How much does hot water really cost your home

As energy prices continue to climb, many households are looking closely at where their money is going. One of the biggest contributors often flies under the radar. Hot water.

For most homes, heating water is one of the largest ongoing energy expenses, yet it is rarely questioned or reviewed.

Powrhouse founder Tim Johnston said recent analysis of his own household highlights just how significant that cost can be.

“We tracked 12 months of bills before and after switching systems, and the difference was clear,” he said.

Mr Johnston replaced a gas hot water system with a heat pump at his home in early 2025. Before the upgrade, the household was using 14,398 MJ of gas each year purely for hot water.

At current rates of around 4.92 cents per MJ, that equates to roughly $705 annually.

“When people see that number, it’s often a surprise. Hot water is a major part of the energy bill,” he said.

After installing the heat pump, gas usage dropped to zero. Electricity usage increased slightly, by about 437 kWh across the year, adding roughly $120 to the electricity bill.

The result was a net saving of about $580 annually.

 

“Heat pumps are incredibly efficient, so the increase in electricity is relatively small compared to the gas savings.”

The figures are based on a family of four with moderate hot water use, including daily showers and regular baths.

Savings will vary depending on household size and habits, but the underlying takeaway is consistent. Heating water carries a real and often underestimated cost.

“As gas prices continue to rise, that cost is only going one way,” he said.

For households considering an upgrade, installation costs for heat pump systems typically range from $1,500 to $2,000, with many recouping the investment within a few years through lower running costs.

More information is available at www.powrhouse.au or by calling 0401 324 961.

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