Cheapest Instant Hot Water System to Run in Australia
Everyone asks which unit is cheapest to run. The honest answer depends on one thing you already have, or do not have: a gas meter.
The cheapest hot water system to run in Australia, out of the instant units we sell, is the Midea M20 gas continuous flow unit on a home that already has mains natural gas connected. It costs about 37 cents per winter shower in Sydney, roughly half what an electric instant unit costs for the same shower, and the unit itself is $749. If your house has no gas, or hot water would be the only gas appliance, the sums flip, and a Stiebel Eltron electric instant unit is the cheaper long term buy.
Want your exact size? Our instant hot water sizing calculator works out the kW or litres a minute you need in winter, checks single or 3-phase power, then shows the units that fit.
Our picks for the lowest running cost
The Midea M20 is the cheapest instant hot water system to run for homes on mains gas, and the Stiebel Eltron DEL 27 Plus is the cheapest sensible choice for all electric homes.
- Cheapest to run with mains gas: Midea M Series M20, $749. 6.7 star energy rating, 89.1% thermal efficiency, 20 litres a minute. Two showers at once in warm cities. View the Midea M20 →
- Cheapest to run with gas in a cold city: Midea M Series M26, $849. 6.5 star, 86.6% efficiency, 26 litres a minute for Melbourne, Adelaide and Canberra families. View the Midea M26 →
- Cheapest to run with no gas: Stiebel Eltron DEL 27 Plus, $1,399. 28 kW, 3 phase, ECO mode and a live power readout so you can see what each shower costs. No gas supply charge, ever. View the DEL 27 Plus →
- Cheapest for a granny flat or a far ensuite: Stiebel Eltron DHC-E 8/50, $915. 9.5 kW single phase, sits under the basin, stops you paying to heat water that goes cold in a long pipe. View the DHC-E 8/50 →
Prices current as of October 2026, AUD including GST, unit only. Installation not included.
Running cost per shower: gas vs electric instant
An 8 minute winter shower in Sydney costs about 37 cents on a Midea M20 running mains natural gas, about 64 cents on the same unit running bottled LPG, and about 75 cents on any electric instant unit.
The maths is simple. A Sydney winter shower at 9 litres a minute and 40°C needs about 17 kW of heat. Eight minutes of that is 2.27 kWh, or 8.2 megajoules (MJ) of heat in the water. Electric instant units turn close to every unit of electricity into heat, so you pay for 2.27 kWh. The M20 is 89.1% efficient, so it burns about 9.2 MJ of gas to deliver the same shower.
| System | Energy bought per shower | Assumed price | Cost per 8 min Sydney winter shower |
|---|---|---|---|
| Midea M20 on mains natural gas | About 9.2 MJ | 4 cents per MJ | About 37c |
| Midea M26 on mains natural gas | About 9.4 MJ | 4 cents per MJ | About 38c |
| Midea M20 on bottled LPG | About 9.2 MJ | 7 cents per MJ | About 64c |
| Any Stiebel Eltron electric instant unit | About 2.27 kWh | 33 cents per kWh | About 75c |
Worked estimates using a 9 litre a minute shower head and typical Sydney winter mains temperature. Gas and electricity prices vary widely by state, retailer and plan; swap in the usage rates from your own bills. Prices current as of October 2026.
Per shower, gas wins. Clearly. But per shower is not how your bills arrive.
The gas supply charge decides the winner
The daily gas supply charge is the single biggest factor in whether gas or electric instant hot water is cheaper to run, because it is charged every day whether you heat a litre or not.
Supply charges commonly land somewhere around 70 cents to a dollar a day. Call it $290 a year. If you already cook on gas or run a gas heater, you are paying that charge anyway, so the hot water rides along for free on the meter. If hot water would be the only gas appliance in the house, the full $290 belongs to the hot water system, and most of gas's advantage evaporates.
