The five main types of hot water systems are electric storage, gas storage, continuous flow, solar and heat pump, and the right one for a Geelong home depends on how much hot water you use at once, what energy you have, and where the unit can go. Victoria’s rules are also changing: from 1 March 2027, a mains gas hot water system in an existing home will generally need to be replaced with an electric option, such as a heat pump, when it reaches the end of its life.
This guide compares the types side by side, explains what the 2027 rules mean for you, and finishes with a quick shortlist for common Geelong households. Rules and rebates in this guide were checked on 15 October 2026.
- The five types of hot water systems at a glance
- Gas vs electric hot water: Victoria’s 2027 rules
- What to weigh up for a Geelong home
- Rebates: what to check before you buy
- A quick shortlist for common Geelong homes
- Frequently asked questions
The five types of hot water systems at a glance
- Electric storage. A tank heated by an element, often on an off-peak tariff. Simple and reliable, but its running costs depend heavily on your tariff, and once the tank is empty you wait for it to reheat.
- Gas storage. A tank heated by a gas burner. It recovers quickly, which suits busy households, but it is affected by Victoria’s 2027 rules if it runs on mains gas.
- Continuous flow (instantaneous). Heats water only as you use it, so it doesn’t run out. Most are gas, and they still need power to run. They need enough flow and the right size to keep up when several taps run at once.
- Solar. Collectors on the roof heat water into a storage tank, with a gas or electric booster for cloudy days and winter. It works best with a north-facing roof.
- Heat pump. Works like a fridge in reverse, pulling heat from the air into the water. It uses far less electricity than a standard electric system, but it has a fan and compressor, and it heats more slowly on cold mornings.
For a closer look at individual types, see our guides to heat pump hot water systems, how solar hot water works and the pros and cons of electric hot water.
Gas vs electric hot water: Victoria’s 2027 rules
This is the biggest change to the choice in years, so it’s worth getting right. Here is what the Victorian Government’s regulations say, as checked on 15 October 2026:
- Existing homes, from 1 March 2027: a mains (reticulated) gas hot water system generally can’t be replaced with another mains gas system. When yours reaches the end of its life, it will need to be replaced with an electric option, such as a heat pump.
- Exemptions apply: for example, where there isn’t enough space indoors or a suitable outdoor spot for an electric system, or where fitting one would mean altering the main switchboard. Replacing a gas system under its warranty is also exempt.
- Repairs are still allowed: gas hot water systems can still be repaired if they break down.
- Bottled LPG is not affected, and the government has said there are no changes to gas cooking or to heating for owner-occupiers in existing homes.
- New homes, from 1 January 2027: new homes can’t get a new mains gas connection, so they will be built all-electric.
What this means in practice: if your mains gas system is getting old, it’s worth planning the switch now, rather than making a rushed decision on a cold morning after it fails. Our tips on extending the life of a gas hot water system can buy you time while you plan.
What to weigh up for a Geelong home
How much hot water you use at once
Sizing is about peak demand, not the daily total: two showers running while the dishwasher fills is what an undersized system can’t keep up with. We size a replacement properly based on your peak simultaneous demand, so the morning rush doesn’t end in a cold shower.
The energy you have, and the energy you plan to keep
If you have rooftop solar panels, a heat pump can often be set to run during the day to use your own power. If you’re on an off-peak tariff, an electric storage tank or heat pump can do its heating in the off-peak hours. If you’re planning to disconnect from gas altogether, an electric option avoids paying gas supply charges for hot water alone.
Space, noise and placement
Heat pumps and outdoor storage tanks need a spot with airflow and access for servicing. A heat pump’s fan and compressor make a low hum, so it’s best kept away from bedroom windows, yours and your neighbours’. Solar works best with a north-facing roof, and continuous flow units need a wall position close to gas, water and power.
Geelong’s climate
Geelong’s cool winters matter most for heat pumps and solar. A heat pump still works in winter, but it recovers more slowly on cold mornings, so the tank needs to be sized with that in mind. Solar systems lean on their booster through winter and long cloudy spells.
Rebates: what to check before you buy
Solar Victoria runs a hot water rebate for eligible heat pump and solar hot water products under its Solar Homes Program. Eligibility rules apply, and as checked on 15 October 2026 they include:
- You own and live in the home, and it’s an existing property
- Household income and property value are under the program’s limits
- The address hasn’t already had a hot water or solar battery rebate under the program
- The system being replaced is at least three years old
- You use an authorised hot water retailer and an eligible product, and the rebate is applied for before installation (Solar Victoria makes an exception for emergency replacements, where you can install first and prove eligibility as soon as possible afterwards)
Rebate rules and amounts change, so check the current details on Solar Victoria’s website before you commit to a system.
A quick shortlist for common Geelong homes
- Busy family, mains gas, system near the end of its life: plan for a heat pump or solar-electric system before the old unit fails, as a like-for-like gas replacement generally won’t be allowed from 1 March 2027.
- Home with rooftop solar panels: a heat pump set to run in the middle of the day is often a strong fit.
- Small household or unit with limited space: a compact electric storage system or a smaller heat pump, depending on where it can go.
- Large north-facing roof and steady daytime use: solar with a booster.
- New build: all-electric, usually a heat pump or solar with an electric booster.
Every home is different, so treat this as a starting point. When you’re ready, our hot water system repair and installation team can look at your home, explain the options and give you a fixed price before any work starts. Call 0447 134 432.
Frequently asked questions
What are the main types of hot water systems?
The main types of hot water systems are electric storage, gas storage, continuous flow (instantaneous), solar and heat pump. Storage systems keep a tank of hot water ready, continuous flow heats water as you use it, and solar and heat pumps use the sun or the surrounding air to cut running costs.
Can I still replace my gas hot water system with gas in Victoria?
Until 1 March 2027, yes. From that date, a mains gas hot water system in an existing home generally can’t be replaced with another mains gas system, although exemptions apply, such as a lack of space for an electric unit. Bottled LPG systems are not affected. These rules were checked on 15 October 2026.
Can my gas hot water system still be repaired after 2027?
Yes. The Victorian Government has confirmed gas hot water systems can still be repaired if they break down. The 2027 rules apply when a mains gas system is replaced, not when it’s repaired. If yours has a fault, see our guide to no hot water checks first.
Does a heat pump work in Geelong’s winter?
Yes. A heat pump works through a Geelong winter, but it heats more slowly when the air is cold, so it needs to be sized for your household’s peak use. Placing it with good airflow and away from bedroom windows also helps it run well and keeps the neighbours happy.
Is there a rebate for heat pump hot water in Victoria?
Solar Victoria offers a hot water rebate for eligible heat pump and solar hot water products, as checked on 15 October 2026. Eligibility depends on things like owning and living in the home, income and property value limits, and the age of your current system. Check Solar Victoria’s website for the current rules before you buy.
Sources
The official pages this guide is based on, checked on 16 October 2026:
