Choosing a hot water system is one of the most important decisions you'll make for your home — it affects your energy bills, your comfort, and how well the system suits your household's lifestyle. Whether you're replacing an ageing cylinder or building new, the choice between a continuous flow (instantaneous) system and a storage hot water cylinder is worth getting right from the start.
What Is a Storage Hot Water Cylinder?
A storage cylinder (also called a hot water tank) heats and holds a set volume of water — typically between 135 and 300 litres — ready for use. Most NZ homes have traditionally used these systems, often powered by electricity (with off-peak or continuous tariffs), gas, or a wetback connected to a wood burner.
Storage cylinders are governed by the NZ Building Code clause G12 (Water Supplies), which sets requirements around temperature, pressure, and safety. They must be set to at least 60°C to prevent Legionella bacteria growth, with a tempering valve installed to deliver safe mixed water (typically 55°C or below) at the tap.
Well-known NZ brands include Rheem, Rinnai, and Vulcan, and cylinders are widely available through Placemakers and Mitre 10.
What Is a Continuous Flow (Instantaneous) System?
A continuous flow or instantaneous hot water system heats water on demand as it passes through the unit — there's no stored tank. These are almost always gas-powered (natural gas or LPG), though some electric models exist. Because there's no stored water to keep warm, standby heat loss is eliminated.
Continuous flow systems are compact, wall-mounted, and well-suited to households with variable or high hot water demand. Brands like Rinnai, Bosch, and Rheem offer popular models across NZ.
Because these units involve gas work, installation and servicing must be carried out by a licensed gasfitter registered with the Plumbers, Gasfitters and Drainlayers Board (PGDB). This is restricted work under the Plumbers, Gasfitters, and Drainlayers Act 2006 — it is illegal for an unlicensed person to connect or alter gas appliances.
Head-to-Head Comparison
| Feature | Storage Cylinder | Continuous Flow |
|---|---|---|
| Energy efficiency | Moderate – standby heat loss occurs | High – heats only what you use |
| Hot water supply | Limited by tank size; can run out | Unlimited (while gas/power is on) |
| Running costs | Lower upfront; higher ongoing (electric) | Lower ongoing (gas); LPG can be costly |
| Purchase & install cost | Generally lower upfront | Higher upfront unit cost |
| Physical size | Large – needs dedicated space | Compact – wall-mounted |
| Fuel types | Electric, gas, solar, wetback | Mainly gas (natural gas or LPG) |
| Lifespan | Typically 10–15 years | Typically 15–20+ years |
| Maintenance | Anode replacement every 5 yrs; annual check | Annual service recommended |
| NZ climate suitability | Works well nationwide | Cold inlet temps can reduce flow rate |
| DIY-friendly? | Electrical connections – restricted work | Gas connections – restricted work |
| Environmental impact | Depends on energy source; solar-compatible | Gas produces emissions; no solar option |
Energy Efficiency and Running Costs
Storage cylinders lose heat through their walls and pipework even when no hot water is being used — this is called standby heat loss. A well-insulated modern cylinder minimises this, but it never disappears entirely. Energywise notes that water heating typically accounts for around 30% of a household's energy use, making it one of the biggest opportunities for savings.
Continuous flow systems avoid standby loss entirely, which can translate to meaningful savings — particularly for smaller households who don't use hot water constantly. However, if you're on LPG (common in rural NZ), gas prices can offset those efficiency gains. Natural gas users in main centres tend to see the best savings.
As a rough guide only: electric storage cylinder running costs are generally higher than a natural gas continuous flow system, but the gap narrows if you're on a controlled (off-peak) electricity tariff or have a solar hot water top-up.
Suitability for NZ Conditions
New Zealand's climate varies enormously — from subtropical Northland to the cold winters of Otago and Southland. Continuous flow systems can struggle in very cold climates because the incoming cold water temperature is lower, reducing the achievable flow rate at a given temperature rise. If you're in a colder region, you may need a higher-capacity unit.
Storage cylinders work reliably in all NZ climates and pair well with solar hot water collectors — a popular option for reducing energy costs, particularly in sunnier regions. BRANZ has useful research on solar hot water performance across NZ climate zones.
For households with high simultaneous demand — multiple showers running at once, for example — a continuous flow system with sufficient flow rate (look for 20–26 litres per minute) or a larger storage cylinder (250–300 L) will serve you better.
What Work Is Restricted — and What Isn't?
Safety note: Hot water system installation involves either electrical or gas connections, both of which are restricted work in New Zealand.
- Electrical connections to a storage cylinder must be done by a registered electrician (EWRB).
- Gas connections for continuous flow systems must be done by a licensed gasfitter (PGDB).
- Plumbing connections (water supply and pressure relief valve pipework) must also be carried out by a licensed plumber.
Homeowners can legally do minor tasks like adjusting a tempering valve temperature or replacing a showerhead, but connecting or modifying the system itself is not DIY territory. Always ask your tradesperson for a Certificate of Compliance on completion.
Our Recommendation
There's no single right answer — it depends on your household and situation:
- Choose a storage cylinder if: you're on electricity (especially with a controlled tariff or solar), you have a wetback, you want lower upfront costs, or you're in a rural area on LPG where gas running costs are high.
- Choose continuous flow if: you have natural gas connected, your household has unpredictable or high hot water demand, you want a long-lasting compact system, or you're renovating and want to free up cupboard space.
- For eco-conscious homeowners: consider a heat pump hot water cylinder — a newer option that uses refrigerant technology to heat water very efficiently from ambient air. These are gaining popularity in NZ and are worth discussing with your plumber.
Whatever you choose, have the system installed by a qualified local plumber and gasfitter. You can find licensed tradespeople in your area at tradedirectory.co.nz.
Master Plumbers
