The short answer
The YourHome guide says heat pump and solar hot water systems cost more to buy than other options but can be cheaper to run and have lower greenhouse gas emissions. It says gas hot water systems should be avoided, and that about a quarter of a typical household's energy goes on heating water.
General information read in full from the Australian Government's YourHome guide on 12 November 2026. The page does not show a clear date. Rebates differ by state and change, so check them before you buy.
What the guide says
In its own words, in short:
- Heat pump and solarThey cost more to buy than other options but can be cheaper to run and have lower greenhouse gas emissions. Rebates and incentives may make them cheaper.
- GasGas hot water systems should be avoided. Among gas systems, instantaneous ones generally use less energy and create fewer emissions than gas storage systems.
- Noise and spaceHeat pumps have a fan that can make noise, and an integrated heat pump can be larger than an older electric tank of the same size. Think about where it will sit.
Choosing for your home
The guide says the best choice depends on several factors, including your household size and climate. Ask a licensed plumber to quote two systems, ask what each quote includes and ask which rebates apply in your state.
Common questions
Is a heat pump hot water system worth it?
The government guide says heat pump systems cost more to buy but can be cheaper to run. Your climate and household size matter.
Should I buy a gas hot water system?
The government guide says gas hot water systems should be avoided.
Sources
- YourHome: hot water systems, checked 12 November 2026