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Hot water is essential for any business or home. However, choosing the right hot water system can be confusing. There is a huge range of different hot water systems on the market. Durability, features, and options vary widely. This affects the price of any given system. With so many options, making the right choice can feel impossible.

But don’t worry! We’re here to help. Let’s demystify this industry.

In this article, we’re going to look at the main factors affecting the price of various hot water heater systems. We’ll examine different models and categories of hot water heaters and explain their pluses and minuses. We’ll explain the basic costs of purchasing and installing a unit, but also cover some factors you may not have considered, such as site access and government rebates.

There are six main factors that determine the price of a new hot water system installation or upgrade.

The type of hot water system and its size is the main factor in price.
There are four main types of hot water systems, along with a variety of sub-types in each category. Here’s a summary. This table only includes the equipment itself. Other factors add additional costs.

System Type Avg. Minimum Price Avg. Maximum Price
Electric – “Storage” type $450 (25 L) $1900 (400 L)
Electric – “Instant” type $660 $1400
Gas – “Storage” type $850 (135 L) $1700 (360 L)
Gas – “Instant” type $750 $1800
Solar – Roof Mounted (electric boost) $3600 $4800
Solar – Split System (electric boost) $3900 $6000+
Solar – Split System (gas boost) $4900 $6800+
Heat Pump $3300 (160 L) $4600 (315 L)

Electric Hot Water System Prices

These systems come in two main types: storage, and instant. Electric storage systems use heating elements to heat a tank of water that varies in size from about 25L on the low end to more than 400L. Small sizes start at around $450, and large models—which often use two heating elements for faster warming—rise to about $1900.

Instant water heaters have no tank. Instead, they function by drawing high amounts of power to heat water on-demand. These models are increasing in popularity, as they provide essentially limitless hot water and can save energy in some cases. This is especially true if you use a relatively small amount of hot water. These systems cost in the range of $680 to $1600 ( Product only )

Gas Hot Water System Prices

Like electric systems, gas hot water heaters come in instant and storage varieties. However, these different approaches have a bit more pricing parity. Gas instant systems typically range from about $750 to $1900, depending on the number of simultaneous taps or water outlets the device must serve. Gas heaters with storage tanks start at about $850 for a 135L system and range to $1800 for high-end 360L systems.

Solar Hot Water System Prices

Increasingly, people are moving to solar-powered hot water, especially in the sunny parts of the country. These systems are more expensive to install, but save energy and money over the life of the system. Most solar systems need an “assist” for days that are particularly overcast or cold.

Solar systems come in a few main varieties. Roof-mounted models are becoming more popular. Base prices for electric-boosted roof-mounted models range from about $3800 to $5400 or more. Electric-boosted systems with a tank on the ground (these are called a “split system”) are preferable when roofs can’t support the weight of a tank. These systems range from roughly $3900 to $6000 or more. Finally, a gas boosted split system starts at around $4900 and ranges up to $6500.

Heat Pump Prices

Like a solar system, a heat pump water heater is highly efficient. However, the approach is different. Instead of using solar energy, heat pump water heaters use air-conditioning technology to extract heat from the ambient air and use it to heat water.

These systems save money, but often require a warm or temperate climate and must be installed outdoors. They can also be noisy. Prices for a heat pump water system start at around $3800 for a 160L system, and range to roughly $4500 for a 315L heat pump.