What an Electric Instant Hot Water System Costs to Run
The kW number on the box scares people. It should not. Here is what an electric instant unit actually adds to your power bill.
The electric instant hot water running cost for a typical 8 minute shower is about 45 to 90 cents, depending on your city and the season, at an electricity price of 33 cents per kWh. For a three person household that works out to roughly $650 to $850 a year. The size of the unit does not set that cost. The amount of hot water you use does. A 28 kW unit and a 19.4 kW unit cost the same to run for the same shower.
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.
How to work out the running cost yourself
The running cost of an electric instant hot water system is the unit's kW draw, multiplied by the hours it runs, multiplied by your price per kWh. That is it. Electric instant units turn close to every unit of electricity into heat in the water, and they store nothing, so there is no standby loss to add.
Worked example. A Sydney shower in winter needs about 17 kW to heat 9 litres a minute to 40°C. Run that for 8 minutes:
- 17 kW x (8 ÷ 60) hours = 2.27 kWh
- 2.27 kWh x $0.33 = about 75 cents
Your electricity rate is on your bill as the "usage" or "peak" rate. General usage rates across Australia commonly sit somewhere around 28 to 40 cents per kWh, depending on state, retailer and plan. Swap your own number in. We use 33 cents in this article because it is a round middle figure, not because it is yours.
Why a bigger unit does not cost more to run
A bigger electric instant unit does not cost more to run, because the energy used is set by how many litres you heat and by how many degrees, not by the unit's rating. A 28 kW unit on a winter shower only draws what that shower needs. If the shower needs 17 kW, it modulates down and draws 17 kW.
Where the bigger unit earns its keep is cold mornings. A DEL 27 Plus has headroom for a Melbourne July. A 19.4 kW unit in the same spot runs flat out and still gives you a lukewarm shower. The power bill is the same. The shower is not.
So stop picking the smaller unit to "save on power". It saves nothing on running cost. It just risks being undersized.
Cost per shower by city
An 8 minute winter shower on electric instant hot water costs about 66 cents in Brisbane, 75 cents in Sydney, 83 cents in Melbourne and 92 cents in Canberra at 33 cents per kWh. Colder incoming water means more heating, which means more kWh. Summer costs drop by roughly a third, because the mains water arrives warmer.
| City | Winter kW needed (9 L/min at 40°C) | Energy per 8 min winter shower | Cost per winter shower | Cost per summer shower (approx.) |
|---|---|---|---|---|
| Brisbane | 15 kW | 2.0 kWh | 66c | 40c |
| Sydney | 17 kW | 2.27 kWh | 75c | 45c |
| Melbourne | 19 kW | 2.53 kWh | 83c | 55c |
| Canberra | 21 kW | 2.8 kWh | 92c | 60c |
Worked estimates at 33 cents per kWh, a 9 litre a minute shower head and typical mains water temperatures, current as of October 2026. Your actual cost depends on your tariff, your shower head and how long you stand there.
The kW figures in that table are the same ones our sizing calculator uses. If your unit is sized to the winter figure for your city, the cost per shower is simply that kW times the minutes.
What a household pays in a year
A three person household using electric instant hot water typically pays about $650 to $850 a year in electricity for it, at 33 cents per kWh in a mild city like Sydney. That assumes one 8 minute shower each per day plus basins and the kitchen sink.
| Household | Daily hot water energy (year average) | Yearly kWh | Yearly cost at 33c/kWh |
|---|---|---|---|
| 1 person | About 2.5 kWh | About 900 kWh | About $300 |
| 2 people | About 4.5 kWh | About 1,650 kWh | About $540 |
| 3 people | About 6 kWh | About 2,200 kWh | About $725 |
| 4 people | About 8 kWh | About 2,900 kWh | About $960 |
Worked estimates for a Sydney climate, prices current as of October 2026. Add roughly 10 to 15 percent for Melbourne or Canberra, take off a little for Brisbane or Perth. Teenagers are not included in these assumptions. Budget accordingly.
That is not a cheap number, and we are not going to pretend it is. Heating water is one of the biggest energy jobs in any house, whatever does it.
The tariff traps that change the maths
Electric instant hot water almost always runs on your general or peak tariff, not the cheaper off-peak controlled load tariff, and that is the biggest single factor in its running cost. A storage tank can heat overnight on a cheap rate and sit there. An instant unit heats the water the moment you turn the tap on, at whatever rate applies at that time.
Three things to check on your bill before you commit:
- Time of use pricing. If your plan charges a high peak rate from late afternoon into the evening, evening showers cost more. Morning showers are often on a cheaper shoulder rate.
- Demand charges. Some plans charge for your highest kW draw in a month, not just the kWh. A 28 kW unit running flat out can set that peak on its own. If your plan has a demand charge, ask your retailer what it means for you before buying a big 3 phase unit.
- Solar. Rooftop solar helps less than people hope. A 19.4 kW shower outruns most home systems, and most showers happen before sunrise or after sunset anyway.