Bottled LPG has no daily supply charge, but it costs close to twice as much per megajoule as mains gas, plus bottle rental. On LPG, gas continuous flow and electric instant end up within a coffee a week of each other.
Yearly running cost for a three person household
A three person Sydney household pays about $360 a year to run a Midea M20 on mains gas it already has, about $650 if hot water is its only gas appliance, about $670 on LPG, and about $725 on electric instant.
| Setup | Energy per year | Fixed charges for hot water | Rough yearly cost |
|---|---|---|---|
| Midea M20, mains gas already connected | About 8,900 MJ | Nil (already paid for cooking or heating) | About $360 |
| Midea M20, gas connected only for hot water | About 8,900 MJ | About $290 supply charge | About $650 |
| Midea M20 on LPG bottles | About 8,900 MJ | About $50 bottle rental | About $670 |
| Stiebel Eltron electric instant (any size) | About 2,200 kWh | Nil | About $725 |
Worked estimates for a Sydney climate, one 8 minute shower per person per day plus basins and the kitchen sink, at 4 cents per MJ mains gas, 7 cents per MJ LPG and 33 cents per kWh electricity. Add roughly 10 to 15 percent for Melbourne or Canberra. Prices current as of October 2026.
The full electric breakdown by city and household size is in our guide to electric instant hot water running cost.
Ten year cost: purchase price plus running cost
Over ten years, a $749 Midea M20 on existing mains gas costs about $4,300 all up, while a $1,399 Stiebel Eltron DEL 27 Plus costs about $8,650, so the gas unit saves roughly $4,000 in a house that already has gas.
| Unit and setup | Unit price | 10 years of running | 10 year total (unit plus energy) |
|---|---|---|---|
| Midea M20, existing mains gas | $749 | About $3,600 | About $4,300 |
| Midea M20, gas only for hot water | $749 | About $6,500 | About $7,200 |
| Midea M20 on LPG | $749 | About $6,700 | About $7,500 |
| Stiebel Eltron DHB-E 18 LCD (warm cities) | $1,139 | About $7,250 | About $8,400 |
| Stiebel Eltron DEL 27 Plus | $1,399 | About $7,250 | About $8,650 |
Worked estimates for a three person Sydney household at today's energy prices, unit prices current as of October 2026, installation excluded. Real energy prices will move over ten years; the gap between the rows matters more than the exact totals.
Two things jump out. The electric units cost more up front and more to run when you have gas on the property already. And once you are paying a gas supply charge purely for hot water, the gap shrinks to around $1,200 to $1,400 over a decade, before you count the cost of a new gas connection, which can wipe that out on its own.
When electric instant is the cheapest to run
Electric instant hot water is the cheapest option to run in homes with no gas connection, small households, granny flats, holiday homes and far bathrooms on long pipe runs.
- No gas on the street or the property. Connecting gas costs real money, and then you pay the supply charge forever. An all electric house with 3 phase power should go straight to a Stiebel Eltron unit.
- One or two people. Less hot water used means the fixed gas supply charge is a bigger slice of the bill. For a single person, electric instant usually wins outright.
- Weekenders and granny flats. Nothing heats while nobody is there. No tank losing heat, no supply charge ticking over.
- Long pipe runs. A DHC-E 8/50 under the ensuite basin stops you heating litres that cool in the pipe on the way. That waste is invisible on the bill, and it is often bigger than people think.
Rooftop solar helps electric instant less than people hope. A 17 kW shower outruns most home systems, and most showers happen before sunrise or after dark. If solar is your reason for going electric, talk to us first.
What is cheaper to run than all of these
A heat pump storage system is cheaper to run than any gas or electric instant unit, at roughly $250 to $350 a year for a three person household, but it costs several times more to buy and needs outdoor space for a tank.
We do not sell heat pump hot water units, so this is a straight comparison, not a sales pitch. A heat pump uses about a third of the electricity of a plain element, which is why it wins the running cost race. Whether it wins the ten year race depends on the purchase price, any rebates in your state and how long you stay in the house. Our comparison of heat pump vs instant vs gas hot water runs through those trade-offs.
