Hot water options

Last updated: 9 August 2023

hot water options

Cut your power bill by choosing an efficient hot water system and cutting down on wasted water.

Hot water for less

To get the most heat from the least amount of non-renewable energy, go for a heat pump hot water system. Gas hot water systems use fossil fuels and release the highest greenhouse gas emissions. 

Saving hot water

There are several easy ways to cut down on your use of hot water without sacrificing your lifestyle:

  • Fit water-efficient showerheads with a WELS rating of 3 stars or higher.
  • Fit water-efficient taps. Consider having your hot and cold taps separate. It's more common to have a mixer these days – make sure the handle is left in the cold position so it doesn't draw hot water unless you need it.
  • Use cold water for washing clothes, rinsing, filling the jug etc.
  • If you have a hot water cylinder, turn off the water heater when you go on holiday.
  • Have showers instead of baths and keep your showers relatively short.
  • Choose water-efficient household appliances.
  • Fix leaks and drips.
  • Don't run the hot tap unless you need hot water.

Water heating options

Heat pump water heaters can be expensive to buy but are extremely efficient and use highly renewable electricity. 

EECA's Gen Less website has more information on what to consider in a new hot water system.

Heat pump water heating

Heat pumps use electricity far more efficiently than ordinary electric water heaters. They are usually used for space heating, but some are designed to heat water.

They work by extracting heat from the air outside, using a process that's like a refrigerator working in reverse.

There are two main types of systems:

  • an all-in-one system, where the heat pump is part of the hot water cylinder; and
  • a split system, where the heat pump is located outside and the hot water cylinder (which can be a modern electric cylinder) is located inside the house.

Although heat pump hot water systems are more expensive to purchase than a standard electric hot water cylinder, their efficient operating costs mean that they are a good, albeit long-term investment.

Heat pumps work most efficiently at warmer outside temperatures (above 6-7°C) at which they are up to 2-3 times better than standard electric hot water cylinders. However, they lose efficiency as the temperature outside gets lower, so they are less efficient in winter.

Ask suppliers for the heat output figures at an external air temperature of 2°C – the higher the figure the better. They are particularly suitable for temperate to warm climates.

New heat pumps have ozone friendly gases. However, in some older heat pumps, the gas used to extract heat is harmful to the ozone layer if it escapes. Because of this, old heat pumps should be disposed of carefully – contact your local landfill for advice on how to do this.

Another consideration is the global warming potential (GWP) of the refrigerant gases in heat pumps. Some refrigerant gases are over a thousand times more harmful to our climate than CO2. Ask your supplier about the type of refrigerant gas and its GWP.

It's worth choosing your system carefully as some are better than others.

Hot water heat pumps can be noisy. Install the external unit away from bedrooms (yours – and your neighbour's).

Solar water heating

Solar hot water heaters use the sun's free, unlimited energy. A well-installed system should be able to deliver 50 to 75 per cent of hot water heating over the year, in most parts of the country. However, the concept of solar hot water heating has a few challenges in New Zealand:

  • the high initial cost compared with other water-heating options
  • difficulty in ensuring the system’s designed and installed correctly
  • difficulty in telling whether the system is working properly due to the non-user friendly interfaces
  • needs annual maintenance.

However, there are two situations where solar is particularly worthwhile:

  • when used in conjunction with a wetback on a wood or pellet burner that’s used as a primary space heating source over the colder months
  • when it’s used as a very simple pre-heater with no controllers, or pumps, and plumbed into the pipe feeding into your water-heating cylinder.

To maintain a hot water supply when the sun doesn't shine, solar hot water systems usually have backup heating – so you will still need to consider the pros and cons of other water heating systems too.


A wetback is a useful way to heat water in winter if you are replacing or installing a wood or pellet burner near your hot water cylinder. Ideally, the hot water cylinder should be located as close as possible to the wood or pellet burner to minimise the heat losses through the pipes. Larger diameter water pipes (25mm) are recommended.

Wetbacks can complement solar hot water, particularly to ensure year-round hot water in areas with low winter sunshine (for example, Dunedin/Southland).

Wetbacks are most useful in areas with a cold climate and a long heating season, and where the wood or pellet burner heats the house well so there is surplus energy to heat the water. They are also very useful in areas with low security of energy supply and abundant wood, enabling a greater degree of self-sufficiency and resilience.

Many councils have regional clean air plans which strictly regulate the use of wood and pellet burners. The Ministry for the Environment has a list of Authorised woodburners on the Ministry for the Environment website lists the woodburners that meet New Zealand's air quality standards.

Gas and electric water heating

Most New Zealand homes use gas or electricity to heat their water. The use of both gas and electricity results in the release of greenhouse gas emissions.

Although the vast majority of New Zealand’s electricity is generated using relatively clean hydropower, there is still some thermal generation using fossil fuels in the mix. However, the non-renewable portion of New Zealand's electricity generation is expected to further reduce over time.

This means that electric hot water heating is more environmentally friendly than gas hot water heating.

Gas/LPG water heating

Gas or LPG water heating includes hot water cylinders and instant gas hot water systems.

Gas cylinders need to be located in a well ventilated area and flued to remove exhaust gases. Heat losses from gas hot water cylinders are higher than electric cylinders. It's not safe to put a hot water cylinder wrap on a gas cylinder.

Hot water cylinders and pipes has more information.

Instant gas hot water systems are more efficient than gas cylinder systems, and provide continuous hot water that never goes cold, as the water is heated as it passes through the heater. Gas is only used when a hot water tap is turned on. Condensing instant gas hot water systems are the most efficient gas water heaters and can be up to 95 per cent efficient.

Electric water heating

Most New Zealand homes have an electric hot water cylinder.

Older pre-2004 hot water cylinders are often poorly insulated, leading to heat loss. You can wrap electric hot water systems with more insulation.

Hot water cylinders and pipes has more information.


Costs – gas and electricity

The cost of electricity and gas to the consumer includes the line charges and connection fees. If you don't use much energy these can be a large part of your monthly bill.

If you have solar photovoltaic (PV) power, an electric hot water cylinder can be a good option for using surplus power instead of feeding it back into the grid. There are sophisticated controllers available that can spill surplus PV power into up to three other loads including hot water, underfloor heating systems or air conditioning.

Natural gas attracts a fixed charge and this should be factored into your calculations, if you are considering switching from electricity to gas. Gas will be more cost-effective, if you use it for other appliances as well as hot water. LPG does not have a standing charge, but a yearly rental has to be paid for the use of two 45kg LPG cylinders.

To estimate how much you could save by switching your power deal, see different retailers' offers and decide whether to switch, go to the Powerswitch website.

This information is published by the Ministry of Business, Innovation and Employment’s Chief Executive. It is a general guide only and, if used, does not relieve any person of the obligation to consider any matter to which the information relates according to the circumstances of the particular case. Expert advice may be required in specific circumstances. Where this information relates to assisting people: