New South Wales: Rolling back on phasing out electric hot water systems

NSW Government Press Release: NSW Government are rolling back the ban on electric hot water system. What does this mean for the consumer and the future of hot water in NSW? We have had a look at a few key factors and variables.


The NSW government have made a major U turn on the phase out of electric heaters by rolling back the legislation and allowing a like for like replacement of electrics. This action brings forward several questions and isn’t good news for NSW hot water running costs.

Phase out was focused on saving energy and running costs. Has the cost of electricity reduced or has there been a reduction in the energy saving targets? No, electricity costs are expected to increase for the foreseeable future only putting more stress on the Australian households and demand for energy savings and renewable energy is prevalent across all media and on everyone’s lips.

Electric HWS are energy intensive units. Have electric HWS been developed to save energy and run with better efficiencies? No, electric HWS are energy intensive dinosaurs. The rated input power is 1 kW that produces heating capacity of 1 Kw, with the average system making up 30% of the annual electricity bills. An average family home will use between 7 – 10Kw per day on heating their water.

Electric units are cheap to buy but expensive to run. Are all alternatives HWS expensive to buy and run?  No, there are new units available on the market that only cost a few extra hundred dollars to purchase but have dramatic savings and a payback period of 2 years for the majority of homes. STC’s are still available for all energy efficient products on the register, helping the price of the units to be even more competitive.

There are cheaper off peak tariffs available for hot water. Are the tariffs going to continue to rise and will there be an introduction of new feed in tariffs? Yes, there have been large increases predicted. We have seen over the past 12 months with the 40% addition. These expected increases coupled with the additional feed in tariffs and smart meters are likely to continue increasing the costs for electricity across Australia.

Electricity is going to continue to increase. Are electric HWS the future and solution to hot water in Australia? No, they have already been identified as energy intensive and costly HWS and this is why the Government introduced the phase out of the electric system. By rolling back the legislation, the government are allowing the installation of these expensive HWS and household’s will be stuck with the rising running costs of these units for 10 or more years, which can equate to thousands of dollars lost in running costs.

Consumer choice should dictate water heating – not the Government. Who controls the running costs of electricity & gas and who dictates the rebates available? Businesses and the Government control these two major factors in hot water. Given the choice, consumers will purchase the cheapest product on the market and then be stuck with paying the ever increasing electricity bills. Then they will look to the Government to introduce rebates, discounts and legislation to control energy prices and help the costs. Therefore the Government need to control these variables and the market ensuring future homes can afford hot water.

In conclusion the immediate effects of the roll back will come as a welcome relief to home owners for installing HWS and their immediate cash flow. However in the long run this is going to cost households a great expense and the issue of running costs and energy consumption will come up again. Electric HWS are not the future and by rolling back the legislation, the government are just hiding the issues that will later cripple Australian households. There are products available that can meet the demand and solve these issues, but investment is required to educate and promote these alternative products.


By Simon Baird 

Scroll to Top