How can I replace my gas hot water heater?

How can I replace my gas hot water heater?


If you urgently need to replace your hot water system, contact Energy Freedom Homes today; we'll get you the best system for your circumstances and requirements as quickly as possible.
On your journey to an Energy Freedom Home, you have reached the stage where you are ready to replace your gas hot water heater, or perhaps you are just finding out what is involved so you can be prepared when your current system dies.
Unsure about what an Energy Freedom Home is? You can read about it here.
Replacing your gas hot water heater is a great opportunity to lower your energy bills, as water heating accounts for a quarter of typical household energy use – and it can be even more.

 


Source1
 
Upgrading to a more efficient system can save you a lot of money...but how should you go about doing it? Luckily, despite what you may have heard, it's really not that complicated.

In the following collection of articles we will take you through:
  1. The decisions that need to be made to get an all-electric hot water heater;
  2. Which hot water heater to buy based on your requirements.
We will also address some common questions about heat pumps.
 
In this first article, we cover the decisions.

Key decisions

We will take you though the key decisions that may be blocking you from taking action.
 
A summary of these is below. We've also outlined the decisions that we'd recommend for most people.


Decision

Options

Recommended

When to buy

Now / later

Now

Storage vs instantaneous

Storage / instantaneous

Storage

Energy source

Electric resistive / solar water heater / heat pump

Heat pump

First decision: when to buy? 

There are three areas to consider when deciding the time to upgrade:
  1. If your current system is beyond its life span;
  2. If your current system is out of warranty;
  3. If you bought your system more than three years ago. 
Life span
Many of us wait until our current appliances die before we replace them. The problem with waiting for your hot water to die is that you will need to make decisions quickly and you will be selecting from what is available, rather than what would suit your circumstance best.
 
The average life span of a hot water unit is 10 years2. So, if you have a gas hot water unit that is reaching that age, it is worth considering an upgrade before you are making an emergency call to your local plumber! 

Out of warranty 
As soon as your system is out of warranty you are vulnerable to paying for a replacement should anything go wrong. Rather than having the unexpected cost of replacing an out-of-warranty product, you can budget for the replacement now.

Take advantage of rebates
There are government rebates available to switch to a more efficient system for any inefficient gas or electric system. As a Victorian, you are eligible for rebates if your current hot water system was installed more than three years ago. We don't know how long these rebates will be around for, so deciding to upgrade now is better than waiting and missing out.
 
Unless your current system is less than three years old, each of these options mean the best time to buy is now. You'll benefit from lower running costs straight away and government rebates will probably only reduce over time.

Second decision: storage or instantaneous? 

If paired with a heat pump, systems with a storage tank are more efficient than instantaneous3. As such, this is the option you should choose if you have space outside for a tank.
 
It'll allow you to heat water for free with your solar or when electricity prices are off-peak and then use it when you need. A hot water storage tank is the cheapest form of energy storage that you'll ever purchase, far cheaper than a battery.
 
Storage tanks can be located outside or indoors, so even if your house does not have a lot of outside space, a cupboard may be appropriate.
Estimating your tank size? Typically, one person uses about 50 litres of hot water per day and this is a good general guide4. Multiply up by the number of people in the house to get the storage capacity. For example, a 4 person household needs 4 x 50L = 200L tank size.
If you'd like to sell your home at some point in the next 10 years, it's worth considering how many people might live there. Undersized hot water storage will affect resale value, so factor in a contingency for the new occupants potentially sharing bedrooms. For example, a 2 bedroom house could end up accommodating 3 people, requiring a 3 x 50L = 150L tank size.
Don't have space for a storage tank indoors or outdoors? The only alternative is a continuous flow hot water system, also often referred to as "instantaneous". The system heats only as much water as you need, when you need it.
Electric instantaneous systems draw a large amount of current, so unless you've got three-phase power to your property we wouldn't recommend this option. Join an Energy Freedom Homes Masterclass and learn to identify your needs, gain expert installation advice, and  figure out an all-electric hot water solution. Check your Masterclass readiness now!

 Third decision: energy source? 

