A bloke in Fairfield stood next to his 14 year old gas storage tank last month, water weeping out of the base, and asked me the question I get most: "Just put another gas one in?" Ten years ago I would have said yes without thinking. In 2026 the gas vs electric hot water decision is closer than most people expect, and the right answer depends on three things: what tariff you are on, what else in the house runs on gas, and whether you have solar on the roof. I fit both across South West Sydney every week, and there is no sales pitch here, just the maths I run on the driveway. If the shower is cold right now, we are a hot water plumber, no call-out fee, across Liverpool, Campbelltown and Camden.
On price per unit of heat, natural gas still beats full rate electricity, but an electric tank on off-peak controlled load closes most of the gap and a heat pump beats both by a wide margin. Gas network charges in Sydney are rising as customers leave, so if hot water is your last gas appliance, going electric usually wins. If you cook and heat with gas and want fast recovery, a gas system is still a sound choice. Every job is quoted before work starts.
Gas vs electric hot water: the short answer
Per unit of heat delivered, natural gas is still cheaper than electricity at the full daytime rate. But almost nobody heats water at the full daytime rate. An electric storage tank on an off-peak controlled load tariff uses the cheapest electricity sold, and a heat pump uses a quarter to a third of the electricity of an element for the same hot water. Add rising gas network charges and a daily gas supply charge you pay whether you shower or not, and the field tilts towards electric for most houses. Gas keeps its place where the house already runs on gas for cooking and heating, where fast recovery matters, and where there is no room or wiring for a big tank.
Running costs: how the maths actually works
Three numbers decide it. First, the cost of the fuel per unit of heat: gas in megajoules, electricity in kilowatt hours. Second, how efficiently the unit turns fuel into hot water. A gas storage tank loses heat up the flue and through its walls; a gas continuous flow unit is better because it only heats what you use; an electric element turns every kilowatt hour into heat but sits on the most expensive fuel unless it is on off-peak; a heat pump moves heat from the air rather than making it, which is why it wins. Third, the fixed charges. A gas account carries a daily supply charge before you burn a single megajoule. If the hot water system is the only gas appliance left, you are paying that every day for one tank, and that alone can make electric cheaper over a year.
Off-peak electric hot water on Endeavour Energy's network
Off-peak electric hot water is what makes an old fashioned element tank competitive. Around Liverpool, Ingleburn and Campbelltown the network is Endeavour Energy, and a storage tank can sit on controlled load 1, which is switched on for periods between 10pm and 7am, or controlled load 2, which allows up to 17 hours in a day at a slightly higher rate. The tank heats when the grid is quiet and the house runs on it the next day, which is why off-peak tanks are 250 or 315 litres. Some retailers now also offer a cheap daytime window built around solar exports, which suits a heat pump or a tank on a timer. If you already have the controlled load wiring, an electric tank or heat pump is the cheapest changeover you can do.
Where gas prices are heading
I am a plumber, not an economist, but the regulator has said it plainly. In its 2025 to 2030 decision for Jemena's Sydney gas network, the Australian Energy Regulator approved higher network revenue than the previous period and noted that declining demand is the key driver of rising future network prices. In plain English, as households leave gas, the cost of the pipes is shared among fewer customers and each bill goes up. The same decision cut the fee to permanently disconnect from the network from July 2026, so leaving is now cheaper than it was; your retailer quotes that fee. None of this makes gas a bad choice this year. It means a gas system bought today will probably cost more to run each year than the electric one next door.
Gas hot water systems vs electric hot water systems: installation, life and recovery
Here is how the four common options line up. Prices are supplied and installed figures from Sydney 2026 price guides; anything that changes fuel or location is quoted on inspection.
| Item | Gas storage | Gas continuous flow | Electric storage | Heat pump |
|---|---|---|---|---|
| Installed cost | $1,375 to $4,025 | Quoted on inspection | $920 to $2,875 | $3,450 to $6,900 before rebates |
| Rebates | None | None | None | Roughly $900 to $1,350 off |
| Running cost | Middle, plus daily gas charge | Lower than gas storage | High on full rate, low on off-peak | Lowest |
| Recovery | Fast | Never runs out | Slow, heats overnight | Slow |
| Typical life | 8 to 12 years | 15 to 20 years | 8 to 12 years | 10 to 15 years |
| Needs | Gas line, flue clearance | Bigger gas line, power point | Circuit, ideally controlled load | Circuit, airflow, quiet spot |
Electric hot water system prices sit at the bottom because the unit is simple and the changeover is quick. Gas storage costs more to buy and less to run than an element on full rate, and continuous flow costs more again up front but lasts longest. The heat pump is the expensive one until the rebates come off. The full breakdown, including what pushes a job to the top of each range, is in hot water system installation cost in Sydney.
