The last thing anyone wants is to land in hot water with their budget over a hot water system. But these are essential features in our modern homes that contribute to our comfort and cleanliness.

Cost is understandably a concern when it comes to the installation of a hot water system. To avoid surprises, it makes sense to conduct research about pricing and what affects it. The installation of a hot water system depends on numerous factors, which we’ll walk you through below. What’s more, the price will ultimately depend on a combination of your preferences and the hot water needs of your household.

There are many kinds of hot water systems with various levels of capacity. Generally, you can expect to pay between $350 – 800 for a basic hot water system installation (electric or gas). Delivery of the new unit and disposal of the old one might cost another $250 or so combined.

We’re going to explore all aspects of hot water systems including the price, installation, and different kinds available. This will give you a better idea of the larger picture. But first, let’s look at the factors that influence the cost of a hot water system.

Hot water system installation: major considerations

For the most part, no two hot water systems are exactly the same. And neither are the water consumption needs of a family or household. How these fit into your existing home plumbing structure will also vary. The major factors that affect the cost of a hot water system installation include:

  • System type – Whether you choose a gas, electric, or solar hot water system will have major implications on both the cost of installation and purchase. You have to balance this cost against the potential savings over time.
  • Installation complexity – Issues like accessibility, size, and existing plumping are just a few things that affect complexity. And of course, the more complex the installation, the more it will cost. For instance, if you’re installing a system on the roof, it will take longer and pose more danger to the installation specialist.
  • Replacement or new – New or different hot water systems will cost more as new pipes and connections have to be made to match.
  • Disposal – You will likely have to pay if you want the installation specialist to carry away your old unit. This is one of those forgotten fees that annoy people when they see it not included in the end bill. But regulations govern the safe disposal of water systems, and it needs to be taken care of properly.
  • Delivery – Hot water systems are heavy and difficult to move and transport. So you’ll have to inquire as to this additional cost. If you live in an apartment on the top floor, then it might require two people to bring the unit up. This could be yet another annoying extra cost if you’re not prepared for it.
  • Maintenance cost – Though not strictly a function of the installation, you need to keep in mind how much it will cost to run the unit and how efficient it is over time. Paying more for a higher efficiency system up front might cost you less over the long term.

Keeping these factors in mind should give you a broader perspective on the cost of installing a hot water system and what the financial risks and rewards truly are.

The overall system capacity will not greatly affect the cost of a hot water system installation, but it will impact the pricing of the actual unit.

Hot water system installation prices

There are two primary considerations when it comes to the price of a hot water installation. The first is the unit itself. A solar hot water system is going to cost way more than an instant electric hot water system. It requires a specialised install with more components.

The second factor is going to be the difficulty of installation. This will depend on where the hot water system is going to be installed as well as the pipes and existing fittings. If you are replacing an old system with an identical one (or a similar model), then you will benefit from lower costs. This is because the current architecture is already in place: you just replace the old system with a new one. It’s straightforward to install.

This is not the case where you are relocating the system elsewhere or upgrading to a different type of unit. New pipes will need to be installed, and this will increase the cost.

The table below outlines average hot water system installation prices for electric and gas. The installation costs are also not inclusive of the delivery fee for the new unit or the disposal unit for the old.

Type of Installation Minimum Price Maximum Price
Installation of New System $350 $800
Replacement of Identical Size/Type $200 $600
Tempering Valves $100 $300
Conversion (i.e Electric to Gas) $1,500 $3,000
Repositioning of System $1,000 $2,000

How much does a solar hot water system installation cost?

A solar hot water system is unique for many reasons. One is that the prices for installation and the unit itself are often combined into one. Solar panels can only be installed by a CEC-licenced professional. There is also a government rebate system taking place that drastically reduces the cost.

Solar hot water systems can be either split system (with the tank on the ground) or roof mounted. Depending on capacity and quality, a roof-mounted system might cost between $2,000-4,000 after the rebate has been applied. Split systems might cost between $3,000-5,000 after the rebate has been applied. These prices include both supply and installation.

Gas boosted split systems will cost more than electric boosted split systems. Solar hot water installations are not for everybody, despite the touted benefits. You need to assess your household consumption requirements to see if it’s really worth it. They cost far more to install and you’ll need to have space on the roof as well as lots of sunshine.