How to cut running cost on any instant unit
The cheapest way to cut the running cost of any instant hot water system is a lower flow shower head, because every litre you do not heat is gas or electricity you do not buy.
- Drop from 9 to 7 litres a minute. That cuts shower energy by about 22 percent, gas or electric.
- Size it right. A bigger electric unit does not cost more per shower; it just keeps up on cold mornings. Undersizing saves nothing.
- Use ECO mode. The Stiebel Eltron DEL Plus range has one. Most people never notice it is on.
- Check your tariff. On a time of use plan, a morning shower can cost noticeably less than a 7pm one. Demand tariffs need a closer look before you put a 28 kW unit on the board.
For the full gas vs electric decision beyond running cost, including install and power supply, read electric vs gas instantaneous hot water.
Our verdict on the cheapest hot water system to run
If your home already has mains gas, the Midea M20 at $749 is the cheapest instant hot water system to buy and to run, full stop.
In Melbourne, Adelaide or Canberra with a family, step up to the Midea M26 for $100 more. If there is no gas, do not connect it just for hot water; buy a Stiebel Eltron DEL 27 Plus on 3 phase, or a DEL 18 Plus in Brisbane, Perth or Sydney. And if you are on bottled LPG, the two are close enough that convenience should decide it, not the bill.
Frequently asked questions
What is the cheapest hot water system to run in Australia?
The cheapest hot water system to run in Australia is a heat pump storage system at roughly $250 to $350 a year for three people, followed by a gas continuous flow unit like the Midea M20 on an existing mains gas connection at about $360 a year. Electric instant hot water costs about $725 a year for the same household at 33 cents per kWh (estimates as of October 2026).
Is gas or electric instant hot water cheaper to run in Australia?
Gas continuous flow is cheaper to run than electric instant hot water in Australia when the home already pays a gas supply charge for cooking or heating, costing about 37 cents per Sydney winter shower against about 75 cents for electric. When hot water is the only gas appliance, the daily supply charge of around $290 a year closes most of that gap.
Is LPG continuous flow hot water cheaper than electric?
LPG continuous flow hot water costs about the same to run as electric instant hot water, roughly $670 a year against $725 for a three person Sydney household, because bottled LPG costs close to twice as much per megajoule as mains natural gas. Convenience and installation cost usually matter more than running cost in that comparison.
Does a bigger instant hot water system cost more to run?
A bigger instant hot water system does not cost more to run for the same amount of hot water, because it only uses the energy needed to heat the water flowing through it. A 28 kW electric unit and a 19.4 kW unit cost the same per shower; the bigger unit simply keeps up better in cold weather.
What is the cheapest instant hot water system to buy and run?
The Midea M Series M20 at $749 is the cheapest instant hot water system to buy and run for a home with mains natural gas already connected, with a 6.7 star energy rating and an estimated ten year total of about $4,300 including energy for a three person household. For homes without gas, the Stiebel Eltron DHB-E 18 LCD at $1,139 is the cheapest 3 phase electric option (prices as of October 2026).
Want the numbers for your house?
Send us your suburb, how many people live there, whether you have gas, and the usage rates off your power and gas bills. We will tell you which unit is cheapest for you to run, and we will tell you if the answer is something we do not sell.
Ask us what will be cheapest to run at your place →
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This guide is general information for Australian households and is not a substitute for advice on your specific home and site. Running costs are worked estimates based on typical mains water temperatures, usage patterns and assumed gas and electricity prices; your tariffs and usage will change the result. Electric instantaneous water heaters must be installed by a licensed electrician and plumber, on a dedicated circuit sized to the unit. 3-phase units need a 3-phase power supply, and any supply upgrade must be arranged through a licensed electrician and your network provider. Gas continuous flow units must be installed by a licensed gas fitter, and the 70°C preset Midea models need a tempering valve. Confirm final sizing with us or your installer before you buy.