Gas water heater in the technical room.

How Does Gas Hot Water Work?

Gas hot water is extremely popular in Australia, in fact gas hot water heaters make up almost half of the household water heaters used in Australia – they’re also very popular in New Zealand. The term ‘gas hot water heater’ is actually a catch-all for a number of different types of products, including storage heaters, instantaneous or continuous flow heaters and gas hot water heaters with instantaneous boosters. These systems can be run by either using reticulated or piped systems or LPG.

Storage gas hot water systems

Storage systems are designed to heat water using a burner which heats water up in a storage tank. The systems must have a pilot flame that burns continuously and ignites the main burner to heat up the content of the storage tank when necessary. The burner sits under the tank and when it is turned on heat from the burner is transferred through the tank, warming up its contents. When people in the household use the contents on the tank and it is taken from the top, more cold water enters the bottom of the storage tank. A lot of storage units come with an adjustable thermostat so they can be turned up or down, this will tell the tank what temperature to keep its contents at. When the temperature gets below the thermostat the flame will ignite and the burner will be set alight to heat the storage tank, this ensures that the gas hot water supply is kept consistently hot and also ensure that more energy than necessary is not used on keeping the burner going. Storage tanks can come in different sizes to suit different households and some units have systems to increase their efficiency by maximizing heat transfer recirculation.

Instantaneous or continuous flow systems

woman taking a shower

Instantaneous systems (sometimes also called continuous flow systems) don’t come with storage tanks. Water is heated only when it is needed by a burner which starts up when the tap is turned on. It is a very efficient system because it doesn’t heat more water than necessary and there is no heat loss. These systems can be a significant cost-saver for many households and ensure that no unnecessary energy is wasted. To get the heating to work the flow of water is slowed as it passes through a heat exchanger – this method means that these systems use a lower pressure than storage systems and usually have flow rates of around 10 to 30 litres per minute although it depends on the model.


Before you choose a gas hot water system you should ensure that it meets design requirements and efficiency regulation standards for Australia and New Zealand. Every unit must meet high standards before they can be sold in Australia and New Zealand. The potential danger associated with reticulated or LPG supply means that units must be carefully selected and installed. Products will usually have to meet minimum energy performance standards and energy ratings to be able to be installed.

These systems can be very cost-effective and often far more efficient methods of heating household water than other systems. Compared to electric units you are likely to save a lot of money, even if the upfront installation and purchase costs are slightly higher. Whether your prefer a storage system or an instantaneous system will depend on your household needs, budget and your home design. Speak to a professional installer to find out what suits your home and what you’ll need. It’s absolutely essential when working with gas hot water that you seek professional advice and guidance.