Hot Water Running Costs Compared: Perth 2026 Energy Prices

Hot water systems usually sit unnoticed in the background until a cold shower wakes you up to the reality of a breakdown. We founded Hot Water System Perth in 2021 because we saw too many homeowners making panic purchases that locked them into years of expensive energy bills.

Understanding the true running costs of different hot water systems helps you make informed decisions about repairs, replacements, and upgrades. This guide compares all major system types using current Perth energy prices.

Current Perth Energy Prices (2026)

Our team monitors tariff changes closely to ensure our advice reflects what you actually see on your bill. In July 2025, Synergy adjusted their rates again, and understanding these new figures is critical for calculating your long-term costs.

Electricity Rates (Synergy)

Most Perth households are on the standard Home Plan (A1), but we are seeing a massive shift toward the Midday Saver tariff. This newer “Time of Use” plan offers incredibly cheap electricity during the day, which is a game-changer for electric hot water systems with timers.

Tariff Type	Rate (approx.)
Home Plan (A1)	~32.37 c/kWh
Midday Saver (Super Off-Peak 9am-3pm)	~8.62 c/kWh
Midday Saver (Peak 3pm-9pm)	~53.84 c/kWh
Midday Saver (Off-Peak 9pm-9am)	~23.69 c/kWh

Daily supply charge: ~$1.16 - $1.29/day

Natural Gas Rates (Alinta Energy)

Gas was once the cheap alternative, but rising usage rates and unavoidable supply charges have changed the math.

Component	Rate (approx.)
Usage (Standard)	~4.55 - 6.69 c/MJ
Daily Supply Charge	~$0.87/day

Why this matters: Even if you go on holiday and use zero gas, you still pay over $315 per year just to have the meter connected.

Baseline Assumptions

We base these calculations on a typical Perth family home to give you a realistic comparison.

• Household: 4 people
• Daily usage: 200 litres of hot water (approx. 50L per person)
• Temperature rise: 30°C (heating water from 20°C ambient to 50°C delivered)
• Annual energy required: Approximately 8,400 MJ or 2,333 kWh equivalent

System-by-System Running Costs

1. Electric Storage (Standard Tariff)

How it works: An electric element heats water stored in an insulated tank, drawing power whenever the thermostat drops.

Efficiency: ~90% (energy in vs. heat out), but standby heat loss occurs 24/7.

Calculation:

• Annual electricity: ~4,000 kWh (including heat loss)
• Standard A1 Rate (32.37c/kWh): ~$1,295/year

Insider Tip: Many older homes in suburbs like Morley or Balcatta still have these “guiteaters” installed. If you have one, you are likely paying over $300 a quarter just for hot water.

2. Electric Storage (Midday Saver / Solar Timer)

How it works: We install a simple timer to ensure the system only heats up between 9:00 AM and 3:00 PM.

Calculation:

• Annual electricity: ~4,000 kWh
• Super Off-Peak Rate (8.62c/kWh): ~$345/year

Why this works: By targeting the “Super Off-Peak” window, you pay the lowest possible rate. However, you need a large enough tank (315L+) to ensure the water stays hot for evening showers.

3. Gas Storage

How it works: A gas burner keeps a tank of water hot, maintaining temperature throughout the day and night.

Efficiency: Typically 3-4 star (75-85%).

Calculation (4-star system):

• Annual gas: ~10,000 MJ
• Gas rate (~5.6c/MJ average): ~$560
• Daily supply ($0.87 x 365): ~$317
• Total: ~$877/year

Common Pitfall: Many people forget the daily supply charge when comparing gas. That fixed cost makes gas storage one of the most expensive options for smaller households.

4. Gas Instantaneous (Continuous Flow)

How it works: The unit heats water only when you turn on the tap, eliminating the need for a storage tank.

Efficiency: Typically 6-star (85-95%). Models like the Rinnai Infinity B26 are standard in Perth.

Calculation (6-star system):

• Annual gas: ~9,000 MJ
• Gas rate (~5.6c/MJ): ~$504
• Daily supply ($0.87 x 365): ~$317
• Total: ~$821/year

Insider Tip: While efficient, these units require a high gas flow rate. We often see older homes requiring a gas pipe upgrade (from 15mm to 20mm) to run these effectively, which adds to the upfront installation cost.

5. Heat Pump Hot Water

How it works: It works like a reverse-cycle air conditioner, extracting heat from the ambient air to heat the water.

Efficiency: COP of 3-4 (300-400% efficiency).

Calculation (COP 3.5 on Standard Tariff):

• Annual electricity: ~1,000 kWh
• Standard Rate (32.37c/kWh): ~$323/year

Calculation (COP 3.5 on Midday Saver):

• Super Off-Peak Rate (8.62c/kWh): ~$86/year

Insider Tip: Noise matters in Perth’s suburbs. Regulations require units to be installed away from neighbours’ bedrooms—typically 3 to 5 meters. Brands like iStore and Reclaim Energy are popular here because they operate quietly (around 37-40dB), keeping you compliant with council noise rules.

6. Solar Hot Water (Electric Boost)

How it works: Roof-mounted collectors heat the water, with an electric element kicking in on cloudy days.

