A family in Casula with three teenagers rang me in July because the fourth shower of the morning was cold every day. Their 135 litre gas storage tank was doing exactly what it was built to do; it just could not keep up with four people washing their hair before 7:30. The fix was a 26 litre continuous flow hot water system on the same wall, plus a bigger gas line nobody had budgeted for. I fit both types across South West Sydney every week, and neither is "better". Continuous flow vs storage comes down to the house. Here is how I decide. If the shower is cold right now, we are a hot water plumber, no call-out fee, across Liverpool, Campbelltown and Camden.
A continuous flow (instant) hot water system heats water only as you use it, so it never runs out but is limited by litres a minute; a storage tank holds a set amount at 60°C and refills slowly. Busy families with two bathrooms and a gas supply do well on a 26 or 32 litre continuous flow unit. Households on off-peak electricity, with staggered showers, or without gas are usually better on a tank or a heat pump. Both are quoted before work starts.
Continuous flow hot water system vs storage tank: the difference
A storage tank heats a fixed volume of water, holds it at 60°C or more, and reheats as you draw it off. Use it faster than it can recover and you run out. A continuous flow unit (an instant hot water system or instantaneous hot water system, same thing) has no tank at all. Open a hot tap and a flow sensor fires a gas burner or, less often, an electric element, and the water is heated as it passes through a heat exchanger. Shut the tap and it stops. You never run out of hot water, but the unit can only heat so many litres a minute, and that number is the whole story.
Flow rates: litres a minute is the number that matters
Continuous flow units are rated in litres a minute at a 25°C temperature rise. The common gas sizes are 16, 20, 26 and 32. Mains water in Prestons in July arrives at about 12 to 15°C and you want roughly 40°C at the shower, so winter is close to that 25 degree rise and the rating is honest. A water efficient shower head runs at 9 litres a minute or less, so a 26 carries two showers and a basin at once in winter, and a 32 carries three bathrooms or two showers plus the washing machine. A 16 suits a one bathroom house or a granny flat. The sizing tables are in what size hot water system do I need.
There is a minimum too. The unit needs a couple of litres a minute passing through before the burner fires, so a basin tap opened to a trickle can stay cold.
The cold water sandwich
This is the thing owners of instant gas hot water systems ask me about most. You turn the shower off for a moment, turn it back on, and get hot water, then a slug of cold, then hot again. When the tap shuts the burner stops, and the water sitting in the heat exchanger cools a little. Open the tap and that cool slug arrives between the hot water already in the line and the fresh hot water the unit is now making. It is normal and short; a long pipe run makes it worse. A recirculation loop or a small buffer tank cures it, at a cost, and I only suggest that on a big house with a long run to the main bathroom.
The gas line nobody budgets for
A 26 litre continuous flow unit is rated at close to 200 megajoules an hour flat out. The gas storage tank it replaces burned something like 30 to 40. The old line was sized for the tank, plus the cooktop and heater sharing it, so it is often too small for the new unit. Undersized pipe starves the burner at full demand, the unit turns itself down, and the second shower goes lukewarm, which then gets blamed on the unit. Sometimes the gas meter needs upgrading too, which goes through your retailer and Jemena. Sizing and running that line is licensed gasfitting, and it is the biggest reason a continuous flow quote comes in above the price on the box.
Instant electric hot water systems
An instant electric hot water system does the same job with an element instead of a burner, and physics is the limit. A single phase unit will run a basin or a kitchen sink; a whole house unit needs three phase power and 18 to 27 kilowatts, which gives roughly 10 to 15 litres a minute in winter, one decent shower. In a family home without gas, an electric tank on off-peak or a heat pump nearly always beats it. It shines at a distant basin, a studio or an outdoor kitchen.
Running costs: standing losses versus off-peak power
A storage tank loses heat through its walls all day and night, whether you use hot water or not, and the burner or element tops it back up. A continuous flow unit has no standing loss and only heats what you use, and gas units carry 5 to 7 star energy ratings against 4 to 5 for gas storage. For a couple who are out all day, that gap is real. For a big household that empties the tank daily, standing loss is a small share of the bill and the gap shrinks.
Electric storage changes the maths again. Most tanks around Liverpool and Campbelltown sit on Endeavour Energy's controlled load 1, which heats overnight between 10pm and 7am at the cheapest rate there is, or controlled load 2, which allows up to 17 hours a day. A big tank on off-peak is cheap to run even though an element is not efficient, and a heat pump on the same tariff, or on a daytime timer with solar panels, is cheaper still. I compare the fuels properly in gas vs electric hot water.