None of these are reasons to avoid electric instant. They are reasons to read your bill first.
Electric instant vs storage vs gas running costs
Electric instant hot water usually costs about the same to run as an electric storage tank on off-peak, more than a heat pump, and roughly level with gas once the gas supply charge is counted. Here is the honest comparison for a three person Sydney household.
| System | What drives the cost | Rough yearly cost (3 people) |
|---|---|---|
| Electric instant | Peak or general rate, no standby loss | About $725 |
| Electric storage on off-peak | Cheaper rate, but the tank loses heat all day | About $650 to $750 |
| Gas continuous flow | Gas usage plus a daily gas supply charge | About $500 to $800 |
| Heat pump storage | Uses roughly a third of the electricity of a plain element | About $250 to $350 |
Rough comparative estimates, current as of October 2026. Gas and electricity prices vary widely by state and retailer. Treat these as a guide to the gap, not a quote.
The gas line hides a trap. If hot water is the only gas appliance in the house, you pay the daily gas supply charge just for it, and that can be a few hundred dollars a year before you heat a single litre. If you already cook on gas, a Midea M20 or Midea M26 usually wins on running cost. We go deeper in electric vs gas instantaneous hot water.
Heat pumps are the cheapest to run. They also cost several times more up front and take a lot of space. We do not currently sell heat pump hot water units, so take that as an honest comparison, not a pitch. The full trade-off is in instant hot water vs storage tank.
Where electric instant actually saves money
Electric instant hot water saves money in the places a storage tank wastes it: small households, holiday homes, granny flats, and long pipe runs to a far bathroom or kitchen. A tank keeps 250 litres hot around the clock whether anyone is home or not. An instant unit uses nothing when the taps are off.
A single person in a unit, or a weekender used twelve weekends a year, is where the instant unit wins clearly. So is the far ensuite with a minute of cold water before the hot arrives. A small single phase unit like the DHCE 8/50 under that basin stops you paying to heat water that cools in the pipe and never gets used.
How to cut the running cost
The cheapest way to cut electric instant hot water running cost is a lower flow shower head, because every litre you do not heat is money you do not spend. Going from 9 to 7 litres a minute cuts shower energy by about 22 percent. That is around $140 a year for a three person house.
- Shorter showers. Each minute off an 8 minute Sydney winter shower saves about 9 cents. Boring, but it adds up.
- Use ECO mode. The DEL Plus range and the DHE 27 have an ECO setting that caps the flow. Most people do not notice the difference in the shower.
- Set the temperature you actually use. Turning the unit down saves less than people expect, because what you pay for is the temperature at the shower head, not on the display. It does stop you heating to 50°C and then mixing in cold.
- Shower on a cheaper rate. On a time of use plan, a morning shower can cost noticeably less than a 7pm one.
The DEL Plus display shows live power draw, which is handy. Watch it during a shower once and you will know exactly what that shower costs.
Frequently asked questions
How much does an electric instant hot water system cost to run in Australia?
An electric instant hot water system costs about $650 to $850 a year to run for a three person household in a mild Australian city, at an electricity price of 33 cents per kWh. A single 8 minute winter shower costs roughly 66 cents in Brisbane, 75 cents in Sydney, 83 cents in Melbourne and 92 cents in Canberra.
Does a bigger instantaneous hot water system use more electricity?
A bigger instantaneous hot water system does not use more electricity for the same amount of hot water, because the unit only draws the power needed to heat the water flowing through it. A 28 kW unit and a 19.4 kW unit use the same kWh for the same shower; the bigger unit just keeps up better in cold weather.
Is electric instant hot water cheaper than a storage tank?
Electric instant hot water costs about the same to run as an electric storage tank on off-peak for a typical family, because the tank's cheaper tariff is offset by the heat it loses standing all day. Electric instant is clearly cheaper for small households, holiday homes and granny flats where a tank would sit hot and unused.
Can electric instant hot water run on off-peak power?
Electric instant hot water generally cannot run on an off-peak controlled load tariff, because it heats water the moment a tap opens rather than heating overnight and storing it. It runs on your general or time of use tariff, so check your peak rate before comparing running costs.
How do I calculate the electricity cost of my instant hot water system?
Multiply the power the unit draws in kW by the hours it runs, then by your electricity price per kWh. For example, a unit drawing 17 kW for an 8 minute shower uses 2.27 kWh, which costs about 75 cents at 33 cents per kWh.
Want a straight answer for your house?
Tell us your suburb, how many people live there and roughly what your power bill says per kWh, and we will tell you what an electric instant unit will cost you to run, and whether gas makes more sense. If you are still choosing a unit, start with single phase vs 3 phase instant hot water, because the power supply decides more than the price tag does.
Ask us what it will cost to run at your place →
Shop electric instantaneous water heaters →
Or browse the full Stiebel Eltron range and every instant hot water system we stock, including the budget DHB-E 18 LCD.
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 an assumed electricity price; your tariff 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. Confirm final sizing with us or your installer before you buy.