How do i choose between a gas and electric hot water system? (2026)
Quick Answer
Choose based on your fuel availability, running-cost outlook, hot water demand, installation constraints and decarbonisation goals. Gas systems can suit homes with reliable gas supply and high peak demand, while electric systems are often simpler to install and can pair well with off-peak tariffs or solar, especially if you choose a heat pump water heater rather than standard electric resistance. Because both gas and hot water work involve safety and compliance issues, use this guide to narrow your choice, then get a licensed installer to assess your home.
Safety first
- Do not install, alter or disconnect gas appliances, gas pipework, relief valves, flues or combustion air arrangements yourself.
- Do not carry out electrical work on a hot water system unless you are licensed and authorised to do so.
- Be aware that stored hot water can cause scalding; temperature control and tempering requirements are installation matters for a qualified professional.
- Never block, remove or modify a water heater's relief valve, discharge arrangement, ventilation openings or flue components.
- If you smell gas, suspect a leak, or think combustion products may be entering the home, stop using the appliance if it is safe to do so and contact a qualified professional or your gas supplier's emergency guidance.
- Water heaters are heavy and may contain hot water under pressure; replacement and relocation work can create lifting, pressure and burn hazards.
When to call a professional: Stop and consult a qualified professional if you are changing fuel type, unsure about household demand, need to move the system, suspect electrical or gas supply upgrades are required, or the proposed location may need drainage, ventilation or flueing changes. Also get professional help immediately if you smell gas, see signs of overheating, or have leaking relief valves or pipework. In New Zealand, use licensed plumbers, gasfitters and electricians, and if you need help finding a verified local tradesperson you can check Trade Directory at tradedirectory.co.nz.
Overview
The best hot water system is not just the one with the lowest purchase price. A sensible choice balances four things: how much hot water your household uses, what fuels are available at your property, how efficient the system is, and what the installation will realistically involve. In broad terms, electric storage cylinders and heat pump water heaters are common where mains gas is not available or where owners want to reduce direct fossil fuel use. Gas storage and gas continuous-flow systems can be attractive where natural gas or LPG is already in place and the household wants fast recovery or long showers without waiting for a tank to reheat. The key practical difference is that "electric" covers more than one technology. Standard electric resistance water heating is usually simple but can be expensive to run depending on tariff and usage. Heat pump water heaters are also electric, but they work differently and are generally more efficient. On the gas side, continuous-flow units avoid storing a full tank of hot water, while gas storage systems keep hot water ready in a cylinder. The right choice depends on your site, not just the label. Check local energy options, ventilation and flue requirements, cylinder location, electrical capacity, and whether your plumbing can support the upgrade before deciding.
Who this is for
Homeowners, landlords and renovators comparing replacement or new domestic hot water systems, especially when choosing between gas and electric options for a house or small residential property.
What you’ll need
- Your recent electricity and, if relevant, gas or LPG bills
- Current hot water system details from the data plate or manual
- Basic notes on household size and peak hot water use
- Access to manufacturer product information for shortlisted models
- A licensed plumber and, where required, gasfitter or electrician for site-specific advice
Before you start
Check what fuel is actually available at your property, whether the existing system location can legally and safely take the new type, and whether you are replacing like-for-like or changing fuel. Also check if anyone in the household relies on long back-to-back showers, large baths, or simultaneous hot water use, because undersizing is one of the most common and expensive mistakes.
Step-by-step
- 1
Map your hot water use
Write down how many people live in the home, when hot water is used most heavily, and whether multiple taps, showers or appliances run at the same time. Note any specific habits such as filling large baths, high shower usage or frequent laundry loads.
Why: You need a realistic demand picture before comparing technologies. A system that looks cheap or efficient on paper can still be the wrong choice if it cannot meet your peak demand.
- 2
Check which energy options are practical on your site
Confirm whether you have mains gas, LPG only, or no gas option at all. For electric options, check whether your switchboard and supply can support the proposed system and whether you have time-of-use pricing or solar generation that could influence running costs.
Why: A theoretically good system is irrelevant if the fuel is unavailable or the installation upgrades are costly or impractical.
- 3
Compare the main system types, not just gas versus electric
Separate the options into standard electric storage, electric heat pump water heater, gas storage, and gas continuous-flow. Read the manufacturer information for each shortlisted model, including recovery or delivery capability, installation requirements, maintenance needs and warranty terms.
Why: Two systems that both use electricity, or both use gas, can perform very differently. Looking only at the fuel type can lead to the wrong choice.
