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Gas water heaters Using gas instead of electricity to heat your water can help to reduce your greenhouse gas emissions, and may lower your water heating costs.

Gas water heaters burn either:

  • Natural gas which is delivered via a piped gas network, also called reticulated gas.
  • Liquefied petroleum gas (LPG), also called bottled gas.

Types of gas water heaters

There are two main types of gas water heaters:

Storage

Storage hot water heaters use a gas burner located underneath a water storage tank to heat the water. They usually have a continuously burning pilot flame that ignites the main burner when it is needed. Heat is then transferred from the gas burner through the bottom of the cylinder. Some heat also flows from the hot flue pipe into the water. When hot water is drawn off at the top of the tank, cold water enters the tank at the bottom.

Most units have an adjustable thermostat to set the water temperature. When the temperature at the bottom of the tank drops below the level set on the thermostat the pilot flame ignites the main burner so the water is kept constantly hot. The energy from the pilot flame is not wasted as it helps to heat the water in the tank.

There are a few variations available, including the tank material, burner and flue technology, and indoor or outdoor installations.

The most common tank material is vitreous or enamelled steel, but stainless steel is also an option. Stainless steel is more expensive, but the tank will usually last longer. Enamel steel tanks also require the use of a sacrificial anode, which requires additional maintenance and replacement to prevent the inside of the tank from corrosion. Tank sizes range from about 90 litres to 300 litres.

Some units use a special flue system to recirculate the hot flue gases around the outside of the tank to increase heat transfer into the water and increase their efficiency. Units installed indoors need a flue to exhaust the combustion gases outdoors.

Gas storage water heater
Image of gas storage water heater

Gas storage water heaters must be set to at least 60 degrees Celsius to kill any pathogens and avoid legionella, so you may need to consider a temperature control valve to limit the bathroom water temperature to 50 degrees Celsius to prevent scalding. You should confirm whether your state and territory plumbing regulations require a temperature control valve to be fitted.

Storage heaters lose heat through the walls of the tank (called standing heat loss), so they need to burn gas regularly to keep the water at the desired temperature. These losses can be a significant proportion of your hot water energy use and your gas bill. All tanks have some insulation to reduce standing heat losses, but a better insulated tank will have lower storage losses, so look for one with a high energy star rating.

Gas water heaters (except gas boosted solar) have an energy star label to tell you how efficient they are. This is similar to the energy label on electrical appliances and the more stars the product has the more efficient it is. Once you have decided on the type and size of water heater you need, use the label to select the most efficient model by choosing one with the highest number of stars and the lowest energy consumption. The more stars a unit has, the lower its running costs and greenhouse gas emissions.

Storage systems have a range of efficiencies from about 3 to 5 stars.

Instantaneous

Instantaneous heaters, sometimes called continuous flow, don't have a storage tank and only heat the water when it is required. A gas burner heats the water as it flows through a coiled pipe called a heat exchanger. The burner starts when a hot water tap is turned on. It only heats the amount of water that is required at any time, rather than continuously heating an entire tank. As they don't store any hot water there are no heat losses from a tank and so can have energy and cost savings.

To allow enough time for heating, the water is slowed down as it flows through the heat exchanger. This means that instantaneous units supply hot water at a lower pressure than storage systems. They can typically deliver hot water at flow rates of between 10 to 30 litres per minute, depending on the model.

Some instantaneous systems have a pilot flame to light the main burner and some have electronic ignition that uses a spark to light the gas, the same as those used on gas stoves. Instantaneous units with a pilot light are less efficient than those with electronic ignition, because, unlike in a storage system, the pilot light energy is wasted. Look for models with electronic ignition.

Standard gas instanenous water heater
Image of standard gas instantaneous water heater

There are two different types of instantaneous heaters. One type is very simple and has a fixed burner flame so the water temperature will vary with the rate of water flow from the tap. They usually have a pilot flame or battery ignition and do not need an electricity supply. They generally have limited flow rates of up to about 16 litres per minute and are not suitable for houses with more than one bathroom. However, they are usually cheaper to buy and install.

The other type has electronic controls that vary the flame size to deliver water at a constant preset temperature and fans that improve the combustion efficiency. They can be fitted with controls to allow you to set the water temperature you want. This means you can preset the water temperature to no more than 50 degrees Celsius as required by plumbing regulations for bathrooms, and you don't need to mix with cold water to provide a safe bathing temperature.

There are also very efficient condensing instantaneous units available. These use the heat from the exhaust gas to pre-heat the cold water before it enters the heat exchanger, thereby reducing energy use. Although rated at 6 stars, currently the maximum rating, they use less energy than non-condensing units so look for the megajoules or MJ per year energy consumption figure on the label as well as the star rating to compare products.

