Gas or a heat pump for hot water? Sizing the tank from a year of gas data

My water heater is an instantaneous gas unit, the kind that fires up when a tap opens and heats the water as it flows. It is the last thing in the house that burns gas. When it dies I would rather replace it with a heat pump and have the gas taken away altogether, but I wanted three answers first: what hot water costs now, how big a heat pump's tank has to be so nobody gets a cold shower, and whether the sums still work once the heat pump is paid for.

Like the EV question, most answers online assume an average household. Because the water heater is the only gas appliance here, every cubic metre through the gas meter is hot water, so this house can measure its own.

Metering the gas and water

None of this works without the house measuring its own gas and water, and that part is worth having whatever heater you end up with.

One small board reads both meters. It is an ESP32 running ESPHome, powered over its network cable, mounted near the meters. The water meter has a clip-on pulse sensor that ticks once per litre. The gas meter's dial has a magnet in its last wheel, put there for exactly this, and a few-dollar reed switch resting in the recess under it ticks once per 10 litres of gas. Nothing is opened, no seal is broken, and nothing is stuck to the meter: it belongs to the gas network, and they can swap it at any time.

Home Assistant prices every tick the way the bill does. The gas tariff's blocks, the water tariff's tiers and both daily supply charges are in it, so every day has a dollar figure. Given the volumes on a real bill, the model reproduces the gas and water bills to the cent.

The meters check each other. The water heater is the only gas appliance here, so gas and hot water always run together. One test with both counting put the heater at about 80% efficient: 35 litres of hot water took enough gas for 44. If the gas switch counted every turn twice, the same sums would say 161%, which is impossible. That makes the pair a permanent cross-check.

Both checks have earned their keep. The water counter's first firmware missed between a sixth and a third of the litres; the bill showed it, and the counter was rewritten to catch every pulse. Then the gas network swapped the gas meter in September. The new meter's magnet closed the switch twice per turn, and for a month Home Assistant read 73% high, until a reading off the dial disagreed with it. A four-second filter fixed it the same morning, and the month was rescaled from two dial readings. That month's daily totals are right, but its hour-by-hour shape is not, so it is left out of everything below.

The same data watches for trouble. The water counter can see a leak of half a litre to a litre an hour. A 200-litre-a-day leak costs about $65 a quarter here, and it rings a phone long before the bill would. The tap-left-on and slow-leak thresholds came from the house's own history, not a guess.

For this question, the gas meter is a hot-water meter. It gives two sources:

• A year of bills. Four bills from late July 2025 to late July 2026, each from an actual meter read at both ends: about 9,500 MJ of gas.
• Two months of hourly readings. The bills say how much; the hours say when. The tank size depends on the busiest stretches, not the average.

Use grew between the two years, most of all in summer: about 73% more over the Christmas months and 28% more from February to April than the year before. The most recent year reflects the house as it is now, so that is the one I've used.

What hot water costs now

That is at today's prices, which rose three times in that year, about 24% in all. The house never uses enough to reach the cheaper second block of the gas tariff, so all of it is charged at the dearer first-block rate.

The supply charge is 37% of the bill, and it doesn't change with use. A house that keeps the gas connected for nothing but a cooktop or a barbecue keeps paying most of the $385. That is the case for taking the gas away entirely, not just using less of it.

Taking it away costs money now. Until mid-2026 SA's gas network removed meters for free and recovered the cost from everyone's tariffs. Since 1 July 2026 a permanent removal (the pipe cut and capped in the street and the meter taken off) costs about $283 including GST under the AER's 2026 decision. The retailer's fee schedule splits that into $180 for the service line and $102 for the meter. The regulator put the real cost at about $1,000 and spread the rest across the network until 2031. The $283 is back in nine months of supply charges.