- 4
Assess installation constraints
Look at where the unit would go, whether outdoor placement is possible, whether drainage, condensate handling or airflow may be needed for a heat pump unit, and whether flueing and ventilation may be needed for gas equipment. Also check access for future servicing and replacement.
Why: Many poor choices happen because buyers compare brochure features without checking whether the home can safely and legally accommodate the system.
- 5
Think in terms of whole-of-life cost
Compare purchase price, likely installation complexity, maintenance expectations and probable running costs using your own tariffs and likely usage. If you have solar PV, ask how much of the water heating load could realistically be shifted to solar generation rather than grid electricity.
Why: The cheapest unit to buy is not always the cheapest to own. Running costs and installation changes can outweigh the initial price difference.
- 6
Shortlist by your priorities
If your priority is lower direct emissions at home, simpler replacement where there is no gas, or making use of solar electricity, electric options may rise to the top, especially heat pumps. If your priority is strong continuous hot water and you already have gas infrastructure, gas may remain a contender. Remove any option that does not suit your household pattern or site constraints.
Why: A clear shortlist prevents you being swayed by a sales feature that does not solve your actual problem.
- 7
Get a licensed on-site assessment before you commit
Ask a qualified installer to confirm sizing approach, compliance requirements, location suitability, any needed upgrades, and the exact model assumptions behind the quote. Request that they explain any trade-offs between storage and continuous flow, gas and electric, and standard electric versus heat pump.
Why: Final selection depends on technical details that cannot be safely or reliably confirmed from a general guide alone.
Why this works
Choosing a hot water system is a matching exercise: household demand, available fuel, system efficiency and installation realities all need to align. When those factors are matched properly, you are more likely to get reliable hot water, acceptable running costs and a compliant installation.
Common mistakes to avoid
- Comparing only the purchase price and ignoring running costs, servicing and upgrade work
- Assuming all electric systems are the same and overlooking heat pump water heaters
- Choosing a system based on tank size or marketing claims without checking actual household demand
- Switching fuel type without checking ventilation, flueing, electrical capacity or cylinder location requirements
- Replacing a failing system in a rush without getting the installer to explain the sizing basis
- Assuming gas is always cheaper to run or electric is always greener without checking your tariffs, equipment efficiency and local energy mix
Troubleshooting
You cannot decide because quotes recommend different system types
Ask each installer to state the assumed household demand, site constraints, fuel assumptions and why they selected that type. Compare the reasoning, not just the headline quote.
The preferred gas option needs extra flueing or location changes
Ask whether an electric storage or heat pump option would avoid those building changes and how that affects whole-of-life cost.
The preferred electric option may need electrical upgrades
Get the installer and, if needed, an electrician to confirm whether the switchboard or circuit arrangement must change and include that in your comparison.
You are worried about running out of hot water
Discuss peak demand and recovery with the installer. If your household has long or overlapping usage, continuous-flow gas or a properly sized storage system may suit better than an undersized unit.
Compare your options
Electric storage
Best for: Homes wanting a straightforward replacement where gas is unavailable and upfront simplicity matters
Pros: Common and familiar; usually simpler to install than changing to gas; can sometimes work with off-peak electricity arrangements
Cons: Can be costly to run depending on tariff and usage; stored hot water is finite until the cylinder reheats; not as efficient as a heat pump water heater
Electric heat pump water heater
Best for: Homes wanting lower electricity use for water heating, especially where outdoor placement and suitable conditions are available
Pros: Generally more efficient than standard electric resistance water heating; can align well with solar PV; no onsite gas combustion
Cons: Higher upfront cost than basic electric storage in many cases; installation location and noise considerations matter; performance and suitability depend on site and product requirements
Gas storage
Best for: Homes with existing gas supply that want stored hot water with relatively quick reheating
Pros: Can recover faster than some standard electric storage systems; familiar technology; may suit households with repeated demand through the day
Cons: Needs safe gas installation and may require flueing or ventilation depending on model and location; still limited by tank capacity; involves onsite fuel combustion
Gas continuous-flow
Best for: Homes with gas supply that want hot water on demand without storing a full cylinder
Pros: No need to keep a large tank of water hot; good for long showers and continuous demand within the unit's rated capability; compact compared with storage cylinders
Cons: Output depends on the unit and incoming conditions; multiple simultaneous uses can still exceed capacity; gas supply and compliant installation are essential
| Option | Best for | Pros | Cons |
|---|---|---|---|
| Electric storage | Homes wanting a straightforward replacement where gas is unavailable and upfront simplicity matters | Common and familiar; usually simpler to install than changing to gas; can sometimes work with off-peak electricity arrangements | Can be costly to run depending on tariff and usage; stored hot water is finite until the cylinder reheats; not as efficient as a heat pump water heater |