What a fuel switch actually involves
Gas to electric is the common direction. The old gas line gets capped and pressure tested by a licensed gasfitter, an electrician runs a dedicated circuit (and connects controlled load if you want it), and the new tank or heat pump goes in with a tempering valve, relief valves and a compliance certificate. If the hot water was your last gas appliance, ring your retailer about closing the account and abolishing the meter so the daily charge stops. If you cook on gas, the account stays and the maths is less one sided.
Electric to gas is rarer and I talk most people out of it. It means running a new gas line, a flue position that clears windows and doors, sometimes a meter upgrade, and buying into a fuel whose network charges are rising. It makes sense in a house that already has gas heating and cooking and a family that empties tanks. Either direction is licensed plumbing, gasfitting and electrical work in NSW, and the gas side in particular is not a handyman job; a bad flue or an untested joint is a carbon monoxide or leak risk, which is why I wrote what to do if you smell gas.
Heat pump vs gas hot water: the third option
If you are on gas and thinking about electric, the real comparison in 2026 is heat pump vs gas hot water, not element tank vs gas. A heat pump costs more than a gas tank up front, but federal STCs and the NSW hot water upgrade incentive take roughly $900 to $1,350 off, it runs on a fraction of the electricity, and it pairs with solar panels through a daytime timer. What you give up is fast recovery and silence; it has a fan and a compressor and needs a spot with airflow away from bedrooms. I go through placement, noise and the rebate rules in heat pump hot water systems explained. For a house with no gas at all, the choice is simply heat pump or element tank, and the heat pump wins unless you live alone or have nowhere quiet to put it.
When to call a plumber
Call when your gas or electric tank is past ten years old and you would rather choose its replacement calmly than at 6am with a wet garage floor. Call if a gas unit's pilot keeps going out, the flue is stained or the burner sounds wrong; those are business-hours jobs but they are not DIY. Call straight away, day or night, if you smell gas (turn it off at the meter first) or if a tank is pouring rather than dripping. And call before you sign anything from a door knocker promising a free changeover: some of those offers are fine, some skip the tempering valve, the certificate and the co-payment, and I will tell you which is which. Done right. Done once.
Monarch Civil & Plumbing covers South West Sydney and the Macarthur region from our base in Austral, and I hold the plumbing, drainage and gasfitting licence, so the gas side of a changeover is done properly and the electrical side is organised with a licensed electrician. For a gas or electric hot water installation, a heat pump changeover, or any other plumbing service, from a plumber in Fairfield to Liverpool and out to Camden, ring 0455 222 292. I am a South West Sydney plumber who fits both fuels, so the advice you get is about your house, not about what is on the truck.
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
Is gas or electric hot water cheaper to run in Sydney?
Per unit of heat, natural gas is cheaper than full rate electricity, but an electric tank on off-peak controlled load closes most of that gap and a heat pump beats both by a wide margin. Add the daily gas supply charge, which you pay whether you use hot water or not, and for a house where hot water is the only gas appliance the electric options usually win over a year.
What is off-peak electric hot water and can I get it?
It is a controlled load tariff where the network switches your tank's element on during quiet hours at a cheap rate. On Endeavour Energy's network, which covers Liverpool to Campbelltown and Camden, controlled load 1 runs for periods between 10pm and 7am and controlled load 2 allows up to 17 hours a day. It needs a separate circuit and metering, which an electrician and your retailer arrange, and the tank must be big enough to last the day.
Are gas prices going up in NSW?
Network charges are. The Australian Energy Regulator's 2025 to 2030 decision for Jemena's Sydney gas network approved higher revenue than the previous period and said declining demand is the key driver of rising future network prices, because fewer customers share the cost of the pipes. The same decision made it cheaper to permanently disconnect from July 2026. Retail gas prices move with the market on top of that.
What does it cost to switch from gas to electric hot water?
Sydney 2026 price guides put an electric storage tank supplied and installed at $920 to $2,875 and a heat pump at $3,450 to $6,900 before rebates of roughly $900 to $1,350. On top of a like for like price you have the gasfitter capping and testing the old line, an electrician running a circuit, and possibly abolishing the gas meter through your retailer. I quote the whole job on inspection before any work starts.
Should I replace my gas hot water system with a heat pump?
If you are ready to get off gas, or hot water is your last gas appliance, usually yes. The NSW incentive applies to replacing gas, at a lower amount than replacing electric, and the running cost drop is large. Size the tank properly because a heat pump recovers slowly, and find it a spot with airflow away from bedrooms. If you cook and heat on gas and like fast recovery, a gas continuous flow unit is still a fair choice.
Can I install a gas or electric hot water system myself in NSW?
No. Plumbing, drainage and gasfitting work in NSW must be done by a licensed tradesperson regardless of the cost of the job, and the hard wired electrical side needs an electrician or a plumber with the disconnect and reconnect endorsement. A compliant install includes a tempering valve, relief valves and a certificate, and the NSW heat pump incentive will not pay without one. DIY is limited to things like tap washers.
Licensed plumber and drainer based in Austral, 13+ years in the trade, working across Liverpool, Fairfield and the Macarthur region. About Paul