Plumbing

Continuous flow vs storage hot water cylinders compared (2026)

Partially verified

Quick Answer

A continuous flow system heats water only when you open a tap, while a storage hot water cylinder heats and stores water ready for use. Continuous flow usually suits homes that want to avoid running out of hot water and have enough gas or electrical capacity, while storage cylinders often suit homes that value simpler replacement, lower peak demand, or easy use with off-peak tariffs and some renewable setups. The better choice depends on your household’s hot water patterns, fuel type, space, pressure, and the condition of your existing plumbing.

Overview

The main practical difference is how each system delivers hot water. A storage cylinder keeps a volume of hot water ready in a tank, so it can usually supply water immediately until the stored volume is used. A continuous flow unit, sometimes called tankless, heats water as it passes through the appliance, so there is no stored reserve to run out in the same way, but output is limited by the unit’s flow capacity and incoming water temperature. For day-to-day use, storage cylinders are often straightforward if you already have one in place and your household uses hot water in bursts such as showers, baths and laundry. They do, however, lose some heat while standing and eventually empty if demand is heavy. Continuous flow systems save space and avoid standing heat loss, but they can struggle if too many outlets run at once or if the appliance is undersized. The best choice is usually decided by four things: how many people use hot water at the same time, whether your home uses gas or electricity, whether the existing pipework and flue or wiring are suitable, and whether you want the simplest like-for-like replacement or a bigger system change. Because installation requirements vary, treat this as a planning guide and confirm details with the manufacturer and a licensed plumber or gasfitter before buying.

Who this is for

Homeowners, landlords and renovators comparing replacement or new hot water systems, especially where they need practical guidance on suitability rather than brand recommendations.

What you’ll need

A list of your household’s hot water habits
Details of existing fuel type and appliance location
Access to the current system’s manual or data plate if available
Quotes or advice from a licensed plumber, and a gasfitter if gas is involved
Manufacturer installation literature for any shortlisted system

Before you start

Check what system you already have, what fuel it uses, whether hot water demand overlaps at showers, kitchen and laundry, and whether the property has the space, ventilation, drainage, wiring and pipe capacity needed for a different type of unit. If you are changing from one system type to another, ask early about flueing, gas supply sizing, electrical supply, pressure compatibility and any cylinder seismic or structural requirements that apply locally.

Step-by-step

1
Work out your real hot water demand
List how many bathrooms the home has, how many people live there, and which hot water outlets are likely to run at the same time. Note whether you often have back-to-back showers, fill baths, run the dishwasher or do laundry during peak times.
Why: This is the biggest factor in choosing correctly. A system that looks efficient on paper can still perform badly if it cannot meet your peak usage pattern.
2
Check your existing fuel and services
Confirm whether the home currently uses mains gas, bottled gas or electricity for water heating. Also check whether the existing location has suitable pipework, electrical supply, drainage and, for gas appliances, a compliant flue path and ventilation arrangement as specified by the manufacturer and local rules.
Why: Changing energy source or appliance type can turn a simple replacement into a larger upgrade with extra installation complexity.
3
Compare space and placement needs
Measure the available installation space and think about practical access for maintenance and future replacement. A storage cylinder needs room for the tank and associated valves, while a continuous flow unit is compact but still needs the right clearances and, depending on model, suitable internal or external positioning.
Why: A system that fits your demand is no use if it cannot be safely or legally installed in the available location.
4
Match the system type to your priorities
Choose a storage cylinder if you want a familiar setup, potentially simpler replacement where a cylinder already exists, or a stored reserve of hot water. Choose continuous flow if you want to save space, avoid stored hot water running out in the usual sense, and are confident the unit can meet simultaneous demand.
Why: The right answer depends on what matters most to you: simplicity, recovery, space, efficiency, or peak-use performance.
5
Check compatibility with your plumbing setup
Ask whether your home has mains pressure or another pressure arrangement, and whether your fixtures and pipework suit the replacement system. If you are replacing an older low-pressure setup, ask what else may need changing, including valves, mixers and pipe sizing.
Why: Poor compatibility can lead to disappointing flow, uneven temperatures or extra hidden work after installation starts.
6
Review running-cost and maintenance implications
Compare not just purchase and installation cost, but likely energy use, heat loss, servicing needs, and expected lifespan under your water quality conditions. Ask the installer and manufacturer what maintenance is recommended, especially in hard-water areas.
Why: The cheapest unit to buy is not always the cheapest to own, and maintenance needs differ between technologies.
7
Get a professional site-specific recommendation before buying
Have a licensed professional assess the property before you commit to a model. Ask them to confirm sizing, placement, pipework suitability, pressure considerations, flueing or electrical requirements, and any changes needed to meet local rules and manufacturer instructions.
Why: This avoids the common mistake of buying a unit based on marketing claims rather than site conditions.

