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Water Heating

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Water heating is a significant user of energy. In fact, water heating accounts for the second largest segment of household energy use, after space heating and cooling. More than half of all hot water use is in the bathroom, a third in the laundry and the remainder in the kitchen. Heating water for these activities comprises approximately 25 per cent of household energy use in Australia.

Selecting the right system can have big benefits in terms of household energy costs and meeting household hot water needs – one of life’s essentials. Find out about the types of water heaters you can choose.

We have a downloadable factsheet on water heating electricity costs and tariffs, as well as a factsheet on what to consider when choosing a new hot water system.

For in depth information about a particular type of technology, look at our product profiles under our key documents.

Still can’t find what you need? Read our water heating frequently asked questions.

Hot water technologies regulated for energy efficiency

Electric Storage Water Heaters, Gas Storage Water Heaters and Gas instantaneous water heaters must meet Minimum Energy Performance (MEPS) requirements under GEMS. To find out more about MEPS for water heaters check the relevant Australian GEMS determination or the New Zealand regulations (link is external).

Energy efficiency performance requirements are not in place for solar water heaters, heat pump water heaters or electric instantaneous water heaters.

GEMs regulations do not require water heaters sold in Australia to display an Energy Rating Label. The energy label found on gas water heaters is not overseen or administered by the E3 program.

Current Work

The E3 Program regulates hot water heaters for Minimum Energy Performance standards and compliance against those standards.  The program also fosters improved energy efficiency through consumer information, industry capacity building and innovation support.

Guiding objectives for the E3 Hot Water work program are:

  • Develop a unified and comprehensive approach to energy efficiency across hot water technologies
  • Fair, technically sound, and even handed regulation across hot water technologies
  • Provision of reliable and comparable information for consumers and industry
  • Allow meaningful comparisons of energy efficiency across hot water technologies.

Find out more about our current work and how you can contribute your views.

Types of water heaters

What are the available technologies in Australia?

If you are building a new house or replacing an existing hot water heater, you can choose from a range of technologies to suit your home, climate, budget and impact on our environment such as greenhouse gas emissions.

There are two basic types of water heaters on the market – storage and instantaneous (continuous) flow systems. They use a variety of energy sources to heat water including solar, ambient air (air-sourced heat pumps), gas (LPG and natural gas) and electricity. Storage water heaters use an insulated tank to store heated water for use when it is required. All energy sources can be used when operating storage water heaters, depending on what type and configuration of water heater you choose. Instantaneous flow systems heat only the water required and do not use a storage tank, as such they do not suffer the heat losses associated with storage systems. Instantaneous systems can operate on electricity or gas (LPG or natural gas).

The chart below shows the estimated penetration of water heaters in Australian households in 2014. There are a number of different technologies used in the market, with different energy sources and differing levels of use.

electric storage 36%, gas storage 24%, instantaneous gas 21%,solar electric boost 10%, solar gas boost 3%, heat pump 3%, instantaneous electric 3%

Product information

The following pages contain detailed information on:


More information

    There are many documents relating to water heating products available on this site.
    The factsheet, checklist and guides have been developed to help you choose an appropriate hot water system to suit your circumstances. They also give useful tips on how to most efficiently operate the system to maximise your economic and environmental benefits.

    Also, remember it’s always a good idea to do your research and obtain several quotes before making a final decision.

    For even more practical information on how to save energy and money go to

    At a glance...

    Current hot water work

    Zoned Energy Rating Label

    The energy efficiency and performance of certain appliances can be impacted by where it is installed (location) and other factors such as usage patterns and climate variations, including air temperature, water temperature, frosting, humidity and cloud cover.

    A Research Report setting out the methodology and technical elements for a Solar Hot Water ZERL was released in December 2015. Consultation on the report was undertaken between December 2015 and 1 February 2016, and focused on the feasibility and robustness of the technical elements of the proposed approach.  Consultations are now closed on this report, and outcomes can be found on the consultation page.

    Find out more about the Zoned Energy Rating Label

    Investigation of current load profile and load sizes

    Investigations undertaken by E3 indicate a range of research identifying differences in the hot water load sizes and draw-down profiles compared to that used in Australian Standards.

    EECA Policy Development Roadmap

    In conjunction with the E3 Programme, EECA is leading a project to develop a high level policy development roadmap that explores possible new standards and labelling for hot water systems in New Zealand and Australia. EECA has launched an RFP on the Government Electronic Tenders Service (GETS) to procure the services of a consultant to provide technical, economic modelling and policy support on this project. This tender will remain open until 15th January.


    Water Heating FAQs

    How do I choose the best water heater for me?

    Look at our checklist for hints of what to consider when buying or installing a water heater.

    The main issues you should consider are:

    • Where the heater can be installed

    • The price of the heater (as well as installation, maintenance and running costs)

    • The rebates and other purchase cost assistance applicable to the heater type and to your area

    • The energy source (electricity – for electric storage, instantaneous, heat pump water heaters and solar water heaters with an electric boost,  gas water heaters – natural or LPG,) and its availability

    • Specific issues that require consideration with different heater types – your climate, access to direct sun, shading, layout of your house, etc

    As with any large purchase, it’s a good idea to do your own research first and also to discuss your options with a number of suppliers or installers so they can advise on the heaters that may be appropriate for you. 

    How do I know what system will be the cheapest for me to run?

    The efficiency of any unit will depend on a large number of factors so it’s best to do plenty of research, including product reviews on websites, talking to several different retailers and suppliers before making any decisions.

    While the majority of the water produced from a solar or heat pump system should be from the sun or warmth from the air respectively, you will also have to account for any boosting that may be required when the hot water supply is insufficient.

