Compare water heating running costs
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
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Annual energy costs are based on a Melbourne household with the stated number of people.
For gas instantaneous and gas boosted solar water heaters the running costs and greenhouse emissions take the electricity use into account.
Electricity tariffs are based on a general (or peak) rate of 22.88 c/kWh, and an off-peak rate of 16.54 c/kWh. Natural gas tariffs are based on the default offer of a major gas retailer using a typical "declining block" structure for a house with gas heating, water heating and cooking, which means 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: 2.58 c/MJ (1 and 2 person household); 2.52 c/MJ (3 and 4 person household). For solar-natural gas boost, a tariff of 2.67 c/MJ has been used. LPG tariff is based on bulk supply in Melbourne area.
Energy tariffs do not include the annual supply charge or cylinder rental fee. Annual costs for your household will depend on your actual energy tariffs and 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) in 2015: solar gas boost - standard (29), high efficiency (33); electric boosted solar - standard (27), high efficiency (31); heat pump - standard (28), high efficiency (35).
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 |