Why this works

Storage cylinders trade standby heat loss and finite stored volume for simple delivery and a ready reserve. Continuous flow units trade storage for on-demand heating, which reduces standing losses and saves space, but they can only heat water up to the unit’s designed output at any one time. Matching the system to peak demand, fuel availability and installation constraints is what makes the choice work in practice.

Common mistakes to avoid

Choosing continuous flow purely because it is described as endless hot water, without checking simultaneous flow demand
Replacing a cylinder with a different system type without checking gas supply, flueing, wiring, pressure and pipe compatibility
Assuming the existing location is suitable for any new appliance
Ignoring maintenance needs in hard-water areas
Comparing only purchase price and not installation complexity or running costs
Undersizing the system for households with multiple bathrooms or frequent overlapping use

Troubleshooting

Hot water runs cool when two or more outlets are used at once

Have the system capacity and plumbing layout checked. This is commonly a sizing issue with continuous flow units, but storage systems can also struggle if demand exceeds the cylinder’s recovery and stored volume.

Long wait for hot water at distant taps

Ask a plumber to assess pipe run length, layout and whether a recirculation or redesign approach is appropriate for the property.

Water pressure seems worse after replacement

Check that the new system matches the home’s pressure setup and that valves, mixers and pipework are suitable. Pressure mismatches often need professional correction.

Energy bills seem higher than expected

Review thermostat settings where applicable, usage patterns, heat loss from stored systems, and whether the installed system is the right type and size for the household.

Compare your options

Continuous flow hot water

Best for: Homes wanting compact equipment, on-demand heating and no stored tank, especially where gas supply or suitable electrical infrastructure is available and simultaneous demand is modest or correctly sized for.

Pros: Saves space; avoids standing heat loss from stored water; does not run out of stored hot water in the usual sense; can be a good fit for households with irregular usage.

Cons: Must be correctly sized for peak flow; performance depends on incoming water temperature and number of outlets used together; installation can be more complex when changing from another system type; some models need particular flueing or power arrangements.

Storage hot water cylinder

Best for: Homes wanting a familiar setup, straightforward like-for-like replacement, or a stored reserve for short periods of high use.

Pros: Simple concept; often easier to replace with a similar system; can cope well with bursts of demand until stored volume is used; broad range of fuel and tariff arrangements depending on system type.

Cons: Stored water eventually runs out under heavy use; standing heat loss can increase energy use; takes more space; tank and associated components may need periodic maintenance and eventual replacement.

Option	Best for	Pros	Cons
Continuous flow hot water	Homes wanting compact equipment, on-demand heating and no stored tank, especially where gas supply or suitable electrical infrastructure is available and simultaneous demand is modest or correctly sized for.	Saves space; avoids standing heat loss from stored water; does not run out of stored hot water in the usual sense; can be a good fit for households with irregular usage.	Must be correctly sized for peak flow; performance depends on incoming water temperature and number of outlets used together; installation can be more complex when changing from another system type; some models need particular flueing or power arrangements.
Storage hot water cylinder	Homes wanting a familiar setup, straightforward like-for-like replacement, or a stored reserve for short periods of high use.	Simple concept; often easier to replace with a similar system; can cope well with bursts of demand until stored volume is used; broad range of fuel and tariff arrangements depending on system type.	Stored water eventually runs out under heavy use; standing heat loss can increase energy use; takes more space; tank and associated components may need periodic maintenance and eventual replacement.