    A solar hot water system can provide up to 90% of your required hot water, depending on where you live. Have a chat with your supplier to get an idea of the solar gain you can expect in your climate.

    Heat pumps work best in warm climates as they can gain more warmth from the air to transfer in to the water. Once temperatures get lower, it becomes more difficult for the heat pump to extract warmth from the air, so they will need to work for longer to produce the same amount of hot water.

    How can I reduce my hot water use?

    The website has an abundance of practical tips and information for reducing your hot water usage around the home.

    You can also search and compare appliances at

    What size system do you need?

    Storage units are usually sized according to the number of people in the house, and instantaneous units according to the maximum number of hot water outlets likely to be used at the same time. Gas storage systems can have a smaller tank size than electric off-peak systems as they reheat the water whenever it cools down.

    The way you use hot water will also impact on the size you should choose. If everyone in the household tends to shower at the same time of day, such as first thing in the morning, you may want a bigger storage tank to ensure you don't run out of hot water. But remember, the bigger the tank the greater the standing heat loss, so aim for the smallest tank that will meet your needs.

    The table below gives an indication of what size heater you might need, but you should always ask the supplier or manufacturer for specific size guidelines for the products you are considering.



    Number of people

    Size (litres)

    Number of hot taps used
    at the same time

    Flow rate
    (litres per minute)




















    Climate considerations need to be made when sizing and selecting a water heater. Storage heaters are an effective choice for any climate. However, in very cold climates, hot water usage tends to be higher, so it may be worth considering purchasing a larger storage tank than otherwise might be suggested for your household size. If you have the space available, then you could also consider installing the heater indoors, for example in a laundry, to help reduce heat loss from the tank.

    In a climate with very cold winters, such as alpine areas, you should choose a system with a higher capacity than is normally recommended for your needs because instantaneous heaters are limited in how much they can increase the temperature of the cold water. They can raise the temperature of the cold water by 25 degrees at their nominal maximum rated flow. Reducing the flow rate will also allow the water to be heated to a higher temperature.

    How much hot water can I get from my hot water system?

    For electric hot water systems, the capacity (called the ’hot water delivery‘) is a measure of the storage and is defined as the volume of water that can be delivered by the tank while maintaining the temperature within 12°C of the initial delivery temperature. This volume is relevant to storage water heaters (gas and electric) where the element rating is very much lower than the rate of energy delivered in the form of hot water. For large electric tanks, which are usually run on off-peak tariffs, this is a reasonable measure of the total hot water that can be delivered in a day. Note however, many utilities offer a tariff which allows boosting through a top element at off-peak rates if certain sizing requirements for the off-peak tank are met (typical > X litres for a Y bedroom house).For smaller electric tanks, which are typically run on continuous electric tariffs, the capacity is the amount of water that can be drawn off in a single sitting. Clearly, the recharge period depends on the element rating and the tank size, but is typically around an hour for smaller tanks.

    For gas storage water heaters, the tank storage capacity is a (very approximate) measure of the volume of hot water that can be drawn off in a single sitting. The recovery time depends on the rated burner capacity, but would typically be 1 to 3 hours.

    Gas instantaneous (also called continuous flow) and electric instantaneous can supply hot water as long as there is gas/electricity available. Note that these units typically require very high power inputs. Electric units are fairly rare and almost always require three phase power.

    Will I have to adjust my water usage patterns if I purchase a Solar Water Heater or Heat Pump Water Heater?

    A booster will provide additional hot water needs should there be insufficient energy from the sun to heat the water to the required temperature. If you, however, want to reduce your consumption of energy used you may have to be mindful of choosing the right Solar Water Heater or Heat Pump Water Heater with the right tank size for you and your family.

    What is a 'booster' in a Solar Water Heater or Heat Pump Water Heater System?

    A booster is a back-up heater which uses an alternative source of energy for times when there is insufficient energy from the sun to heat the water to the required temperature. Generally this source of energy is either electricity of gas.

    An in-tank boosting unit should ideally only activate when the water temperature is below the thermostat setting and should turn off when the desired temperature is reached. A manual booster switch can be used to maximise solar contribution.

    How will I know what electricity tariff will be appropriate for my system?

    Make sure you discuss your tariff options with your installer before the installation of your unit to ensure you have a good understanding of how different tariffs will affect both its running costs and performance.

    Generally, be aware that some low-emission water heaters are less suitable for off-peak tariffs. The following water heaters are better suited to continuous/day rate electric supply:

    • Instantaneous gas systems that require electricity to ignite the burner

    • Solar systems with a circulation pump or some gas boosts that require electricity for burner ignition

    • Some heat pumps – especially in colder climates where the pump will need to operate during the day

    To gain a better understanding of your tariff options, you should talk to your electricity supplier.

    Can I run a heat pump or solar system on off-peak power so I can continue using a cheaper tariff?

    Many models of solar are suitable to run on off-peak power. However, you should be aware that if you don’t use a lot of water in the mornings, operating your boost on off-peak can mean you have a full hot tank in the morning, meaning your solar collectors will be less able to make use of the sun’s contribution during the day.

    Some heat pumps may also be suitable to run on off-peak power but you should talk to your supplier before you decide on a model. If you live in a climate with cold overnight temperatures be aware that the heat pump will have to work a lot harder to heat your water than during the day when temperatures are warmer.

    In either case you should research your options and speak with suppliers before you make any final decisions.

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    Useful Resources

    Visit the Australian Government's website for useful information like:


    Latest consultation:

    14 Aug 2019 09:00 AAEST
    23 Sep 2019 17:00 AAEST

    Current and past consultations