Solar contribution: Typically 60-80% in Perth’s climate (Zone 3).

Calculation (70% solar contribution):

• Annual electricity (boost only): ~1,200 kWh
• Standard Rate (32.37c/kWh): ~$388/year

Comparison: These systems are robust but lose efficiency in winter. You also lose valuable “roof real estate” that could otherwise be used for solar power (PV) panels.

7. Solar Hot Water (Gas Boost)

Calculation (70% solar contribution):

• Annual gas (boost): ~3,000 MJ
• Gas rate (~5.6c/MJ): ~$168
• Daily supply: ~$317
• Total: ~$485/year

Analysis: The fixed gas supply charge really hurts this option. Unless you use gas for cooking and heating as well, paying $300+ a year just to boost a solar system is rarely economical.

Side-by-Side Comparison

System Type	Annual Cost	10-Year Cost*
Electric Storage (Standard)	$1,295	$12,950
Electric Storage (Midday Saver)	$345	$3,450
Gas Storage (4-star)	$877	$8,770
Gas Instantaneous (6-star)	$821	$8,210
Heat Pump (Standard)	$323	$3,230
Heat Pump (Midday Saver)	$86	$860
Solar Electric Boost	$388	$3,880
Solar Gas Boost	$485	$4,850

*Does not include inflation or maintenance costs.

The verdict: A heat pump running on the Midday Saver tariff is the clear winner for Perth households in 2026.

Real-World Factors That Affect Costs

Household Size & Usage

Larger families tip the scales further toward efficient systems.

• 2 people: Low usage makes the high fixed supply charge of gas even less efficient per shower.
• 6 people: High usage makes the low running cost of a heat pump pay for itself extremely quickly (often under 2 years).

Water Quality & Hardness

Perth water is generally good, but areas in the Hills (like Kalamunda or Mundaring) can have harder water.

• Action: If you live in a hard water area, checking your sacrificial anode every 3-4 years is essential.
• Recommendation: Stainless steel tanks (like those in some heat pumps) resist corrosion better than vitreous enamel tanks.

The “Fremantle Doctor” Effect

Perth’s reliable afternoon breeze cools things down, but heat pumps work on ambient air temperature, not wind chill.

• Fact: Modern heat pumps work efficiently down to -5°C.
• Result: Even on a chilly July morning in Perth (usually 5-8°C), a quality heat pump will heat water efficiently without needing a booster.

The Upgrade Question

When Does Upgrading Make Financial Sense?

Payback calculation example:

Upgrading from Electric Storage (Peak) to Heat Pump (Midday Saver):

• Installation cost (approx): ~$3,500 (varies by brand/install complexity)
• Rebate (STCs): ~$500 (Zone 3 Perth deduction included in quote)
• Annual savings: $1,295 - $86 = $1,209
• Payback period: ~2.5 years

Incentives: Western Australia falls under Zone 3 for Small-scale Technology Certificates (STCs). While state-specific rebates come and go, the federal STC scheme provides an upfront discount of around $500 for a quality heat pump in 2026.

Systems Worth Upgrading From

1. Old electric storage: The “cash burner.” Get off this immediately if you can.
2. Gas storage: Especially if it’s your only gas appliance. Disconnecting gas can save you ~$317/year instantly in supply charges.
3. Solar hot water (old): If your roof collectors are leaking or damaged, switching to a ground-mounted heat pump is often cheaper than repairing roof plumbing.

Warning: If you decide to disconnect gas completely, be aware of the disconnection fees. Alinta/ATCO typically charge a fee to remove the meter and cap the line, which can range from $60 to over $180 depending on the complexity.

Future Cost Considerations

Electricity Trends

The grid is becoming greener, and “solar soaking” (using power when the sun is up) is being aggressively encouraged.

• Trend: Tariffs like the Midday Saver will likely become the default standard.
• Opportunity: Using your hot water system as a “thermal battery” to store cheap daytime energy is the future of home efficiency.

Gas Trends

The future of residential gas in WA is uncertain.

• Trend: New developments are increasingly all-electric.
• Risk: As fewer people use gas, the network costs are shared by fewer users, likely driving daily supply charges even higher over the next decade.

Getting Personalised Cost Analysis

These calculations are illustrative, but your home is unique. Your actual costs depend on:

• Your specific suburb and roof orientation.
• Existing electrical infrastructure (e.g., do you need a switchboard upgrade?).
• Your household’s shower habits.

We can assess your current setup and provide a clear, honest breakdown of what an upgrade would look like for you. This helps you make informed decisions based on real numbers, not just assumptions.

Summary

For most Perth households:

• Heat pumps paired with the Midday Saver tariff offer the lowest possible running costs.
• Gas is becoming harder to justify financially due to high daily supply charges.
• Electric storage is only viable if you have a timer and use solar/off-peak energy.

The most expensive option (standard electric storage) costs nearly 15 times more to run than the most efficient setup (heat pump on super off-peak).

Running costs are a huge part of the puzzle, but installation quality matters just as much. We believe that investing in a quality installation today saves you from the headache of cold showers tomorrow.