Alternatives

Heat pump water heating where climate, space and installation conditions suit
Solar water heating with suitable backup heating
Keeping the same system type but improving insulation, controls or pipe layout

Pro tips

Base the decision on peak simultaneous use, not just household size.
If replacing an old cylinder, ask whether hidden upgrades will be needed before comparing quotes.
Keep the appliance manual and warranty details after installation.
Ask specifically how the proposed system will perform if two showers and the kitchen tap are used at once.
In hard-water areas, ask what maintenance the manufacturer recommends to protect efficiency and lifespan.

Safety notes

Do not install, alter or disconnect gas appliances, flues, safety valves or fixed electrical connections yourself.
Stored hot water systems use pressure and temperature safety devices that must be installed and maintained correctly.
If you notice gas smell, water leaks, scorching, unusual noises or inconsistent water temperature, stop using the system as far as practical and seek professional help.

Legal & regulatory notes

Installation and replacement of hot water systems usually involve regulated plumbing, gasfitting and sometimes electrical work. Requirements vary by country and local authority, and manufacturers’ instructions form part of correct installation practice. In New Zealand, use appropriately licensed tradespeople for restricted work and check local building and plumbing requirements before changing system type.

What this guide does not cover: This guide compares system types at a practical level. It does not size a specific appliance, assess exact running costs, interpret local code requirements for your address, or replace the manufacturer’s installation instructions and a licensed professional’s site inspection.

Cost considerations

A like-for-like replacement is often simpler and can reduce installation labour. Converting from a storage cylinder to continuous flow, or changing fuel type, may add significant costs for pipework, flueing, wiring, switches, valves, drainage or fixture upgrades. Running costs depend on fuel, tariff, demand pattern, water temperature rise and system efficiency, so ask for a whole-of-life comparison rather than purchase price alone.

Prefer to hire a professional?

If this job is beyond a confident DIY — or the work needs to be done by a licensed professional — you can find a verified plumber through these directories of real, verified trade businesses. Compare local tradespeople, read their details and request quotes before you commit.

Find a plumber in New Zealand on Trade Directory (tradedirectory.co.nz) Find a plumber in Australia on Aussie Trade Directory (aussietradedirectory.com)

Frequently asked questions

Does continuous flow really mean endless hot water?+

It means the unit heats water as you use it rather than relying on a stored tank. In practice, hot water is only as good as the unit’s capacity, incoming water temperature and how many outlets are used at once.

Is a storage cylinder less efficient?+

It can lose heat while storing water, which continuous flow avoids. But real-world efficiency depends on the specific product, how often you use hot water, the fuel source, insulation, maintenance and installation quality.

Which is better for a large family?+

Neither is automatically better. A large family with overlapping showers and laundry needs either a correctly sized continuous flow setup or a storage system with enough stored volume and recovery to meet peaks.

Can I swap from a cylinder to continuous flow easily?+

Sometimes, but not always. The ease depends on fuel supply, electrical capacity, flue route, pressure setup, appliance location and whether your existing plumbing suits the change.

When should I keep the same type of system?+

If the current type meets your needs and the goal is a straightforward replacement with fewer changes to the home’s services, staying with the same system type can be the lowest-risk option.

Sources & references

Guidance on this page is traced to documented sources. Last checked 25 September 2026.

Rinnai New Zealand - Continuous flow water heaters · manufacturer
Supports the general operating principle of continuous flow systems and the need to consider flow demand, placement and manufacturer installation requirements.

The basic comparison changes slowly, but installation requirements, available products and energy-tariff advantages can change over time and by region.