The short answer
For most Adelaide houses replacing a hot water system in 2026, the choice comes down to three low-emission options: gas, a heat pump or solar with a booster.
- Gas is usually the simplest and cheapest swap where a gas unit is already in place and mains gas is connected. It heats fast and copes with heavy use, but you remain tied to gas prices and a gas connection.
- A heat pump is the natural choice for an all-electric home, especially one with rooftop solar panels. It costs more upfront, uses far less electricity than a standard element, and can attract incentives.
- Solar with a boost suits a home with a clear north-facing roof and owners planning to stay long enough to see the running-cost savings pay back the higher purchase price.
The rest of this guide explains how to weigh those trade-offs for your own home.
Why the choice matters more in South Australia
In many states, the default replacement for a failed electric tank is another electric tank. In South Australia it often is not. Since 2008, the state's water heater requirements have restricted when a standard electric storage heater can be fitted in an existing house. In many homes the replacement must be a low-emission system — and that usually means one of the three options in this guide.
There are exemptions, and they depend on the dwelling. The Office of the Technical Regulator publishes the current requirements. Your plumber should check them for your address before quoting, but it helps to know about them before the old heater fails, so you can compare options calmly instead of in a rush.
How each system works
Gas storage. A burner beneath an insulated tank heats water and keeps a reserve ready. Simple, familiar, quick to recover. Loses some heat from the tank all day.
Gas continuous flow. Heats water as it passes through, only when a hot tap is on. No tank to keep hot, so no standing loss, and no reserve to run out. Needs a power point and an adequate gas supply.
Heat pump. A fan, compressor and refrigerant circuit move heat from the outside air into a water tank. It uses electricity, but much less than an element would to deliver the same hot water. Performance falls somewhat in cold air.
Solar with boost. Roof collectors heat water directly from the sun. A gas or electric booster tops up the temperature when the sun is not enough. Output varies with season and weather.
Running costs: what actually drives them
Running cost is the sum of how much energy the system uses and what you pay for that energy. Four things move it most:
- How much hot water you use. A larger household with long showers uses far more energy than a couple. Every system costs more to run when use is high.
- Your tariffs. The price of gas, the price of electricity, whether you have a controlled-load tariff and what you are paid for exported solar all matter. Two neighbours with the same system can have very different running costs.
- Efficiency. A heat pump's efficiency depends on air temperature and design. A gas unit's efficiency shows in its energy star rating. A solar system's contribution depends on roof orientation, shading and the booster settings.
- How it is set up. A heat pump timed to run when your panels generate costs less than one running at night on grid power. A solar booster left running all day can cancel much of the solar saving.
As a general pattern, for many Adelaide households a heat pump or a well-sited solar system costs less to run than gas, and all three are usually cheaper to run than a standard electric tank on a general tariff. But the only way to know for your home is to use your own bills. Find the gas and electricity rates on recent bills, note your household's hot water habits, and ask each contractor quoting to estimate the yearly running cost of the system they propose.
Upfront cost and incentives
Upfront cost is where gas often wins. Replacing an existing gas unit in the same position is usually the cheapest of the three. Heat pumps and solar systems cost more to buy and install. Our Adelaide price guide gives 2026 planning ranges for each.
Incentives can narrow that gap:
- Federal small-scale technology certificates. Eligible heat pumps and solar water heaters create certificates under the Small-scale Renewable Energy Scheme, run by the Clean Energy Regulator. The value depends on the system and the market, and installers usually apply it as a discount on the quote.
- South Australia's Retailer Energy Productivity Scheme (REPS). This SA Government scheme requires larger energy retailers to help households save energy, and it has supported discounted upgrades to more efficient water heaters through participating providers. What is offered, and by whom, changes over time.
- Other programs. From time to time, federal or state programs offer further help, sometimes targeted to concession holders or renters. Check before you buy.
We do not publish amounts because they change. Check the Department for Energy and Mining and the Clean Energy Regulator for the current position, and ask for each incentive to appear as its own line on the quote.
Climate: plains versus Hills
Adelaide's climate is kind to all three options on the plains. Hot summers suit heat pumps and solar, and winter mornings are mild enough that most modern heat pumps perform well.
The Adelaide Hills are different. Around Mount Barker, frosts and colder mornings are more common. Heat pumps still work, but the model and setup matter more: choose a unit rated for lower temperatures, place it out of cold wind, and run it in the afternoon. Solar collectors need frost protection, and winter output is lower, so the booster does more. Gas continuous flow does not lose output in the cold, which is one reason it stays popular in the Hills where mains gas is available.
Space, roof and noise
Gas needs a suitable wall or base, clearances around the flue, and for continuous flow a power point and enough gas supply.
Heat pumps need open space around the fan for airflow, a solid base, a condensate drain, and a position away from bedroom windows — yours and your neighbours'. They make a similar sound to an air conditioner's outdoor unit.
Solar needs north-facing roof space without heavy shading, a roof strong enough for the collectors (and the tank, for close-coupled systems), and safe access. South-facing or shaded roofs are usually a poor fit.
In a narrow Glenelg courtyard, a compact gas continuous flow unit may be the only practical option. On a Salisbury block with a sunny side yard, a heat pump is easy to place. Every home is different, which is why a site visit matters.
A simple way to decide
Work through these questions in order:
- Is mains gas connected, and is there a gas unit now? If yes, gas is the simplest swap. If you would rather move away from gas, a heat pump is the usual alternative.
- Do you have rooftop solar panels? If yes, a heat pump timed to run in the day often gives the lowest running cost.
- Do you have a clear north-facing roof and plan to stay a long time? If yes, solar with a boost is worth pricing.
- Are you in the Hills? If yes, check cold-weather performance and frost protection whichever you choose.
- What does your budget allow now? If upfront cost is the main constraint, compare the incentive-adjusted price of a heat pump with a gas swap before deciding.
Then get quotes that spell out the unit, the installation, the incentives and the expected running cost. We can arrange that: call (08) 7100 9072, or use the local pages for Glenelg, Modbury, Salisbury and Mount Barker. For more on each option, see gas, heat pump and solar hot water.