Gas vs electric hot water in Hobart - running cost compared
In most of Australia gas beats electric on running cost. Hobart is the exception: Hydro Tasmania's cheap hydro electricity and limited reticulated gas mean an electric storage system is often the cheapest hot water you can run here. Here is the real comparison.
Quick answer - which is cheaper in Hobart?
Unlike the mainland, in Hobart electric storage on an off-peak tariff is usually the cheapest conventional system to run, and a heat pump is cheaper still. Natural gas is the cost winner in Sydney or Melbourne, but Hobart's limited gas network means many homes are on bottled LPG, which is expensive per unit of energy.
Install cost - gas vs electric in Hobart
| System | Typical Hobart install (2026) |
|---|---|
| Electric storage (supply + install) | $720 – $2,250 |
| Gas storage (supply + install) | $1,075 – $3,150 |
| Continuous flow gas | $1,350 – $2,700 |
| Heat pump (after rebates) | $1,800 – $4,500 |
Why Hobart is different - the Hydro effect
Tasmania's grid is overwhelmingly hydro-powered, and storage hot water can run on a cheap controlled-load (off-peak) tariff that heats the tank overnight. At the same time, reticulated natural gas covers only parts of greater Hobart - plenty of suburbs have no mains gas at all and rely on LPG bottles. LPG carries a high per-megajoule cost plus bottle rental or delivery, so the gas running-cost advantage that holds on the mainland often disappears here.
10-year cost comparison - a New Town household
| System | Installed | Annual running | 10-year total |
|---|---|---|---|
| Electric storage (off-peak) | $1,350 | $630 | $7,650 |
| Continuous flow gas (natural) | $1,975 | ~$650 | ~$8,475 |
| Continuous flow gas (LPG) | $1,975 | ~$1,100 | ~$12,975 |
| Heat pump (after rebate) | $2,700 | ~$280 | ~$5,500 |
The heat pump wins over ten years; electric storage on off-peak is the cheapest of the conventional options; and LPG gas is the most expensive way to make hot water in Hobart. See the heat pump guide and the continuous flow guide for the detail behind these numbers.
Frequently asked questions
Is gas or electric hot water cheaper in Hobart?
Electric storage on an off-peak tariff is usually the cheapest conventional system to run in Hobart, thanks to cheap Hydro electricity. The mainland gas advantage does not hold here, especially where the home is on bottled LPG rather than natural gas.
Does Hobart have natural gas?
Only in parts. The reticulated natural gas network covers some of greater Hobart, but many suburbs have no mains gas and rely on LPG bottles, which are far dearer per unit of energy. Check coverage for your street before choosing gas.
What is the cheapest hot water system to run in Hobart?
A heat pump has the lowest running cost overall. Among conventional systems, electric storage on a controlled-load (off-peak) tariff is cheapest, while LPG gas is the most expensive to run.
Should I switch from gas to electric in Hobart?
Often yes if you are on LPG - electric storage on off-peak or a heat pump will usually cost less to run. If you have natural gas with a continuous flow unit the gap is smaller, but a heat pump still beats both over its life.
What is off-peak or controlled-load hot water?
It is a separate, cheaper electricity tariff that heats your storage tank overnight. It only works with a storage cylinder, not a continuous flow unit, which is part of why storage stays competitive in Hobart.
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