The main energy sources to replace gas for heating water are electric resistance coils, solar and heat pumps.

Electric resistance = expensive 
Electric systems use a resistance coil that heats up and transfers electricity to the surrounding water. Basically, a giant kettle.

There are two types of electric resistance:
  1. An electrically heated storage tank system is usually relatively cheap to buy and install, but is usually the most expensive to run, especially if it's on the continuous (full day) rate3.
  2. Instantaneous electric water heaters typically use this type of technology, but they require a large amount of electrical current to heat a constant flow of water. This is because they are increasing the temperature of water by about 25 degrees in less than a second. Realistically, drawing this much power will result in expensive electrical upgrades to your home.
Solar water heaters = expensive and inconsistent 
Different types of system exist, but solar hot water heaters typically use the sun's radiation to heat water in collection tubes and store it in a tank.

They will use a gas or electric booster when there is not enough sun.
 
There are certain criteria that a home needs to meet to be able to use a solar water heater effectively:
  1. North-facing roof; no more than 45 degrees east or west of true north;
  2. Roof needs to have a sloping angler of between 15 degrees and 50 degrees;
  3. Unshaded;
  4. Exposure to sun all year (i.e. Victoria does not receive enough consistent sun)4.
In brief, solar hot water systems are unreliable and you'll need to end up using an electric or gas booster to get consistent hot water when the sun is shining, which mitigates a lot of their running cost benefits.
 
They are also comparatively expensive and time-consuming to install.

Heat pumps = just right 
Heat pump systems are a much more efficient form of electric storage tank configuration that works on the same principle as a fridge or air conditioner.

Rather than the electricity heating the water directly, a heat pump extracts heat from the air and transfers it into water that is stored in a tank.
 
They typically use 60-75% less electricity than a conventional electric storage tank system5.
 
Heat pumps make particularly good sense when you have solar panels on your roof; you are powering the hot water system with your "free" electricity. There are two types of heat pump.

One is integrated, where the tank and compressor are a single unit.

 
The other is split, where there are separate tank and compressor units.

If you have no space for a storage tank outdoors, a split configuration allows you to put the storage tank indoors.
There are a few requirements and recommendations for heat pumps:
  1. Compressors need to be installed in a well-ventilated area outdoors.
  2. For cheaper units, the compressor can be noisy, like the outdoor unit of an air conditioner, so factor this into your install location.
  3. Heat pumps can function effectively in all Australian climate zones.
  4. Government rebates and other incentives can help offset the purchase cost.

Our recommendation

If you can, a heat pump system is your best option due to it's untouchable efficiency, low running costs, reliability and its compatibility with home-generated solar power.
 
If you don't have space for a storage tank outdoors, you can still use a split configuration heat pump and find a location for the storage tank indoors.
 
If this isn't possible, there are still options to get off gas but they will be more complicated and expensive. Sign up for a home assessment and we'll help you figure out the best solution.

In summary 

Choosing a replacement hot water system is not nearly as complicated as a lot of people make out.
 
The following are the key decisions in the process.
 

Decision

Options

Recommended

When to buy

Now / later

Now

Storage vs instantaneous

Storage / instantaneous

Storage

Energy source

Electric resistive / solar water heater / heat pump

Heat pump

 

Considering these options, we recommend a heat pump, if you have the space for a storage tank either indoors or outdoors.

Next steps 

Hopefully, you're well on the way to getting a reliable replacement for your gas hot water system with low running costs installed and a healthy purchase discount from rebates!
 
Ready to pick a hot water system? If you've got space for a storage tank, have a look at our article, 'Which is the best hot water heat pump?'
 
Don't have space for a storage tank? We can help! Join an Energy Freedom Homes Masterclass and learn to identify your needs, gain expert installation advice, and meet trustworthy tradespeople. Check your Masterclass readiness now!

References

1 Riedy, C., Milne, G., Ryan, P., Alviano, P., & Dwyer, S. (2020). Hot water systems. Australian Government: Department of Climate Change, Energy, the and WaterEnvironment. Retrieved  2023, from https://www.yourhome.gov.au/energy/hot-water-systems