Storage electric is the simplest hot water system — but it's also the most expensive to run. We'll spec one if it suits, or steer you toward heat pump or solar instead.
An electric hot water system heats stored water with a resistance element, making it the cheapest system to install but the most expensive to run: a 250 L electric storage tank uses around 4,500–5,500 kWh a year. It still suits holiday homes, one- or two-person households and sites with no gas or space for a heat pump. AHHAC installs and replaces electric units across Sydney, Melbourne and Brisbane, and will tell you honestly when a heat pump pays back faster.
Reviewed by the AHHAC Technical Team — licensed plumbers & hydronic engineers, NSW Lic 262528C.How we write & review
Electric storage is the cheapest to install and the most expensive to run — by a clear margin. A 250L electric storage system uses 4,500–5,500 kWh/year (~$1,500/yr at 30c/kWh).
It still has its place: holiday homes, very small households, or where there's no gas and no roof for solar.
An electric hot water system is the simplest system we install, but how it is sized and wired to your tariff decides whether it costs a little or a lot to run. If you are keeping electric storage, for a granny flat, a holiday house or a small household with no gas, these are the settings that matter.
Match the tank to the tariff. On a controlled-load off-peak circuit the element only heats overnight, so the tank has to hold a whole day's hot water, which usually means going a size up. On a continuous tariff the element can reheat during the day, so a smaller tank is often enough, but every kilowatt-hour costs more. With rooftop solar, a timer or diverter that runs the element in the middle of the day turns surplus generation into hot water instead of exporting it for a small feed-in credit.
When does electric stop making sense? A family of four on a continuous tariff with mains gas available is usually better off with gas continuous-flow. And almost any household with a ventilated outdoor spot will spend far less with a heat pump, which runs at a COP of 3.5–4.5 against the 1.0 of an element. Our hot water heat pumps page explains the swap, and solar and heat pump hot water compares the renewable options. For tank capacities and linings, see our hot water tanks.
Written from on-site experience by the AHHAC Technical Team.
AHHAC's in-house design and service team — licensed plumbers and hydronic engineers (Lic 262528C) who have designed and installed 2,400+ hydronic heating, cooling and hot water systems across Australia since 1998.
Every plumbing and hot water job is assessed on site, carried out by our own licensed plumbers and gasfitters to AS/NZS 3500 (plumbing) and AS/NZS 5601 (gas), pressure-tested and documented, and backed by ongoing service. Nothing is subcontracted out.
Direct electric resistance heating has a COP of 1.0 — every unit of electricity becomes one unit of heat. Compare to a heat pump (COP 3.5–4.5) which produces 3–4× the heat for the same electricity. A typical 250L electric storage unit costs $1,300–$1,700/year vs $400–$500 for a heat pump.
Holiday homes (used rarely, low total energy), very small households (1–2 people, low hot water use), or homes with no gas access AND no roof space for solar/heat pump. Otherwise, almost always specify a heat pump instead.
Yes — electric storage is the only system that pairs cleanly with off-peak (controlled load) tariffs. Off-peak typically saves 30–40% on running costs vs anytime electric tariffs. Check with your electricity retailer for available off-peak plans.
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