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Introduction to Hot Water System Installation Costs

Having a new hot water system installed is a significant investment for your home, and we at Dulwich Hill Plumbing recognise that the installation cost is a major consideration in this decision.

In this article, we’ll break down the key elements that affect types of hot water systems’ total installation cost, so you can determine the most suitable and affordable option for your home.

The main influences on the cost of installing include factors such as the system’s fuel type, tank size, energy rating efficiency, and the complexity of the plumbing modifications needed. While the initial costs may be substantial, investing in an efficient pump hot water system can lead to continual savings on your energy expenses over time.

In certain instances, government rebates may be available for residential use, enhancing the cost-effectiveness of your water heater.

Whether you’re installing Rheem hot water systems, such as an electric storage unit, or the steady flow from an efficient hot water heater, our team of qualified plumbers can recommend the best solution for your household’s needs and budget.

As an established local plumbing business, we’ll also take care of your hot water heater installation professionally and provide ongoing maintenance to give you peace of mind.

Average Costs for Different Hot Water System Types

When it comes to installing hot water systems, the variance in pricing reflects your costs for a new system installation, depending on the type you choose. The cost around for basic electric and gas storage tank systems for replacements tends to range from $350 to $800. More complex setups, such as split systems, heat pumps, and solar hot water options, have hot water system prices averaging $1300 to $1400 for a new installation.

Electric Hot Water Systems

On the other hand, benefits of electric hot water systems include:

  • Lower upfront costs compared to gas or solar
  • Simple to install with minimal modifications
  • Wide availability of systems
  • Energy efficient models available

Installing a new electric hot water system may necessitate upgrading electrical wiring or the switchboard to accommodate an increased load, potentially adding $300 to $500 to overall costs. Energy efficient heat pump water heaters range from $2000-3500 installed but provide ongoing savings on bills.

When sized appropriately for your household, electric hot water delivers an affordable, reliable and safe hot water solution.

Gas Hot Water Systems

Gas water heaters, which are part of the hot water system gas category, tend to cost more upfront to purchase but are very cost-effective to run long-term. Installation prices for gas hot water systems typically range from $1,100 to $1,800, depending on the unit size, energy efficiency and any modifications required.

Benefits of gas hot water, including instantaneous hot water, include:

  • Instant hot water with continuous flow for an endless supply
  • Faster heating and recovery times than electric
  • Natural gas is generally cheaper than electricity
  • Higher energy efficiency ratings available

The main cost factors for gas hot water systems are:

  • Unit purchase price - continuous systems ($1,100-$2,500) or storage tanks ($800-$1,500)
  • Energy rating - higher efficiency units have higher upfront costs but greater savings over time
  • Fuel type - natural gas is usually more affordable than bottled LPG to run
  • Flueing and ventilation requirements - new flues add $300-600
  • Plumbing modifications - $200-800 for water and gas connections

With professional installation for Australian hot water solutions, notably gas systems, you can expect pay for a very convenient and cost-effective answer. Government rebates are also available for high efficiency units to offset purchase costs.

Solar Hot Water Systems

Solar hot water systems have higher upfront costs, with the cost of hot water setups averaging $4000-$6000 for purchase and installation. However, the cost solar hot water systems come with offers major long-term savings, primarily due to the efficiency of solar water heating. A solar heat pump on your energy bills can reduce heating costs by up to 50% compared to electric storage tanks.

The key benefits of a solar hot water system for your home include:

  • Free energy from the sun significantly lowers running costs
  • Estimated savings of $200-$400 per year on bills
  • Lower greenhouse gas emissions
  • Eligible for generous government rebates up to $1000 in NSW

Depending on your location, the main purchase costs for solar systems cover:

  • Solar collector panels - $1500-$2500
  • Water tank with electric heating booster - $1500-$2000
  • Controller, piping and parts - $1000-$1500

Installation costs a further $1000-$2000 depending on roof type, orientation and plumbing system. Total installed prices therefore range from $4000 for a basic 170L system up to $6000 for a 315L tank with the highest energy rating.

Make smart use of solar resources; In sunny Sydney, solar water heaters provide eco-friendly and cost-saving advantages for long-term energy expenses. And with rebates available, the overall systems’ cost, specifically your water heater, becomes more affordable than you might initially think.

Heat Pump Hot Water Systems

While heat pump hot water systems may increase installation costs compared to traditional electric or gas systems, they offer significant long-term savings. Prices range from $2500 - $4000 installed with a 315L unit.