High efficiency gas
Image of high-efficiency gas instantaneous water heater with condensing technology

Some of the non-electronic instantaneous models may not be suitable for use with water efficient 3 star showerheads as the hot water flow rate will be too low. Check with your plumber or water heater supplier or manufacturer if you are concerned.

Instantaneous units have an efficiency rating in the range of 4 to 6 stars. The energy label assumes that you use 200 litres of hot water per day (about the use of a typical 4 or 5 person household). If you use that much hot water, then a 5 star storage system and a 5 star instantaneous system will use about the same amount of energy each year. However, if you use less hot water, an instantaneous system might use less energy as it has no storage losses.

Graph showing comparative energy consumption of gas water heaters. At a water use of 50 litres per day, a 5 star instantaneous heater will use approximately 5000 MJ of gas per year and a 5 star storage will use 10,000 MJ. For a hot water use of 200 litres per day, the MJ of gas per year is equal for both heaters, at 20,000.
Graph showing comparative energy consumption of gas water heaters. At a water use of 50 litres per day, a 5 star instantaneous heater will use approximately 5000 MJ of gas per year and a 5 star storage will use 10,000 MJ. For a hot water use of 200 litres per day, the MJ of gas per year is equal for both heaters, at 20,000.

Getting the most out of your gas water heater

Saving Energy

If you are going away on holidays you can safely switch your heater off to save energy. If you have a system with a pilot light make sure you know how to relight it. This information can usually be found on the heater unit or in the owner's guide.

Another way to improve the efficiency of your hot water system is to insulate the hot water pipes, if you can, to reduce energy wastage through heat losses from the pipes. This is especially important if you have hot pipes longer than a few metres. The normal green lagging that some plumbers use is usually not enough. Pipe insulation should have an R rating of at least 0.3, which is about a 10mm thickness of plastic foam insulation. You should be able to buy suitable pipe insulation from a hardware store. In colder areas it is better to try to get a higher insulation (R) rating.

You should make sure your storage heater is set to the correct temperature and not overheating the water, as this wastes energy. Storage systems need to be set at 60 degrees Celsius to prevent the growth of harmful bacteria, but higher temperatures waste energy. Instantaneous systems do not store any water so there is no risk of bacteria growing, and they can be set to deliver water at a lower temperature. To save energy and comply with plumbing regulations, they should be set no higher than 50 degrees Celsius.

Maintenance

A well maintained gas water heater can give you years of trouble-free service. Have your system installed by a licensed tradesperson and have it serviced in accordance with the manufacturer's instructions.

Storage tanks made of enamelled steel have a sacrificial anode, which is usually a rod of magnesium, placed inside the tank that protects the steel in the tank from corrosion. The anode needs to be checked and replaced about every five years by a licensed service person. The actual time interval will depend on your water quality and the type of heater. Follow the manufacturer's recommendation, and check with your installer if you have further questions. The service person should also inspect other parts such as the pressure relief valve and make sure the burner is working efficiently.

Most storage systems should have a life of at least 10 years if properly maintained. Instantaneous units require no routine maintenance apart from having the burner operation checked every few years. The heat exchanger usually comes with at least a 10 year warranty and can be easily replaced. Most systems will have a life of at least 15 to 20 years.

Reducing water wastage

Instantaneous systems waste some water in the time it takes for the heat exchanger to get hot. This can be several litres each time the hot tap is used – so if you turn on your hot taps frequently you can have a lot of wasted water.

A water recirculation system can help reduce this wastage. You press a button before turning on the hot tap, and it pumps cold water from the pipe back to the heater until hot water is produced. You can have one fitted during a new installation, and they are also suitable to be installed for existing systems. You can also use them with storage systems.

There are several types available, and some hot water system manufacturers produce their own. Avoid those that use electrical elements to keep the water hot between uses as they use more energy.

Diagram showing an installed water recirculation system to reduce water wastage
Diagram showing an installed water recirculation system to reduce water wastage

You can also reduce water wastage by turning the tap on at a low flow rate until it heats up, and collecting the cold water for use in your garden.

Advantages and disadvantages of gas water heaters

Whether a gas water heater is the best available choice for you depends on your particular circumstances. Think carefully about your own situation and do plenty of research, talk to different suppliers, and make sure you get several quotes before you make a final decision.

Gas water heaters can be installed regardless of solar suitability and ambient temperatures. They may be the best option when a property is not suited to either solar or heat pump water heaters.

