If you’re comparing a heat pump to a “normal” hot water system, you’re really deciding between different types of hot water systems:
- Heat pump hot water (an efficient electric tank)
- Standard electric hot water (a traditional electric tank)
- Gas hot water (either a tank, or continuous flow)
The best choice comes down to what matters most in your home: running cost, morning demand (especially two showers at once), available space, and whether you have gas.
| Option | What it feels like day-to-day | Usually best for | What to watch out for |
| Heat pump (storage tank) | A tank that refills hot water steadily over time | Homeowners who want lower power bills and have space outside | Higher upfront cost, needs airflow, can be noisier than a plain tank if placed poorly |
| Standard electric (storage tank) | Simple, familiar, reliable, but uses more electricity | Straightforward replacements and smaller households | Often higher running costs than heat pumps |
| Gas continuous flow | “Endless” hot water as long as it’s sized right | Homes with 2+ bathrooms or frequent back-to-back showers | Must be sized for simultaneous use; gas supply/pipe sizing matters |
| Gas storage (tank) | A tank, but it reheats faster than electric | Families who like a tank buffer and quicker recovery | Still possible to run out during heavy peak times |
The fastest way to choose: Start with your household’s “Hot Water Moments”.
Think about your busiest window (usually mornings):
- Do you ever run two showers at once?
- Do showers overlap with dishwasher or washing machine use?
- Do you have teenagers or people taking long showers?
- Do you run out now, or just want cheaper bills?
That usage pattern is what decides whether you’ll be happiest with a tank, or continuous flow.
If you want strong performance when showers overlap: Rheem 26L instant gas https://australianhotwater.com.au/product/rheem-26-litre-natural-gas-hot-water-system-price-installed/
If you mostly use hot water one shower at a time: Rheem 125L electric tank https://australianhotwater.com.au/product/rheem-125-litre-electric-hot-water-system-price-installed/
Heat pumps: when they’re a great choice (and when they aren’t)
Why homeowners like heat pumps
A heat pump works a bit like an air conditioner in reverse: it pulls heat from the air and uses it to warm the water in a tank. That’s why it can be more efficient than a standard electric tank. You’ll also see heat pumps described with a COP rating (a measure of efficiency).
In a milder coastal climate, heat pumps can do well for most of the year.
When a heat pump is usually a good fit
| If this sounds like you | Heat pump tends to suit because |
| You’re currently on an electric tank and bills feel high | Heat pumps typically use less electricity to heat your water |
| You can place the unit outside with good airflow | Heat pumps need ventilation to work properly |
| You’re happy with “tank style” hot water (not instant) | You’re drawing from stored hot water, then it reheats |
| You have solar or can heat water during the day | You can shift heating to cheaper/sunnier hours |
Family-capable heat pump example: Sanden Eco Plus 315L https://australianhotwater.com.au/product/sanden-eco-plus-315-litre-heat-pump-price/
When a heat pump might not be the best experience
| If this sounds like you | Consider |
| You often run multiple showers at once | Either a larger tank heat pump setup, or gas continuous flow for stronger peak performance |
| You have limited outdoor space or difficult placement | Continuous flow or a standard tank may be simpler |
| You’re sensitive to noise near bedrooms or neighbours | Placement matters – Heat pumps can make noise similar idea to an aircon outdoor unit |
If you regularly run multiple showers at once: Rheem 26L instant gas https://australianhotwater.com.au/product/rheem-26-litre-natural-gas-hot-water-system-price-installed/
Standard Electric Tanks: The “Simple Replacement” Option
If your main goal is to replace a failed system quickly and keep upfront cost lower, a standard electric tank is often the simplest path. It’s straightforward and familiar. The trade-off may be the running cost, especially if your household uses a lot of hot water.
Rheem 125L electric tank https://australianhotwater.com.au/product/rheem-125-litre-electric-hot-water-system-price-installed/
Gas systems: Best when Peak Demand matters most
Gas Hot Water Systems tend to shine when households need strong performance during busy periods.
Gas Continuous Flow (instantaneous)
Continuous flow heats water as you use it (no storage tank).
Homeowners like it because it avoids “running out” (when sized correctly) and saves space.
It’s often a strong option if:
- you have two bathrooms
- you regularly have overlapping showers
- you want consistent temperature under simultaneous demand
Gas storage
Gas storage is a tank, but with faster recovery than most electric tanks. It’s often chosen by families who like having a buffer (tank capacity) but want it to bounce back faster.
Gas continuous flow (instantaneous)
Continuous flow example: Rheem 26L instant gas https://australianhotwater.com.au/product/rheem-26-litre-natural-gas-hot-water-system-price-installed/
Gas storage (tank)
Gas storage example: Rheem 170L gas storage https://australianhotwater.com.au/product/rheem-170-litre-natural-gas-hot-water-system-price-installed/
Sydney-specific note: Incentives and Considerations
If you’re in NSW, there’s a government hot water upgrade incentive that can reduce the upfront cost of switching to a heat pump (the discount amount depends on what you’re replacing and eligibility).
Also, heat pumps fall under residential noise considerations (similar bucket to air conditioners). Placement and operating hours can matter if neighbours are close.
Decision: What should you lean toward?
| Your main priority | Strong starting point | Why |
| Lower running costs (long term) | Heat pump | Efficient way to heat a tank of water |
| Strongest performance for two showers at once | Gas continuous flow (sized properly) | High output during peak demand |
| Lowest upfront cost / easiest replacement | Standard electric tank | Simple, common, quick |
| Family household that likes a tank buffer | Gas storage (or larger heat pump tank) | Faster recovery than electric; tank capacity helps |
Heat pump (lower running costs): Sanden Eco Plus 250L https://australianhotwater.com.au/product/sanden-eco-plus-250-litre-heat-pump-price/
Gas continuous flow (two showers at once): Rheem 26L instant gas https://australianhotwater.com.au/product/rheem-26-litre-natural-gas-hot-water-system-price-installed/
Standard electric tank (lowest upfront replacement): Rheem 125L electric tank https://australianhotwater.com.au/product/rheem-125-litre-electric-hot-water-system-price-installed/
Gas storage (tank buffer + faster recovery): Rheem 170L gas storage https://australianhotwater.com.au/product/rheem-170-litre-natural-gas-hot-water-system-price-installed/
If you want cheaper running costs and you’ve got a suitable outdoor spot, a heat pump is often an excellent choice. If your household regularly has overlapping showers and you want the most reliable peak performance, gas continuous flow is often the most “no fuss” option. If you need a simple, lower-upfront replacement, standard electric storage can still be the practical pick.To compare the hot water system types on Australian Hot Water, check out our tool to help you make a decision. Or, take the guess work out and speak with an expert today.