Continuous flow hot water cost against a tank
Sydney 2026 price guides put an electric storage system supplied and installed at $920 to $2,875 and gas storage at $1,375 to $4,025. Gas continuous flow I quote on inspection, because the unit is only part of it: the gas line, the flue clearances, the power point for its electronics, moving from a tank position to a wall, and a tempering valve where the rules require one all move the price.
| Item | Gas continuous flow | Gas storage | Electric storage | Heat pump |
|---|---|---|---|---|
| Installed (Sydney 2026 price guides) | Quoted on inspection | $1,375 to $4,025 | $920 to $2,875 | $3,450 to $6,900 before rebates |
| Runs out? | Never, within its litres a minute | Yes, recovers fast | Yes, recovers overnight on off-peak | Yes, recovers slowly |
| Standing heat loss | None | Some | Some | Some |
| Works in a blackout | No, needs power for the controls | Yes, if it has a pilot light | Only what is already in the tank | Only what is already in the tank |
| Typical life | 15 to 20 years | 8 to 12 years | 8 to 12 years | 10 to 15 years |
Who each system suits
Continuous flow suits a house on natural gas with two or more bathrooms and a morning rush, a couple who use little hot water and hate paying to keep a tank warm, and any block with nowhere sensible to stand a tank. The new estates around Gregory Hills and Oran Park are full of them for that last reason.
A storage tank suits a house with no gas, a household already wired for controlled load, anyone who wants hot water in a blackout, and a family whose showers are spread across the day rather than stacked up before school. If you are replacing an electric tank, price the heat pump first, because the rebates make it the cheapest of the lot to own. And if your only problem is running out, a bigger tank is sometimes the cheapest answer of all.
When to call a plumber
Call me before you buy a unit online, not after. The size, the gas line and the flue position decide whether it works, and I can tell you most of that from a couple of photos and the number of bathrooms. Call when your tank is past ten years and you would rather change over on your terms than in a cold week in June. Call straight away if you smell gas near the unit or a tank is leaking from the base. An error code and no hot water is unpleasant but can usually wait until morning, and I'll say so on the phone rather than have you sitting up for a night call-out. Done right. Done once.
Installing or replacing either type is licensed plumbing and gasfitting work in NSW (the electrical connection on an electric unit is a sparky's job), and it ends with a compliance certificate. Monarch Civil & Plumbing covers South West Sydney and the Macarthur region from our base in Austral. For a continuous flow or storage hot water installation, a changeover as part of a renovation or new build, or an emergency plumber when the hot water has failed, from a plumber in Casula to Gregory Hills, ring 0455 222 292. I am a South West Sydney plumber and I will tell you which system suits your house before I quote it.
Related guides: hot water system installation cost.
Need it sorted? Ring 0455 222 292 any hour or book online. Monarch Civil & Plumbing is a hot water plumber, no call-out fee: repairs where they are worth it, same-day replacement where we can, and the NSW rebate sorted.
No hot water in Campbelltown, Liverpool or Camden?
Campbelltown has its own page: hot water service Campbelltown. For Liverpool, Camden and the rest of South West Sydney start with hot water systems, then the suburb pages plumber Liverpool and plumber Camden. Same-day replacement for common electric and gas sizes where stock allows, no call-out fee, NSW rebate sorted for heat pumps.
Frequently asked
What size continuous flow hot water system do I need?
Count the outlets that run at the same time in winter. A 16 litre unit suits one bathroom or a granny flat, a 20 a small family with one and a half bathrooms, a 26 two bathrooms and four or five people, and a 32 three bathrooms or two showers plus the washing machine together. Ratings are at a 25 degree rise, which is about what a Sydney July demands, so size for winter and summer looks after itself.
Is a continuous flow hot water system cheaper to run than storage?
Usually, on gas, because there is no tank losing heat all day and gas continuous flow units carry higher star ratings than gas storage. The saving is biggest for small households that use little hot water. For a big family that drains a tank daily the gap is small, and an electric tank on off-peak controlled load or a heat pump can be cheaper to run than either gas option.
Why does my instant hot water go cold then hot again?
That is the cold water sandwich. When you shut a tap the burner stops and the water left in the heat exchanger cools slightly. Open the tap again and that cool slug arrives between the hot water already in the pipe and the fresh hot water. It is normal and short, worse on a long pipe run, and a recirculation loop or small buffer tank fixes it if it genuinely bothers you.
Do I need a new gas line for a continuous flow hot water system?
Often, yes. A 26 litre unit is rated at close to 200 megajoules an hour at full demand, while the storage tank it replaces burned around 30 to 40. A line sized for the old tank starves the new unit and the second shower goes lukewarm. I check the pipe size, the run length and what else shares the line before I quote, and sometimes the meter needs upgrading through your retailer as well.
Can I get an instant electric hot water system for the whole house?
You can, but it needs three phase power and an 18 to 27 kilowatt unit, which gives roughly 10 to 15 litres a minute in winter, about one good shower. Single phase units suit a basin or kitchen sink only. For a family home without gas, an electric storage tank on off-peak or a heat pump nearly always works out better. Electric instantaneous is ideal for a distant basin, a studio or an outdoor kitchen.
Will a continuous flow hot water system work in a blackout?
No. Gas continuous flow units need mains power for the flow sensor, ignition and fan, so a power outage means no hot water until the power is back. A gas storage tank with a pilot light keeps working, and an electric tank or heat pump gives you whatever is already hot in the tank. If blackouts are common on your street, that is a point in favour of storage.
Licensed plumber and drainer based in Austral, 13+ years in the trade, working across Liverpool, Fairfield and the Macarthur region. About Paul