Hot water heating accounts for around 30% of the average household energy bill, so choosing the right system for your needs can make a noticeable difference. Here are some things you need to consider before buying and installing a continuous hot water heater. 

Types of hot water heaters 

There are several types of water heaters available on the market today; each has its own advantages and disadvantages based on your household’s needs. 

The electric hot water cylinder is the most common type of hot water heating in New Zealand and is said to be the most expensive way to heat your water. This system uses an electric element to heat the water to 60 degrees, which is stored in an insulated tank or cylinder. 

Gas continuous hot water heaters use a Califont which burns gas to heat the water instantly. The amount of hot water is limitless, and the temperature can be set.

Heat pump heaters use a compressor to extract energy from the outdoor air to heat water, which is stored in a hot water tank.  


Gas continuous flow hot water heating depends on whether you can access reticulated gas, which is only available in certain areas in New Zealand. While the system runs on both natural gas and LPG, the running costs are greatly affected by the source of the gas. 

Running costs 

It costs approximately $750-$950 a year to run a gas continuous hot water heater on reticulated gas or reticulated LPG for a three-person household. Running the same household with 45kg LPG bottles will cost approximately $850-$1,250. The running costs decrease significantly if you already have a gas supply for use, such as heating or cooking. 

In comparison, the running cost for a heat pump water heater is estimated to be $150-$650 a year, depending on the electricity rate and average outdoor temperature. 

Installation costs 

The cost of installing a new gas continuous flow water heater can be expensive if you already have a hot water cylinder that is working effectively. Installing a new gas continuous flow hot water heater can cost about $2750 – $3750 and can be more expensive as a registered gas fitter and plumber is required. Installation costs are estimated to be 30%-40% more than that for a hot water cylinder. 

A new heat pump water heater costs about $4,000-$8,000 to install. 

While these two options may seem more expensive than the conventional hot water cylinder, their running costs are far less expensive and a gas continuous flow water heater provides a limitless supply of water. 

Storage space

Electric hot water cylinders and heat pump water heaters heat the water and store it inside an insulated tank or cylinder, which takes up space inside the house. Heat pump water heaters can be installed outside; however, they do not work as efficiently in cooler temperatures and are not suited to colder parts of New Zealand. 

Gas continuous flow systems are suited to homes with small spaces as the system is mounted to the wall and does not have a tank or cylinder, taking up less space inside. 

Energy efficiency 

Older hot water cylinder systems are not as energy efficient as gas continuous heating systems or a heat pump water heater as they are poorly insulated, which can lead to heat loss. 

Heat pump water heaters are more energy-efficient as they extract heat from the air outside. However, they work most efficiently at temperatures above 6-7°C and will be less efficient in winter. At temperatures exceeding 6-7°C, they are up to 2-3 times better than a standard hot water cylinder. 

Most gas continuous flow systems incorporate an electronic ignition system relying on 240 Volts, the system does not use any additional power. The running costs are, therefore, limited to the cost of gas. However, because of the system’s reliance on an electronic ignition source, you will not have hot water during a power outage. 


When choosing hot water heating it is also important to consider the capacity of your system. 

While heat pump water heating is recommended for households with moderate to high hot water usage, it is also less efficient with low water use (1 or 2 person households).

Gas continuous flow systems supply a limitless amount of hot water, and they come in a range of sizes that deliver between 16 litres to 32 litres of hot water per minute. It is important that the water heater size is suitable for your home; if your unit is undersized, you may not achieve the temperatures and pressure you are used to or expect. 

Digital displays/temperature control

Heat pump water heaters and water cylinder systems do not have a digital display with the temperature or have the ability to allow the user to select specific water temperature. The temperature in the tank is set to 60 degrees at all times to prevent the growth of Legionella species which can cause Legionnaires’ disease.

Gas continuous hot water systems have digital controllers that allow you to select the specific water temperature at any given time. As the water is heated on demand, the temperature does not have to be set at 60 degrees and can be set much lower based on the household requirements. This allows you to fill a bath without adding cold water and is a great safety feature, especially with small children. 

Water pressure

Water from heat pump water heater systems and hot water cylinders is supplied from the tank. The water pressure can be changed according to your household needs and preferences.

The gas continuous flow systems revert to the mains pressure as the water is heated on demand. Having mains pressure is the preferred option as you can still have multiple taps and showers running hot water at the same time without flow dropping significantly. Low-pressure systems are common in older homes, but limit the amount of water being heated at any given time. 

The environment

As water from the heat pump water heater and a hot water cylinder is already heated, the water will come out warm almost instantly. In comparison, the gas continuous flow system tends to waste more water, as you will need to wait for the water to heat up. This may be important in households that are supplied by tank water or metered water. 

While burning gas is relatively clean, greenhouse gas emissions contribute to climate change; these factors should be considered carefully if you run an environmentally friendly household. 

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