| Electric heat pump water heater | Homes wanting lower electricity use for water heating, especially where outdoor placement and suitable conditions are available | Generally more efficient than standard electric resistance water heating; can align well with solar PV; no onsite gas combustion | Higher upfront cost than basic electric storage in many cases; installation location and noise considerations matter; performance and suitability depend on site and product requirements |
| Gas storage | Homes with existing gas supply that want stored hot water with relatively quick reheating | Can recover faster than some standard electric storage systems; familiar technology; may suit households with repeated demand through the day | Needs safe gas installation and may require flueing or ventilation depending on model and location; still limited by tank capacity; involves onsite fuel combustion |
| Gas continuous-flow | Homes with gas supply that want hot water on demand without storing a full cylinder | No need to keep a large tank of water hot; good for long showers and continuous demand within the unit's rated capability; compact compared with storage cylinders | Output depends on the unit and incoming conditions; multiple simultaneous uses can still exceed capacity; gas supply and compliant installation are essential |
Alternatives
- If you already have an electric cylinder and want lower running costs, compare replacing it with a heat pump water heater rather than switching to gas
- If fuel choice is constrained, improve efficiency first by reducing hot water demand through efficient fixtures and better usage habits
- If the property is being renovated, ask whether relocating the cylinder or changing plumbing layout could open up better system options
Pro tips
- Ask installers to quote the exact model and explain why it suits your household pattern
- Use your own energy tariffs when comparing likely running costs
- If you have or plan solar PV, ask specifically how the hot water system could be scheduled to use daytime generation
- Keep replacement urgency in mind: if the current unit is failing, shortlist practical options before it becomes an emergency
- Read the manufacturer installation and owner documentation before accepting a quote
Legal & regulatory notes
Hot water installation, gasfitting and most related electrical work are controlled activities and must comply with local building, plumbing, gas and electrical requirements. Requirements vary by country and region, including rules about relief valves, tempering, seismic restraint where applicable, ventilation, flueing and who may carry out the work. Check with your local authority and use appropriately licensed tradespeople.
What this guide does not cover: This guide helps you compare domestic gas and electric hot water system types at a practical level. It does not provide model-specific sizing, installation instructions, legal certification advice, exact running-cost calculations, or appliance commissioning steps. Always rely on the manufacturer documentation, local regulations and a licensed installer for the final specification and installation.
Cost considerations
Running cost depends heavily on your fuel tariff, system efficiency and usage pattern. Upfront cost also varies with whether you are replacing like-for-like or changing fuel type, because gas connections, flueing, ventilation, electrical upgrades, drainage or repositioning can materially change the installed cost. Compare total ownership cost rather than unit 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.
Frequently asked questions
Is gas or electric cheaper to run?+
There is no universal answer. It depends on your local electricity and gas or LPG prices, the efficiency of the specific unit, your usage pattern and whether you can use off-peak power or solar generation. Compare likely annual energy use using manufacturer information and your own tariffs.
Is a heat pump water heater the same as standard electric hot water?+
No. Both use electricity, but a heat pump water heater works differently from a standard electric resistance cylinder and is typically more efficient. Suitability depends on the model and site conditions, so ask the installer to confirm placement and performance assumptions.
Does continuous-flow gas mean unlimited hot water?+
It means hot water is produced on demand rather than stored, but it is still limited by the unit's rated delivery capability and the number of outlets being used at once. It is not truly unlimited in every household situation.
Should I switch from gas to electric when replacing an old system?+
Possibly, but only after checking installation implications and whole-of-life cost. Switching can make sense where gas is expensive, unavailable, being phased out locally, or where you want to pair water heating with solar electricity. It can also introduce new electrical or location requirements.
Can I choose the same size as my old cylinder and be done with it?+
Not safely as a rule of thumb. Household size, shower habits, appliances and the technology type all affect what is suitable. Use your old system only as a starting point, not the final answer.
Sources & references
Guidance on this page is traced to documented sources. Last checked 25 September 2026.
- WorkSafe New Zealand - Gas appliances and gasfitting safety information · government
Supports the safety point that gas work and gas appliance safety require qualified professionals and proper compliance.
- Electrical Workers Registration Board New Zealand · official
Supports the safety and legal point that prescribed electrical work must be done by appropriately registered and licensed people.
The decision principles stay fairly stable, but tariffs, local gas availability, product ranges and regional compliance requirements can change.