Choosing a Tankless Water Heater That Suits Your Home
Australian households are paying closer attention to how they heat water, especially with electricity prices climbing in states like New South Wales and Victoria, and with the ongoing conversation around reducing household emissions. A growing number of Sydney and Brisbane homeowners are ditching bulky storage tanks in favour of compact, on-demand systems that heat water only when a tap is turned on. The appeal is simple: no standby heat loss, a smaller footprint in the laundry or roof space, and an endless supply of hot water for back-to-back showers.
Picking the right unit, however, is rarely as straightforward as choosing the largest one you can afford. Cold inlet water in Hobart or Canberra, simultaneous draw-offs during busy mornings, gas supply constraints in older Melbourne terraces, and rebate eligibility under schemes like the Victorian Energy Upgrades program all shape which system will actually work for your home. Knowing a few fundamentals before you walk into a plumbing showroom in Parramatta or browse online keeps you from overpaying for features you do not need.
How Tankless Water Heaters Actually Work
A tankless water heater, sometimes called an instantaneous or continuous-flow unit, heats water only as it passes through a heat exchanger. When a tap opens, a flow sensor activates the burner in gas models or the heating elements in electric models, raising the temperature by between 20°C and 35°C depending on how cold the incoming water is. The instant the tap closes, the unit shuts down, so there is no reservoir of hot water losing heat through the night.
This on-demand behaviour is what drives the efficiency claims you see on product pages. Without a 250-litre cylinder keeping water hot around the clock, households can expect to use noticeably less gas or electricity over a year. In a four-person home in Adelaide, for instance, that often translates to lower quarterly utility bills, though the actual savings depend on how much hot water the family actually uses.
The trade-off is flow capacity. Because the appliance cannot heat more water than its burners or elements allow, there is a hard ceiling on how many fixtures can run at once. If two showers and a dishwasher are running simultaneously, a small unit will struggle, particularly in winter when the groundwater in Melbourne suburbs drops close to single digits.
Sizing the System for Your Household
Sizing a continuous-flow water heater is really about matching two numbers: the temperature rise you need and the flow rate your busiest hour demands. Temperature rise is the gap between the temperature of the water entering the unit and the temperature you want at the tap, typically 38°C to 50°C for showers in Australian homes. The colder your incoming water, the harder the heater has to work, which is why a unit sized adequately for a Perth summer home often falls short in a Tasmanian winter.
Flow rate is measured in litres per minute. A standard shower uses roughly 8 to 12 litres per minute, a kitchen tap around 6, and a modern dishwasher closer to 9. Add up what your family is likely to run simultaneously during the morning rush, then look for a unit that comfortably covers that combined number. For a couple in a Brisbane apartment, a 16 L/min gas unit is usually plenty, whereas a household of five in suburban Sydney may want at least 20 L/min.
Local retailers sometimes publish sizing charts that assume ideal inlet temperatures, so it is worth asking installers for a calculation specific to your postcode. A plumber working in Ballarat will design for lower incoming temperatures than one operating in Cairns, and the same brand can therefore behave very differently across the country.
Gas or Electric for the Australian Market
| Feature | Gas tankless | Electric tankless |
|---|---|---|
| Typical flow rate | 16–27 L/min | 8–20 L/min |
| Best suited to | Larger detached homes with a gas line | Apartments, units, and homes without gas |
| Venting | Power flue through wall or roof | No flue required |
| Impact on home electricals | Minimal | High draw, may require switchboard work |
| Running cost pattern | Generally lower with natural gas | Lowest when paired with rooftop solar |
| Common Australian brands | Rinnai, Bosch, Rheem | Stiebel Eltron, Thermann, Bosch |
Most detached homes in Australia run on either natural gas, LPG, or off-peak electric tariffs, and this is the biggest factor in choosing between the two main types of instantaneous units. Gas units dominate the Australian market because they can deliver higher flow rates and handle bigger temperature rises. They vent through either a power flue through an exterior wall or a vertical flue through the roof, which determines where the unit can be installed and how the cost adds up.
Electric continuous-flow units are popular in units, apartments, and smaller homes without a gas connection. They are quieter, vent less heat into the roof cavity, and pair nicely with solar PV systems feeding daytime usage. The catch is that they draw a lot of current, so older switchboards may need upgrading, and your electrician may also need to schedule other small jobs at the same time.
When weighing options, look at the star ratings, the warranty length offered locally, and whether the brand has accredited service agents in your state. A unit without an SAA approval number is not legal to install under Australian safety rules, and a missing gas compliance certification can void both warranty and home insurance.
Installation Rules and Australian Standards
A licensed plumber must handle the water-side installation, and in the case of gas models, a licensed gas fitter is required to complete the gas connection and commissioning. The hot and cold pipework often needs to be upgraded to larger diameters to avoid pressure drops, and the unit itself is usually wall-mounted with clearances maintained for service access. Australian Standard AS/NZS 3500 covers most plumbing requirements, while AS/NZS 5601 sets the rules for gas installations.
Local councils also have a say. In some coastal Queensland councils, corrosion-resistant flue components are required because of salt exposure, while in the Snowy Monaro region of New South Wales, frost protection measures may be needed. A pre-installation site visit by your contractor should cover drainage, gas line sizing, electrical supply, and where the flue will terminate without affecting neighbours or nearby windows.
Before signing off, ask your installer for a compliance certificate and check that the warranty registration has been lodged with the manufacturer. These documents matter whenever the home is sold or the unit is serviced, and they protect you if a recall is issued years down the track.
Costs, Rebates and Long-Term Value
Upfront, a quality tankless water heater in Australia runs from roughly $900 for a small electric unit to $3,000 or more for a high-capacity gas model, with installation pushing the total closer to $2,500 to $5,000 once new pipework, flues, and electrical upgrades are added. The price climbs further when an old storage tank is removed and disposed of responsibly. Where tankless units pay you back is in the years that follow, both through lower running costs and through avoiding the mid-life replacement of a rusted cylinder.
Rebates help bridge that gap. The Victorian Energy Upgrades program has supported eligible high-efficiency replacements for years, and small-scale hot water incentives from the Northern Territory and South Australia also apply to qualifying units. Speak with your installer or your energy retailer before you commit, since paperwork often needs to be lodged before the old unit is removed to remain eligible.
For households weighing the switch, it pays to compare the running-cost saving against the install complexity in your specific home. A heritage Brisbane Queenslander with a low-pressure gas service may need more upgrades than a recently built Perth home, which can swing the payback period from three years to eight. Run the numbers, check the rebates, and choose a unit properly sized to your climate and household before signing anything.
Talk to a licensed plumber or gas fitter in your area, share the rough figures from your sizing calculation, and ask for a written quote that lists the unit, the install labour, any rebate paperwork, and the warranty terms side by side. While you are planning the job, it can also be a good moment to revisit other efficiency upgrades around the house, from adding a hot water recirculation pump to installing a dimmer switch in the main living areas. Bookmark product pages and manufacturer brochures as you compare them, but be mindful of how those sites handle your data by glancing at their privacy policy before you sign up for quote requests or warranty registrations.