.3 |
| Electric boosted – off-peak tariff | Standard | $230 | 1,255 | 7.5 |
| LPG boosted | High efficiency | $95 | 180 | 1.6 |
| LPG boosted | Standard | $130 | 235 | 2.1 |
Heat pump
| Water heater type | Energy star rating | Annual energy cost | Greenhouse Gas emissions 2020 (kg/year) | 10 year Greenhouse Gas emissions (tonnes) |
|---|---|---|---|---|
| Peak tariff | High efficiency | $200 | 755 | 4.5 |
| Peak tariff | Standard | $320 | 1,200 | 7.2 |
| Off-peak tariff | High efficiency | $135 | 750 | 4.5 |
| Off-peak tariff | Standard | $215 | 1,185 | 7.1 |
4 people (150 litres per day)
Gas
| Water heater type | Energy star rating | Annual energy cost | Greenhouse Gas emissions 2020 (kg/year) | 10 year Greenhouse Gas emissions (tonnes) |
|---|---|---|---|---|
| Natural gas – storage | 5.3 | $285 | 935 | 9.3 |
| Natural gas – storage | 4 | $320 | 1,060 | 10.6 |
| Natural gas – instant | 7 | $255 | 850 | 8.2 |
| Natural gas – instant | 6 | $280 | 925 | 9.0 |
| LPG – storage | 5.3 | $675 | 1,095 | 10.9 |
| LPG – storage | 4 | $765 | 1,240 | 12.4 |
| LPG – instant | 7 | $580 | 980 | 9.5 |
| LPG – instant | 6 | $640 | 1,075 | 10.4 |
Electric
| Water heater type | Energy star rating | Annual energy cost | Greenhouse Gas emissions 2020 (kg/year) | 10 year Greenhouse Gas emissions (tonnes) |
|---|---|---|---|---|
| Peak tariff – storage | N/A | $920 | 3,485 | 21.0 |
| Peak tariff – instant | N/A | $805 | 3,045 | 18.3 |
| Off-peak tariff – storage | N/A | $710 | 3,915 | 23.6 |
Solar
| Water heater type | Energy star rating | Annual energy cost | Greenhouse Gas emissions 2020 (kg/year) | 10 year Greenhouse Gas emissions (tonnes) |
|---|---|---|---|---|
| Natural gas boosted | High efficiency | $65 | 210 | 1.9 |
| Natural gas boosted | Standard | $85 | 280 | 2.5 |
| Electric boosted – peak tariff | High efficiency | $290 | 1,095 | 6.6 |
| Electric boosted – peak tariff | Standard | $395 | 1,480 | 8.9 |
| Electric boosted – off-peak tariff | High efficiency | $215 | 1,190 | 7.1 |
| Electric boosted – off-peak tariff | Standard | $290 | 1,605 | 9.6 |
| LPG boosted | High efficiency | $130 | 235 | 2.1 |
| LPG boosted | Standard | $175 | 315 | 2.9 |
Heat pump
| Water heater type | Energy star rating | Annual energy cost | Greenhouse Gas emissions 2020 (kg/year) | 10 year Greenhouse Gas emissions (tonnes) |
|---|---|---|---|---|
| Peak tariff | High efficiency | $240 | 910 | 5.5 |
| Peak tariff | Standard | $380 | 1,435 | 8.6 |
| Off-peak tariff | High efficiency | $160 | 885 | 5.3 |
| Off-peak tariff | Standard | $255 | 1,400 | 8.4 |
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Annual energy costs are based on a Melbourne household with the stated average daily hot water use.
Running costs for gas instantaneous and gas boosted solar water heaters take the electricity use into account.
Electricity tariffs are based on a general (or peak) rate of 26.16c/kWh, and an off-peak rate of 17.93c/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:
- 1.68c/MJ (1 and 2 person household)
- 1.65c/MJ (3 and 4 person household).
For solar-natural gas boost, a tariff of 1.74c/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 many factors, including but not limited to the:
- frequency and length of showers
- flow rate of the shower rose and shower temperature
- use of hot water in clothes washing
- use of hot water for dishwashing and bathing.
Solar and heat pump water heaters efficiency levels are based on the following STC allocations in Zone 4 (southern Victoria) in 2015 (STC allocation is now decreasing each year to 2030):
- solar gas boosted – standard (29) and high efficiency (33)
- electric boosted solar – standard (27) and high efficiency (31)
- heat pump – standard (28) and high efficiency (35).
For the greenhouse gas emissions, we provided an annual figure for 2020 and a ‘lifetime’ figure based on a 10-year period from 2020.
The running cost figures assume that the house does not have a rooftop PV system to generate electricity.