Switching From Gas Hot Water System to Electric Hot Water System

What does the phase-out of gas in Victoria for new builds mean for your hot water system? Do you need to replace your gas hot water system with electric hot water or a heat pump system? As of now the mandate for the phase of gas connections is just for new homes being built and not existing homes, so you don’t need to rush out and buy a new electric hot water system. But it is a good idea to put some thought into what hot water system you might purchase when your current one needs replacing. 

The term ‘all-electric homes’ is becoming part of the lexicon in the trade industry and is starting to make its way down to homeowners. All-Electric means having no reliance on gas to run your home, for example, electric oven, electric hot water and electric heating/cooling. All-electric homes combine the power of solar with electric power to save on bills and have a greener, more efficient home. The shift to all-electric appliances reflects a global trend towards reducing emissions and dependence on fossil fuels. Here’s what you need to know about this significant change and how Harley Plumbing can assist in this transition.

The Transition: What’s Happening?

Starting with new residential builds, there will be an exclusive move towards electric connections starting in 2024. This initiative will extend to public buildings as well, with an immediate shift to electric energy sources being mandated. The benefits of this transition are substantial, as it can lead to around $1000 savings on energy bills annually. The savings could be even more significant, potentially doubling, if solar energy systems are installed in conjunction with the electric connections.

Harley Plumbing’s Electric Hot Water Solutions

Did you know that hot water systems are one of the largest energy users in the home with around 21% of total energy use? So by changing your power from gas to electric and solar you can slash this amount and cut household costs. The rebate for switching to electric hot water and heat pump systems is up to $1000. A solar electric hot water system saves on average $140 to $400 per year on average for households.  

Solar electric hot water and heat pump hot water systems use less energy to heat water and can be run on renewable energy. Our Harley Plumbing team can install a more efficient solar hot water or heat pump system and help reduce your bills. And we can help you get the $1000 rebate for the upfront costs of installing a new hot water system. 

Existing homes aren’t subject to the immediate gas ban. However, the shift to fully electric homes will gradually occur as gas appliances wear out. Harley Plumbing can provide expert guidance and installation for those ready to make the switch.

Rebates and How to Apply

The Victorian Government is providing incentives to ease the transition with a hot water rebate of up to $1,000 on eligible heat pumps and hot water systems.

Process for Applying

First, you need to obtain a quote: Contact Harley Plumbing for a quote.Then check eligibility. See below.

  • you are the owner-occupier of an existing property where the system is to be installed
  • the combined household taxable income of all owners is less than $180,000 per year
  • you have not already received a hot water rebate or a solar battery rebate under the Solar Homes Program
  • the property is valued at under $3 million
  • the property address has not previously received a hot water rebate or a solar battery rebate under the Solar Homes Program
  • the hot water system to be replaced is at least three years old from the date of purchase
  • Householders cannot receive the same Solar Homes rebate more than once. For example, if a householder has previously received a hot water rebate, they cannot receive another hot water rebate.
  • Apply for the Rebate: Easy application through the hot water rebate portal.

Electric Hot Water Systems

Victoria’s shift from gas to electricity is a necessary step towards a sustainable future. With benefits ranging from cost savings to environmental impact, the transition is undoubtedly a positive move. Harley Plumbing has years of experience in hot water systems and we can give you advice on this change and help you with buying and installing a new hot water system that complies with the government’s rebate eligibility test. Make the switch today, and be a part of Victoria’s cleaner, greener tomorrow.

Pros of Electric Hot Water Systems (including Heat Pumps)

  • Types of Systems: Conventional resistive, heat pump and instantaneous electric hot water systems are available.
  • Energy Efficiency: Heat pumps are highly energy-efficient, and systems can be powered by renewable sources like solar panels or green power.
  • Rebates and Incentives: Government offers often apply to solar and electric heat pump systems.
  • Solar Pairing: With solar panels, electricity becomes very cheap, making electric hot water systems even more appealing.

Cons of Electric Hot Water Systems

  • Efficiency Concerns: Conventional resistive systems aren’t as energy-efficient.
  • Power Requirements: Instantaneous systems need a lot of power and might require three-phase power, which most homes don’t have.
  • Environmental Impact: If electricity is from non-renewable sources (not solar), environmental benefits diminish.