Heat pump water systems use renewable ambient energy and their efficiency, coupled with the average installation cost, can range between good to excellent. Key benefits include:

  • Very low running costs - save $300-$500 p.a. on bills
  • Reduced greenhouse emissions
  • Higher energy ratings for greater efficiency
  • Eligible for government rebates up to $1000 off

Upfront purchase and install costs cover:

  • Heat pump unit - $1500-$2000
  • Storage tank - $800-$1500
  • Installation of parts, plumbing and electrical modifications - $500 to $1,000

While pricier initially, the energy savings from either gas electric systems deliver a short payback period. Projected over 15 years, heat pumps work out vastly cheaper than old electric systems.

The only downside to your system is the occasional operating noise, which is comparable to a medium fridge. Overall heat pumps give very economical, eco-friendly hot water.

Factors Influencing Installation Costs

Several key factors can impact the total installation costs when fitting a new hot water system:

Permits and Inspections

Our experienced team can assist with managing the costs of local council permits, which typically average around $250. Mandatory inspections may also be needed during and after install adding $100-150.

Parts and Materials

Piping, valves, insulation, brackets, anodes and electrical parts average $300-600 depending on the system type and complexity of the install.

Labour and Expertise

A qualified plumber will expertly fit your water system within budget, typically charging $100 to $150 per hour. Considering much does hot water system replacement vary, simple swap outs take 3-5 hours while more complex, thus more expensive installations, require 6-12 hours.

Location and Site Factors

If the site is difficult to access, multi-story, or extensions are required, extra labour and materials costs apply. Dulwich Hill’s mix of single and double storey homes has moderate accessibility.

While individual factors affect the cost, your hot water systems’ installations can incur, using experienced local experts like Dulwich Hill Plumbing helps manage the entire job smoothly from start to finish.

Energy Efficiency and Long-Term Savings

Choosing an energy-efficient hot water system can lead to substantial long-term financial savings. Units with higher energy star ratings, typically 3 stars or above, demonstrate how systems can use considerably less power or gas to heat water. This equates to major reductions in energy bills over time, particularly when compared to 0-2 star rated models of a traditional gas hot water system.

Choosing the right size hot water system for your household’s usage brings further savings; Too small and you might run out hot when you need it most. Undersized units run constantly and risk running out hot water to meet demand, thus wasting energy. Oversized tanks heat excessive water which loses heat and needs constantreheating - another drain on money and resources.

Our plumbers always recommend the hot water system should meet the most appropriate capacity and energy rating based on your needs. This ensures optimal efficiency and performance at the lowest running costs.

While energy efficient systems have slightly higher purchase prices, the long term savings of $200 to $500 every year on bills offsets this initial outlay. With rising energy prices, these savings will only increase over a system’s lifespan of 10-15 years.

Investing in higher star-rated systems harnessing efficient electric, gas, or heat pump technology with proper sizing can deliver significant benefits through reduced power and gas usage. This illustrates how Considering the price hot water systems can pose, an eco-friendly option that reduces environmental impact offers a valuable win-win situation.

When to Choose Professional Installation

For any plumbing installation, particularly electric hot water systems, engaging qualified professionals is essential for ensuring safety, compliance, and warranty coverage, potentially saving you money in the long term. This is especially critical in guaranteeing that the water system will adequately meet all your household needs.

Our fully licensed Dulwich Hill plumbers ensure that your hot water system, which is expected to serve you reliably for years, is installed to the highest standards. This includes:

  • System selection advice based on your household’s specific usage needs
  • Managing permits, approvals and council regulations
  • Precision mounting, fittings and leak protection
  • Complex gas, electrical, ventilation and flueing requirements
  • Commissioning and performance testing
  • Full certification for warranty validity

We remain available for ongoing maintenance and repairs to maximise the lifespan and efficiency of hot water heaters.

For a reliable and cost-effective hot water system installation, get in touch with Dulwich Hill Plumbing at 1300 349 338 or send an email to [email protected]. Our team is ready to guide you towards the best types systems that meet your home’s unique needs.


The installation of your new hot water system is a significant commitment demanding thoughtful planning. However, with professional guidance from licenced plumbers like Dulwich Hill Plumbing, homeowners can make informed decisions weighing up the costs versus the long-term benefits of reliable and economical hot water.

Although initial costs appear steep, modern energy-efficient systems with a superior energy star rating provide substantial ongoing savings evident on energy bills, coupled with increased convenience. Government rebates can also contribute to offsetting initial costs, leading you to consider the potential savings.

Whether replacing an existing hot water unit or making the change to a cost-effective solar hot water type system, we encourage you to contact Dulwich Hill Plumbing today on 1300 349 338 for personalised advice and solutions. With extensive industry expertise installing all types hot water setups, we keep your specific household needs, budget and safety as top priorities.

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