Are you taking your Hot Water System for granted? Your Hot Water System is the engine of your home. It is responsible for heating water for showers, washing dishes and washing clothes but did you know it contributes to almost 30% of your home’s energy bill each month.

What type of Hot Water System do I buy? 

There are two types of water heaters:

  • Storage systems – heat & store water in an insulated tank for use when required
  • Instantaneous (Continuous Flow) systems – heat water only when it’s required; no storage tank required

Each use a variety of energy sources to heat your water including solar, gas and electricity.

Storage Tank or Instantaneous Hot Water System?

Storage Tank Hot Water System:

  • Most electric, gas, solar & heat pump hot water systems use a tank
  • Steel tanks can corrode over time – most tanks usually last for 5-10 years
  • Size of the tank impacts on how much hot water can be stored at any given time

Instantaneous ‘Continuous Flow’ Hot Water System:

  • Most models use gas, but electric models are also available
  • Often cheaper to run than storage units as they only run when needed

How Does My Water Get Hot? 

When looking to purchase a new Hot Water System you need to consider the different heating methods available: electricity, gas (Natural or LPG), solar or heat pump


  • An electrically heated storage tank system is usually relatively cheap to buy and install, but is usually the most expensive to run
  • Systems that run on off-peak electricity are much cheaper to run but need a larger tank as the water heated overnight has to last you all day
  • Electric instantaneous heaters are also available and over the long term are cheaper to run than electric storage tank systems


  • Natural gas is a good option if you have access to it. It’s cheaper than electricity and because gas rates don’t vary throughout the day, gas hot water systems can heat water as needed
  • Gas systems have an energy efficiency star rating making your decision to buy a more energy efficient model that little bit easier
  • Gas instantaneous systems are also available and are cheaper to run than electric instantaneous
  • Some have a pilot light which uses a small amount of gas. Electric ignition is more economical however in a blackout you can lose your hot water supply
  • LPG gas bottles are an alternative to natural gas – but expect to pay significantly more in running costs


  • Consists of solar collector panels & a storage tank. You need a large tank to allow for days with less sunlight, or more hot showers than usual
  • If your panels aren’t installed in an ideal location, they may be less efficient
  • Comparatively expensive and time consuming to install, but a well chosen system will pay for itself in the long run due to very low running costs
  • Have a low life expectancy and only run when the sun is out
  • Some homes cannot utilise the sun’s energy due to the orientation of their roofs, the small size of their roofs or overhanging trees and shaded areas
  • Solar requires the use of heating tanks which results in water wastage for delivery, so tank-less instantaneous hot water is the better alternative


  • More efficient form of electric storage tank system that works on the same principle as a fridge or air conditioner, by extracting heat from the air and using it to heat the water

So, which Hot Water System will save me the most money?

Simple Tip: Replace your existing storage tank system with a tank-less instantaneous gas or electric hot water system – This simple change will give you the best, most efficient result.

SAPPHIRE’S SELECTION: Instantaneous Gas Hot Water System

  • If you have access to natural gas we recommend installing an energy efficient instantaneous gas hot water system. They are relatively inexpensive to install and running costs are significantly lower compared to electric instantaneous & tank systems.
  • If you don’t have access to natural gas but wish to purchase LPG gas bottles expect to pay significantly more in running costs
  • Instantaneous Gas Hot Water Systems tend not to rust compared to other alternatives

When shopping for a new Gas Hot Water System compare star ratings:

  • The energy rating label is displayed on all systems & will help you find the most efficient system:
    • more stars means you spend less money on running costs
    • compare models with the same star ratings by looking at the energy consumption number on the label. The lower the score the more money you save
  • Buy to save in the long run
    • buy a Gas Hot Water System with at least 5 stars

VERDICT: The type of hot water system you install in your home really depends on the energy source you have available and the size of your home. It is best to speak to a Hot Water Specialist who can help you determine the best system for your home’s needs.