How Much Does a New Hot Water System Cost?

Replacing a hot water system usually costs $1,000 to $2,800 for a like-for-like electric or gas storage unit, including installation. Heat pump systems cost about $4,000 to $6,600 installed, and solar systems more again. When hot water fails without warning, the cheapest fix is usually replacing the same type of system you already have.

Here's what each type costs and how to decide quickly when you're without hot water.

Hot water system prices by type

Electric storage: $525 to $2,000 for the unit, plus $500 to $800 to install a replacement
Gas storage: $880 to $1,525 for the unit, plus $300 to $700 to install a replacement
Continuous flow gas (instant): $785 to $1,625 for the unit, plus installation
Heat pump: $3,000 to $4,000 for the unit, plus $1,000 to $2,600 to install
Solar with electric booster: $3,650 to $5,050+ for the unit, plus $3,000 to $7,000 to install
Solar with gas booster: $4,950 to $6,560+ for the unit, plus installation

Source: Yellow Pages hot water system prices, updated May 2026. Switching to a different type of system usually costs more than a like-for-like replacement, because of new plumbing, gas or electrical work.

Signs your hot water system is on its way out

Lukewarm or inconsistent water
Rusty or discoloured water from the hot tap
Leaks or pooling water around the base of the tank
Rumbling or popping noises
An older system. Many storage tanks last around 10 to 15 years.

If you spot these signs, get a plumber to check it before it fails completely. Replacing on your own timeline gives you time to compare quotes.

Which type should you choose?

Like-for-like is fastest and cheapest when your system has failed and you need hot water today.

Continuous flow gas heats water on demand, so you don't run out. It suits homes that already have gas.

Heat pump systems use far less electricity than a standard electric tank, and they're often eligible for rebates. They cost more upfront but can save on bills over time.

Solar can cut water heating costs the most in sunny areas, but it has the highest upfront cost.

Check for rebates

Government rebates are often available for eligible solar and heat pump systems. These include small-scale technology certificates (STCs), which are usually taken off the price by the installer, and some state programs. Rebates and warranties typically require a Clean Energy Council accredited installer. Check your state energy program before you buy.

How to save on a hot water replacement

Get at least two quotes, even in a hurry. Many plumbers can install the same day.
Ask for an itemised quote covering the unit, installation, removal of the old tank and any extra plumbing.
Check the warranty on the tank and the installation.
Choose the right size. A tank that's too big costs more to heat. Too small and you'll run out.
Ask about rebates if you're switching to a heat pump or solar.

When it can't wait

A cold shower is a problem you need fixed now, not next payday. If you can't cover the cost from savings, Jingle's emergency loans range from $500 to $10,000, with fixed repayments and no early repayment fees. Only borrow if the repayments fit your budget. Approval is not guaranteed.

Frequently asked questions

How much does it cost to replace a hot water system?

A like-for-like electric or gas storage replacement usually costs around $1,000 to $2,800 including installation. Heat pump and solar systems cost more.

How long does it take to install a new hot water system?

Most installations take 2 to 6 hours. Many plumbers can replace a failed system the same day.

How long do hot water systems last?

Many storage tanks last around 10 to 15 years. Continuous flow systems can last up to 20 years.

Is a heat pump worth it?

A heat pump uses much less electricity than a standard electric tank, so it can lower your bills. It costs more upfront, but rebates can help bring the price down.

Can I get a rebate on a new hot water system?

Rebates are often available for eligible solar and heat pump systems, usually through small-scale technology certificates and state programs. Check with your installer and state energy program.