  • Electric storage tank system: $650–2600
  • Electric instantaneous system: $600–1800
  • Electric heat pump: $2200–6900

Gas Hot Water Systems

Pros of Gas Hot Water Systems

  • Effectiveness: Instantaneous gas systems work well for small households or remote parts.
  • Flexible Timing: Gas isn’t charged by time of use, so hot water usage can be more flexibly timed.

Cons of Gas Hot Water Systems

  • Environmental Impact: Gas is a non-renewable resource.
  • Health Risks: Gas appliances may create risks related to indoor air pollution.
  • Constant Use: Gas storage tank systems run a pilot flame continuously, using some gas.


  • Gas storage tank system: $1000–6000
  • Gas instantaneous system: $700–3800

Advantages of Solar-Powered Electric Hot Water System

  • Utilises Solar Energy
  • Harnesses Renewable Solar Power: Takes advantage of free, renewable energy from the sun, reducing dependence on non-renewable energy sources.
  • Low Running Costs: Solar hot water systems are generally very cheap to run, significantly lowering monthly energy bills.
  • Potential for Government Rebates and Incentives:  financial incentives for installing solar hot water systems, making the initial investment more manageable.

Economic Benefits

  • Long-term Savings: Although the upfront purchase cost might be higher, the system pays off in the long run through continual savings on energy bills.
  • Pairing with Solar PV Systems: Installing your own solar panel system can make electricity very cheap, especially after the solar panel system has paid for itself.
  • Future-Proof Against Rising Energy Prices: With the expectation that gas prices will remain high and electricity may become cheaper with renewable energy, solar systems offer financial security.

Environmental Impact

  • Reduces Carbon Footprint: By using solar energy, you reduce greenhouse gas emissions, supporting environmental sustainability.
  • Consistent Hot Water Supply
  • Efficient Use of Solar Energy: The system can be configured to use solar energy first, then grid electricity as a backup, ensuring a consistent hot water supply.
  • Adaptation to Sunless Days: Even during cloudy or sunless days, the booster element (electric or gas) can kick in to maintain the hot water supply.
  • Enhanced Property Value: The installation of a solar-powered electric hot water system can increase the property’s value due to its modern, energy-efficient technology.
  • Low Maintenance Requirements: Compared to conventional heating systems, solar-powered systems usually require less maintenance, although it’s wise to keep an eye on the system and keep it well-maintained to prevent unexpected booster usage.

By leveraging the power of the sun, solar-powered electric hot water systems offer significant cost savings, sustainability, and flexibility for homeowners. They represent an investment in both financial prudence and environmental responsibility.

Overview of Hot Water Systems

Electric and Solar Solutions

  • Electric Heat Pump and Solar Hot Water Systems: Offer the best overall savings despite initial costs.
  • Conventional Electric Hot Water System: Affordable to run if powered by personal solar panels.
  • Instantaneous Gas Hot Water Systems: Suitable if solar and electric are not viable, but consider environmental impacts and long-term running costs.

How Much is a Hot Water System?

Electric, gas, and solar systems range from $600 to $8000.

How Much Do They Cost to Run?

Dependent on technology and the type of system (storage tank or instantaneous).

Hot Water System Running Costs and Emissions

  • Heat Pump (Peak Tariff): $245–300 | 3.6 – 4.4 tonnes
  • Heat Pump (Off-Peak): $190–230 | 3.6 – 4.3 tonnes
  • Solar (Gas Boosted): $125–165 | 1.9 – 2.6 tonnes
  • Solar (Electric Boosted, Peak Tariff): $265–365 | 3.9 – 5.4 tonnes
  • Electric Storage (Peak Tariff): $730–915 | 10.8 – 13.5 tonnes
  • Gas Storage: $470–555 | 8.0 – 9.5 tonnes
  • Gas Instant: $305–400 | 5.0 – 6.6 tonnes

Typical running costs and emissions for a Melbourne household of 2–3 people.

Switching from Gas to Electric Hot Water

What are the reasons to switch? 

  • Health Concerns: Environmental and health risks with gas.
  • Running Costs: Gas may become the most expensive option by 2030.
  • Government Rebates: Available for switching to efficient models.
  • Energy Efficiency: Implement measures to save on hot water costs, such as water-efficient showerheads and shorter showers.

Look we don’t expect you to be an expert in hot water systems and understand the rebates on offer or whether you need an electric heat pump system or electric solar hot water system. We are the experts so contact usfor advice and prices. We are happy to help you work out the best hot water system for your home.

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