Advantages and disadvantages of gas water heaters

Advantages

Disadvantages

  • Are less greenhouse-intensive than conventional electric hot water systems
  • Instantaneous hot water systems can supply ‘unlimited’ hot water
  • Generally have lower upfront costs than solar or heat pump hot water systems
  • Require access to piped or bottled gas. This is not always available, or can be expensive in the case of bottled gas
  • Instantaneous systems can result in increased water use due to water having to pass through the water heater to ignite the burner
  • Access to ‘unlimited’ hot water may result in an increase of hot water usage which could result in higher energy costs

Using natural gas or LPG

LPG systems are typically 2 to 3 times more expensive to run than natural gas. If you don't use much hot water this may not be an important consideration. For example, if you have a clothes washer and dishwasher that heat the water themselves (or if you wash in cold water), most of your hot water will be used for showering. If there are only a couple of people in your household and you have water efficient showerheads, then you will probably have low hot water use.

Instantaneous models, particularly high power electronic control models, use a much larger gas burner than storage systems, and will generally need a larger gas supply pipe. So, where possible, decide what you are going to buy before having the gas supply pipe installed. If you already have gas connected to supply a stove or room heater, the supply pipe may have to be replaced with a larger one. LPG units will generally require two 45 kilogram capacity gas cylinders to avoid frequent replacement of gas bottles.

Other considerations

Instantaneous systems with electronic controls also require electric power. If the electricity supply fails they won't provide hot water. If you live somewhere with frequent power outages this may be an important consideration.

If you have suitable conditions for solar, you could also consider installing a gas boosted solar system as the best way to reduce both your energy use and your greenhouse gas emissions.

Location

Every 10 metres of 15mm copper pipe contains about 1 litre of water which is wasted every time you turn the hot tap on, and the energy used to heat the water left in the hot pipe is wasted when it goes cold. To reduce this water wastage, you should aim to locate your water heater as close to your most frequently used hot water outlets. If you are unable to locate it particularly close and are left with long pipe runs, then you might consider installing a water recirculation system to reduce wastage. When designing a new home, it's ideal to put all the rooms that use hot water close together.

If space is limited to place a storage tank, then an instantaneous system may be a good alternative, as they take up very little room. It can also be possible to locate some instantaneous units indoors if the correct flue is fitted.

System size and hot water needs

Storage units are usually sized according to the number of people in the house, and instantaneous units according to the maximum number of hot water outlets likely to be used at the same time. Gas storage systems can have a smaller tank size than electric off-peak systems as they reheat the water whenever it cools down.

The way you use hot water will impact on the size you should choose. If everyone in the household tends to shower at the same time of day, such as first thing in the morning, you may want a bigger storage tank to ensure you don't run out of hot water. But remember, the bigger the tank the greater the standing heat loss, so aim for the smallest tank that will meet your needs.

The table below gives an indication of what size heater you might need, but you should always ask the supplier or manufacturer for specific size guidelines for the products you are considering.

Water heater size comparison

Storage

Instantaneous

Number of people

Size (litres)

Number of hot taps used
at the same time

Flow rate
(litres per minute)

1-2

90

1

16

2-4

130

2

20

3-5

170

3

24

4-6

200

3+

32

5-9

270

   

Climate

Gas storage water heaters are an effective choice for any climate. However in very cold climates hot water usage tends to be higher, so it may be worth considering purchasing a larger storage tank than otherwise might be suggested for your household size. If you have the space available you could consider installing the heater indoors, for example in a laundry, to help reduce heat loss from the tank.

If you are selecting an instantaneous gas water heater and you live in a climate with very cold winters, such as alpine areas, you should choose a system with a higher capacity than is normally recommended for your needs because instantaneous heaters are limited in how much they can increase the temperature of the cold water. They can raise the temperature of the cold water by 25 degrees at their nominal maximum rated flow. Reducing the flow rate will also allow the water to be heated to a higher temperature.

How gas compares with solar water heaters

If you do not have good solar access, or live somewhere with limited sunshine, gas water heaters can produce lower greenhouse gas emissions than electric boosted solar systems.  Installing a gas boosted solar system will produce fewer emissions than any other system. 

Further information

Find out more about gas water heaters:

  • CHOICE publishes information on hot water options, manufacturers and government rebates. In particular see their Buying Guide: Hot Water Options
  • For information on water efficiency and hot water systems see the Your Home website, in particular the information on hot water services
  • Your Home Technical Manual - Hot Water Service fact sheet
  • The energy star rating of any gas water heater on the market can be found on the website of the Australian Gas Association
  • Sustainable Energy Authority of Victoria - Choosing a hot water system fact sheet 
  • Sustainable Energy Development Office WA - Choosing a hot water system fact sheet Rheem Hot Water Manual
  • Contact your state or territory government or local council for information on hot water systems
  • For specifications and installation details contact your local supplier
  • Check manufacturers' websites for product information