Heat Pump vs Electric vs Gas

May 15, 2025

Heat Pump vs Electric vs Gas: What’s Best for Ballarat Homes in 2025?

Choosing the right hot water system is one of the most important decisions for any home—especially in Ballarat, where cold winters and rising energy prices make efficiency a top priority. here is our take on Heat Pump vs Electric vs Gas!
In 2025, the main contenders remain:

Electric storage systems

Gas continuous flow or storage systems

Heat pump hot water systems

But which one is the smartest choice for Ballarat households today?

Let’s break down the pros, cons, running costs, and environmental impact of each—so you can make a well-informed decision.

1. Electric Hot Water Systems

Still common, but quickly falling out of favour.
Electric systems are typically the cheapest to install but the most expensive to run—especially if you’re using standard tariff electricity. They heat water using a resistive element (like a kettle), which is straightforward but energy-hungry.

Pros:
Lower upfront cost

Simple to install

Widely available

Cons:
High running costs

Not environmentally friendly

Slow to recover after heavy use

Suitability for Ballarat:
With our cold winters and growing focus on sustainability, electric systems are increasingly being phased out. Even with off-peak tariffs, they can be inefficient and costly in the long run.

2. Gas Hot Water Systems

Long seen as the go-to for reliable hot water—but is that changing?

Gas systems (either storage or continuous flow) are known for delivering consistent hot water quickly, regardless of the weather. But with gas prices rising and the push to electrify Australian homes, gas may no longer be the clear winner.

Pros:
Fast heat-up time

Works well in cold climates

More efficient than standard electric systems

Cons:
Gas prices are rising

Not considered eco-friendly

Gas infrastructure may be phased out in future

Suitability for Ballarat:
Many homes in Ballarat still use gas for heating and cooking, making gas hot water seem like the obvious choice. But with the Victorian Government encouraging homes to move away from gas, it may not be the most future-proof option.

3. Heat Pump Hot Water Systems

Efficient, future-friendly, and fast becoming the standard.

Heat pump systems work like a reverse fridge: they extract heat from the air—even on cold days—and use it to warm your water. Though they cost more upfront, their long-term savings and low emissions make them increasingly popular in Victoria.

Pros:
Up to 70% lower running costs

Eligible for government rebates

Works well in Ballarat’s climate (modern models handle cold well)

Great for households with solar power

Cons:
Higher initial cost (though offset by rebates)

May require strategic placement for airflow

Some models make a small amount of noise during operation

Suitability for Ballarat:
Despite the cooler climate, modern heat pumps are built to perform in temperatures as low as -10°C, making them perfectly suited to Ballarat conditions. Combined with rooftop solar, they’re a game-changer for energy-conscious households.

System Type	Upfront Cost (Installed)	Est. Running Cost (Annual)	Total 10-Year Cost
Electric	$1,500 – $2,500	$1,000 – $1,200	$11,500 – $14,500
Gas	$2,000 – $3,000	$800 – $1,000	$10,000 – $13,000
Heat Pump	$3,500 – $5,000 (less with rebates)	$250 – $400	$6,000 – $9,000

Note: Costs vary based on tariffs, usage, and system size. Heat pump costs can be reduced with Victorian energy efficiency rebates.

Verdict: What’s Best for Ballarat in 2025?

If you’re only thinking short-term, gas or electric may still seem appealing due to lower upfront costs. But in 2025 and beyond, heat pump hot water systems are the smart long-term choice for most Ballarat households.

They offer:

Significant savings on power bills

Lower environmental impact

Government-backed incentives

Reliable performance in cold climates

Need Advice on the Best System for Your Home?

We’re based right here in Ballarat and specialise in both general plumbing and heat pump hot water system installations. Whether you’re building, renovating, or replacing an old unit, we can help you choose the most efficient option for your needs and budget.