Choosing a hot water system is one of the bigger decisions you'll make as a homeowner — it affects your daily comfort, your power bills, and your home's value. In New Zealand, the two most common options are gas (either natural gas or LPG) and electric, and each has real advantages depending on your situation. Here's a practical breakdown to help you decide.
What Types of Systems Are Available?
Before comparing gas and electric, it helps to know the main system types within each category:
Gas hot water:
- Gas storage cylinder – heats and holds a tank of water, similar to electric storage
- Gas continuous flow (instantaneous) – heats water on demand, no storage tank required
Electric hot water:
- Electric storage cylinder – the most common type in NZ homes; heats water using an element inside a tank
- Heat pump hot water – uses electricity to extract heat from the air, much like a reverse-cycle heat pump; very energy efficient
- Solar hot water with electric boost – solar collectors on the roof pre-heat water, with an electric element as backup
Key Factors to Consider
1. Is Gas Available at Your Property?
This is often the deciding factor. Natural gas is only available in certain parts of New Zealand — mainly larger urban centres. If you're not on the gas network, you'd need to use LPG (bottled or bulk tank), which adds ongoing cylinder costs and requires space for storage. Check with your local lines company or MBIE Building Performance for guidance on connections.
2. Running Costs
Running costs vary depending on your energy provider, tariff, household size, and usage habits. As a general guide:
- Natural gas continuous flow systems tend to have low running costs when gas prices are competitive, and you only heat what you use
- Electric storage cylinders can be made more affordable by running on an off-peak (night rate) electricity tariff
- Heat pump hot water systems are typically the most energy-efficient electric option — they can use significantly less electricity than a standard element cylinder
- LPG tends to be more expensive per unit of energy than natural gas or electricity in most NZ regions
For up-to-date guidance on energy efficiency and running costs, Energywise has excellent NZ-specific comparisons.
3. Upfront Installation Cost
Installation costs vary widely depending on your home's existing setup:
| System Type | Typical Upfront Cost (Guide Only) | Notes |
|---|---|---|
| Electric storage cylinder | Lower–moderate | Simple swap if replacing like-for-like |
| Gas continuous flow | Moderate–higher | May need flue, gas line work |
| Heat pump hot water | Moderate–higher | Needs adequate space and airflow |
| Solar + electric boost | Higher | Roof space and orientation matter |
These are rough guides only — always get quotes from licensed tradespeople for your specific situation.
4. Household Size and Hot Water Demand
- Continuous flow gas systems are well suited to larger households or homes with high simultaneous demand (e.g., multiple showers running at once), as there's no tank to run out of
- Storage cylinders (gas or electric) suit most average households; sizing the tank correctly is important — too small and you'll run out, too large and you're heating water you don't use
- Heat pump systems generally need a bit more time to recover, so tank sizing matters even more
5. Environmental Impact
If reducing your carbon footprint matters to you, electric heat pump hot water systems powered by NZ's largely renewable electricity grid are a strong choice. BRANZ research supports heat pumps and solar as lower-emissions options for NZ homes. The government's shift away from fossil fuels in buildings is also worth keeping in mind if you're planning long-term.
6. Space and Installation Requirements
- Gas continuous flow units are compact and wall-mounted — great for smaller homes or tight spaces
- Electric storage cylinders can be installed in a cupboard, garage, or roof space
- Heat pump hot water units need adequate surrounding air volume to operate efficiently — they don't suit small enclosed cupboards
- Solar systems require suitable north-facing roof space
NZ Building Code and Compliance
Any new hot water installation or significant alteration must comply with the NZ Building Code, particularly Clause G12 (Water Supplies). This covers water temperature requirements — hot water delivered to bathrooms must be tempered to a maximum of 55°C to prevent scalding, which is typically achieved with a tempering valve. Your installer should handle this as part of the job.
When to Call a Professional
Hot water installation is restricted work in New Zealand — you cannot legally do it yourself. Here's what the law requires:
- All plumbing connections to a hot water system must be carried out by a licensed plumber registered with the Plumbers, Gasfitters and Drainlayers Board (PGDB)
- Gas work (connecting a gas appliance, running gas lines, installing flues) must be done by a licensed gasfitter — also registered through the PGDB
- Electrical connections (wiring a new cylinder or heat pump) must be carried out by a registered electrician registered with the Electrical Workers Registration Board (EWRB)
⚠️ Safety note: Unlicensed gas or electrical work is illegal and dangerous. Faulty installations can cause fires, explosions, carbon monoxide poisoning, or electrocution. Always use licensed professionals and ask to see their licence.
A qualified plumber can assess your home, recommend the right system for your needs, and manage the full installation. You can find licensed local plumbers and gasfitters on tradedirectory.co.nz.
Quick Comparison Summary
| Factor | Gas (Natural) | LPG | Electric Storage | Heat Pump |
|---|---|---|---|---|
| Availability | Urban areas only | Nationwide | Nationwide | Nationwide |
| Running cost | Low–moderate | Higher | Moderate (off-peak) | Low |
| Upfront cost | Moderate | Moderate | Lower | Higher |
| Environmental impact | Moderate | Higher | Low (renewable grid) | Very low |
| Hot water supply | Continuous (flow) | Continuous (flow) | Limited by tank | Limited by tank |
Sources & Further Reading
- Energywise – Hot Water Heating — energy efficiency advice for NZ homes
- BRANZ – Building Research — NZ-specific building and energy research
- MBIE Building Performance — NZ Building Code and compliance information
- PGDB – Licensed Plumbers and Gasfitters — verify your tradesperson's licence
- EWRB – Electrical Workers — check your electrician is registered