Thinking about switching to an electric hot water system or just wondering if your current one is chewing through cash? You’re not alone. With energy prices on the rise, Aussie households are starting to pay closer attention to what’s using up the most power.
Let’s take a look at what it really costs to run an electric hot water system in Australia, how it compares to gas and solar, and whether switching to a heat pump system like Reclaim or iStore could save you money in the long run.
What Are Electric Hot Water Systems?
Before we dive into dollars, quick recap: electric hot water systems use electricity to heat water and store it in a tank until you need it. Pretty common across Australia, especially in older homes and units.
There are two main types:
- Conventional electric storage systems – use a heating element, similar to a kettle
- Electric heat pump systems – way more energy efficient, they extract heat from the air to warm your water
While both are electric, they perform very differently when it comes to running costs.
So, Are They Expensive to Run?
Short answer? They can be, especially the old-school electric storage ones. They’re known for being one of the biggest power users in the home, right up there with heating and cooling.
Here’s why:
- They run on standard electricity tariffs, which aren’t always the cheapest
- They heat water constantly to maintain temperature, even when you’re not using it
- They can lose heat through the tank, making them less efficient overall
For a typical Australian household, a conventional electric system could add around $800–$1,200 a year to your energy bill.
Why Heat Pumps Are a Game-Changer
Enter: electric heat pump systems. These units do things a little differently. Instead of generating heat directly, they pull warmth from the air (yep, even in cooler weather), making them way more efficient.
Brands like Reclaim and iStore, both offered by Heat and Cool Service Group, have built a solid rep for performance and reliability.
Some key benefits:
- Use up to 80% less energy than standard electric storage systems
- Can be paired with solar panels for even bigger savings
- Work well even in cooler Australian climates
- Government rebates and incentives may apply in certain states
Bottom line? While the upfront cost is higher, running costs are dramatically lower—often $150–$300 a year depending on your setup.
Electric vs Gas vs Solar – How They Stack Up
Electric Storage
Approx. Annual Running Cost: $800–$1,200
Key Points: Easy to install, but pricey to run
Electric Heat Pump
Approx. Annual Running Cost: $150–$300
Key Points: Energy-efficient, rebate-friendly
Gas
Approx. Annual Running Cost: $300–$500
Key Points: Good for large households, but rising prices
Solar (with electric boost)
Approx. Annual Running Cost: $100–$400
Key Points: Great long-term savings, high initial cost
If you’re in an area with low night-time electricity tariffs or have solar panels already, a heat pump system makes a lot of sense.
What Impacts Running Costs?
Not all households are the same. A few things will affect your bill:
- Household size – more people = more hot showers = higher costs
- Water usage habits – long showers and hot washing machine cycles chew up power
- Climate – heat pumps work better in milder conditions
- Tariff structure – off-peak vs peak electricity rates
Want to make sure your system’s running efficiently? A licensed installer can assess your usage and help you get the most bang for your buck.
Why Reclaim and iStore Are Worth a Look
Both Reclaim and iStore are designed with Aussie homes in mind.
- Reclaim Energy: Known for its whisper-quiet operation and compatibility with solar systems. Uses CO2 refrigerant—eco-friendly and efficient
- iStore: Popular for its simple design and strong warranty. It’s a good all-rounder, especially in warmer climates
The team at Heat and Cool Service Group are accredited to supply and install both brands, making the process easy from start to finish.
Want to Cut Your Hot Water Costs?
Here’s what you can do:
- Switch to a heat pump – upfront investment, long-term savings
- Use off-peak tariffs – talk to your energy provider about switching
- Install solar – combined with a heat pump for ultra-low running costs
- Fix leaks and insulate pipes – every bit helps
- Use less hot water – shorter showers, cold water washing, efficient fixtures
Final Thoughts
Electric hot water systems can be expensive, but they don’t have to be. If you’re still using an old electric storage tank, upgrading to a heat pump could seriously cut your energy bills.
Reclaim and iStore are two of the best options out there, and Heat and Cool Service Group are the go-to experts if you’re ready to make the switch.
Want to chat about your options? Reach out to the team here and see what works for your home and budget.
