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The Big Switch: How Much Does It Cost to Change from Gas Hot Water to Electric?

Switching from a gas hot water system to an electric one can be a significant decision for homeowners. Whether you’re motivated by cost savings, environmental concerns, or simply looking for a more efficient solution, understanding the associated costs is crucial. Let’s break down what you can expect:

Changing Gas to Electric: Cost Comparison

The initial cost of switching from a gas hot water system to an electric one can vary widely based on several factors. Generally, the cost includes purchasing the new system, installation fees, and potential upgrades to your home’s electrical system to accommodate the new heater.

  1. Electric Storage Tank Systems: These typically cost between $650 and $2,600 for the unit alone. Installation costs usually range from $300 to $1,000, depending on the complexity of the job and any necessary electrical upgrades.
  2. Electric Instantaneous Systems: These are more compact and heat water on demand. Units cost between $600 and $1,800, with installation fees typically ranging from $300 to $1,000. These systems may require three-phase power, which most homes do not have, potentially adding to the installation cost​.
  3. Heat Pump Systems: Known for their efficiency, these systems use ambient air to heat water. They are more expensive, ranging from $2,200 to $6,900 for the unit, with average installation costs between $700 and $1,200.

Average Cost for Electric Hot Water Systems

The average cost to install an electric hot water system in Australia is influenced by the type and size of the system, as well as any additional work required for installation. Here’s a rough breakdown:

  • Electric Storage Tank: $1,000 to $3,600 (including installation)
  • Electric Instantaneous: $1500 to $2,800 (including installation)
  • Heat Pump: $3,000 to $8,100 (including installation)​.

Replacing a Water Heater: What to Expect

When replacing your water heater, expect the process to involve:

  1. Removal of the Old System: This is usually included in the installation cost but can add around $100 if not.
  2. Electrical Work: Upgrading your home’s electrical capacity to support the new system, especially for instantaneous models that require more power.
  3. Plumbing Adjustments: Modifying existing plumbing to fit the new system, which can add to labour costs.

Installation Costs for Hot Water Heaters

Installation costs vary significantly based on the complexity of the job and the type of system being installed. Here’s what you might expect:

  • Basic Installation: $300 to $1,000 for straightforward jobs.
  • Complex Installation: $1,000 to $2,500 if significant electrical or plumbing upgrades are needed.

Electric Hot Water Heater: Price Breakdown

The price of electric hot water heaters generally includes the following components:

  1. Unit Cost: $650 to $6,900, depending on the type and efficiency.
  2. Installation: $300 to $1,000 for standard installations.
  3. Additional Electrical Work: $500 to $1,500 if upgrading to three-phase power or making other significant electrical adjustments.

Factors Affecting Water Heater Replacement Cost

Several factors can influence the cost of replacing your water heater:

  1. System Type: Heat pump systems are more expensive but offer long-term savings.
  2. Electrical Upgrades: Necessary for high-demand systems like electric instantaneous heaters.
  3. Plumbing Adjustments: Needed if the new system doesn’t match the old system’s plumbing configuration.

Installing a Gas Water Heater: How Much Does it Cost?

If you’re considering sticking with or switching to a gas water heater, costs can vary:

  • Gas Storage Tank: $1,000 to $6,000 for the unit, with installation fees between $300 and $800.
  • Gas Instantaneous: $700 to $3,800 for the unit, with similar installation costs​ 

Comparing Prices: Gas vs Electric Water Heaters

When comparing gas and electric water heaters, consider the following:

  • Initial Cost: Electric systems tend to be cheaper upfront, especially storage tank models.
  • Running Costs: Gas systems generally have lower running costs, but electric systems can be more economical if paired with solar panels.
  • Efficiency: Electric systems, especially heat pumps, are often more energy-efficient than gas systems.

While the upfront expense can be significant, especially for high-efficiency systems like heat pumps, the long-term savings on energy bills and the potential for government rebates can make the investment worthwhile. Always consult with a professional to get accurate quotes and ensure that the system you choose meets your household’s needs and budget.

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