When your hot water dies, the two questions are always the same: do I repair or replace it, and what will a new one cost. Here is a straight 2026 guide to both, with indicative figures rather than a one-size number, because the right system depends on your home.
TL;DR
In Australia, expect roughly $1,200 to $2,500 for electric storage, $1,400 to $3,200 for gas, and $3,500 to $4,500 for a heat pump before rebates. Under 8 years old with a valve or element fault, repair. Over 10 years, or leaking from the tank, replace.
What each type costs (supply and install)
These are indicative 2026 ranges including GST, not a quote. The exact price depends on the unit, your existing connection, and access.
| Type | Installed cost | Running cost | Rebate |
|---|---|---|---|
| Electric storage | $1,200 to $2,500 | Dearest to run | None |
| Gas storage or continuous-flow | $1,400 to $3,200 | Storage loses heat from the tank; continuous-flow does not | None |
| Heat pump | $3,500 to $4,500 before rebates | About 30% of the energy of conventional electric | STCs, plus NSW incentive |
| Solar hot water | $3,000 to $6,000 | Depends on sun and booster | STCs |
Figures as at October 2026. A gas storage tank loses a lot of heat because it cannot be insulated where the flame heats it, while a continuous-flow unit has no tank to lose heat from. The NSW incentive is indicatively up to $640 when a heat pump replaces an electric water heater and up to $330 when it replaces a gas one. Rebate amounts change, so check what is current when you buy. For how the system types compare on energy use, see the Australian Government hot water systems page. Small-scale Technology Certificates (STCs) apply to solar water heaters and air source heat pumps. NSW heat-pump discounts sit under the hot water upgrade incentive (Energy Savings Scheme); we confirm what applies on the quote.
- Electric storage: $1,200 to $2,500. The cheapest to buy and quickest to swap. More expensive to run than the alternatives.
- Gas storage or continuous-flow: $1,400 to $3,200. Continuous-flow (instantaneous) never runs out and saves space; needs natural gas or LPG. Gas work must be done by a licensed gas fitter, which Josh is.
- Heat pump: $3,500 to $4,500 before rebates. Dearest up front, cheapest to run. Rebates and STCs bring the real cost down a lot (see our heat pump rebates guide).
- Solar hot water: $3,000 to $6,000. Roof collectors plus a tank and a gas or electric booster. Strong long-term saving on the Central Coast, higher install cost.
When gas still wins in NSW, and when it does not
Energy Consumers Australia’s household fuel choice analysis for NSW and the ACT compares the cost of gas and electric appliances over ten years. Its hot water findings:
- Hot water is your only gas appliance. When it fails, replacing it with a heat pump and getting off gas comes out ahead, because closing the gas connection removes its fixed charge. The report rates this a strong choice for small households and a good one for medium and large ones.
- You keep gas for cooking or heating. When the gas hot water fails, its verdict is “Stick with gas”. Efficient gas hot water uses relatively little energy, so a heat pump cannot really compete while the gas connection and its fixed charge stay.
- You already have rooftop solar. Existing solar improves the case for a heat pump, because some of the water heating can run on your own generation.
The report modelled Sydney, Armidale, Bega, Dubbo, Wagga Wagga and Canberra, not the Central Coast or Newcastle, so read it as a guide to the trade-off rather than a local price.
What moves the price
- Changing connection type. Going from electric to gas, or fitting a continuous-flow unit, can mean new gas or water lines and is more involved than a like-for-like swap.
- Where the unit lives. A tight or high spot, or moving the unit, adds labour.
- Removing the old unit. We take the old system away and dispose of it as part of the job.
- Tempering valve and compliance. Current rules require a tempering valve to limit the temperature at the tap; if yours is missing or old, it is replaced.
Repair or replace?
The honest rule of thumb:
- Under about 8 years old, single fault: repair. A failed element, thermostat or relief valve is a routine fix and usually worth it.
- Over 10 years old: lean towards replace. Once a tank is past its design life, throwing money at it rarely pays back.
- Leaking from the tank itself: replace. A rusted-through tank cannot be repaired, only patched, and it will fail again soon.
Two of our recent replacements: at a Blue Haven home we took out an old storage unit and installed the new system, and in Merewether a new Thermann electric storage unit went on the existing pad, valved and connected.
No hot water after hours? We are open 24 hours, 7 days. Josh is a licensed plumber and gas fitter on the Central Coast, so a gas unit is fitted and certified without a second trade.
We quote both the repair and the replacement, plus the running-cost difference, so you can decide with the real numbers in front of you. Request a callback or see our hot water systems service.