Hot water system: unit prices

The type of hot water system is also a major factor to consider. In many instances, the more expensive the system, the more expensive the installation cost, which is something of a double whammy. This is due to the fact that specialised systems require more specialised installations.

If you want to install a solar unit, for example, you’ll need an expert to first access the site to see what the conditions are. It further requires the installation of solar panels and potentially a storage tank on the roof (though it can only be placed on the ground for split system solar installations). This is obviously going to add to the overall time taken as well as the risk and complexity.

Type of Hot Water system Minimum Price Maximum Price
Electric (Storage) $450 (125L) $1,900 (400 L)
Electric (Instant) $660 $1,400
Gas (Storage) $850 (135 L) $1,700 (360 L)
Gas (Instant) $750 $1,800
Solar (Split System, Electric or Gas Boost) $3,600 $7,000
Heat Pump $3,500 (160 L) $4,800 (315 L)

How can I reduce hot water installation costs?

Only work with a licensed plumber (check their licence number) that gives you an itemised list of all the costs involved. This will give you a more accurate picture as to what you are paying for and where the money went. Going with a licensed and insured professional will save you on repairs and mistakes that less experienced (and cheaper) installers could make.

The fact is that there is little you can do to reduce installation costs as it is really a function of the difficulty of installation and the type of unit. You’ll have to weigh up the installation costs against the potential savings to assess whether a given system is worth it.

A cheaper installation of an electric instant heater is a direct way to reduce hot water installation costs. But you are then losing money on each electricity bill due to a reduced capacity and efficiency of this type of hot water system. They have increased running costs. On the other hand, if you only use a small amount of water each day, then an electric instant hot water system might be exactly what you need.

Is it worth paying for a more expensive hot water installation?

In many cases, it is worth getting a better system with a higher installation fee. If you do the math, over the long term you should expect to see a better return on investment. Consider the annual running costs of various systems. It might cost you around $700 – 900 to run an electric instant system and around $500 for a gas.

In contrast, a solar system boosted with gas or electricity will cost you between $50 – 250 annually. It’s also more environmentally friendly. However, it’s not for everybody and there are many variables to consider here.

The following table outlines the annual running costs for various hot water systems. You’ll want to keep the running costs in mind while assessing the cost of installation.

Hot Water Heater Type Annual Maintenance Cost
Natural Gas (Storage) $350 – $415
Natural Gas (Instant) $295 – $340
LPG (Storage) $560 – $665
LPG (Instant) $465 – $535
Electric Peak Tariff (Storage) $850 – $950
Electric Peak Tariff (Instant) $700 – $800
Electric Off-peak Tariff (Storage) $650 – $750
Solar (Natural Gas Boosted) $65 – $85
Solar (LPG Boosted) $95 – $130
Solar (Electric Boosted, Peak Tariff) $260 – $365
Solar (Electric Boosted,  Off-peak Tariff) $185 – $265
Heat Pump (Peak Tariff) $245 – $385
Heat Pump (Off-peak Tariff) $160 – $250

What should I look out for in a hot water installation specialist?

When considering where to go for the supply and installation of your hot water system, you’ll want to find a plumber with experience. You also need to check credentials: only a licenced gas fitter can install a gas hot water system. And only a CEC-accredited installer can install solar panels. Questions you might want to ask your potential hot water installation specialist include:

  1. How long have you been in business?
  2. Are you local and family-owned/operated?
  3. Can you supply testimonials/social proofs?
  4. Are you licenced, registered, and insured to operate?

After these questions have been answered, then you know you are working with an experienced professional. It’s unlikely that an installer that has been in business for longer than 10 years with positive social proofs got there by accident.

Find the best hot water system installer near you

If you’re looking for a high-quality hot water system, then look no further than Fluid Plumbing & Gas Services. We are five-star rated and highly regarded in the Canberra area for the quality of our customer care and the depth of our expertise. We’re also locally owned and operated with 12 years of experience providing efficient hot water services at an affordable price to customers.

We are a one-stop-shop for all hot water, plumbing, and gas fitting needs.

Call now on 📞 0411 169 327 for a fast and free quote.