What a heat pump would cost to run here

A heat pump moves heat from the air into the water. The ones on sale here are rated at 4.5 to 6 units of heat per unit of electricity in warm weather; I've used 3.5 over a year to allow for winter. The water needs about 2,100 kWh of heat a year at the taps, plus whatever a tank loses standing still. Only one maker I found publishes that loss, 2.5 kWh a day for a 225-litre tank, so I've used 2.5. All up, 700 to 1,200 kWh of electricity a year.

The power plan here has four prices, the same ones as in the EV post: free from 12:00 to 15:00 for the first 24 kWh a day, about 20c a kWh either side of that, about 35c overnight and about 59c at peak. The house already uses about 10 of the free 24 kWh on a typical day, home battery included, and a heat pump adds 1 to 4 kWh, so the cap isn't the limit.

At 3.5 units of heat per unit of electricity, a year of hot water costs:

Even the worst row saves more than the supply charge alone, and the free window turns the whole bill into nothing. The free window also happens to be the warmest part of the day, which is when a heat pump works best. Whether it can do all its heating in those three hours depends on the tank.

How big a tank so it never runs out

An instantaneous heater never runs out: it heats whatever flows. A tank holds a fixed amount of heat, so the questions are how much the house uses between reheats, and how quickly the heat pump can put it back.

From the hourly readings, scaled up by 31% to match the winter bill (colder mains water, longer showers), the heat drawn at the taps was:

Most of it goes in two bursts, one in the morning and a bigger one in the early evening.

A tank stored at 60 °C holds about 0.16 MJ per litre that can be drawn before the water gets lukewarm. That figure assumes mains water at 15 °C in winter, warmer than it probably is, so the sums err towards a bigger tank. Three things follow:

1. Under about 200 litres, one evening can empty it. The heaviest three hours need about 190 litres' worth on their own.
2. To heat only in the free window, it needs about 300 litres to carry the house from 15:00 to noon the next day, standing losses included. A heat pump storing at 63 °C, as the CO2 models do, gets there in about 280.
3. Heating power matters as much as size. Rated outputs are measured in mild air, so I've allowed 20% less in winter. Putting back an average winter day's heat in three hours then takes about 4 kW on the label, and the heaviest day needs more than 6. A unit under 3 kW can't refill a tank in the window, however big the tank.

I ran the two months of hourly readings through the spec sheets of heat pumps sold here, hour by hour: heat drawn, heat lost, and heat added in the free window, in winter at 80% of the rated output. Each one was allowed to top up outside the window whenever the tank fell below 15%. Every unit over 3 kW kept up. Those under 3 kW ran short for an hour or two in the last column, because an evening drew heat faster than they could make it. What the size and the power change is what the top-ups cost:

The last column allows for use growing another quarter, as it grew in the past year. The top-ups are priced at whatever hour the tank runs low, often the evening peak, so a smarter controller would make them cheaper still. A small tank with a strong heat pump (the 160-litre CO2) never runs out, but it pays for it every evening.

For this house that points to about 300 to 315 litres with at least 4.5 kW of output. That size does almost all its heating in the free window with room to grow. A 270-litre unit at about 4 kW also works for less money and needs topping up on heavy winter days, about $70 to $85 a year. The makers' own charts land in the same place: Solar Victoria's guide allows 50 litres a person a day plus half a day spare and puts a family home at about 300 litres.

One practical check: the timer has to run from 12:00 to 15:00 exactly. Some units only offer a fixed solar mode, such as 10:00 to 16:00, which would spend its first hours on shoulder-rate power. Several have an input for a solar or smart-home signal, which Home Assistant can drive.

What it costs to buy

Adelaide prices from 2025 and 2026, installed:

The heat pump rebates come in two parts:

• Federal certificates (STCs). These units earn 14 to 16 in Adelaide this year, worth about $40 each, so about $600. The number falls by a fifth on 1 January 2027 as the scheme winds down (Clean Energy Regulator).
• SA's Retailer Energy Productivity Scheme. Energy retailers pay it, and set the amount themselves: about $250 to $850. A home with no gas connection earns more than three times the credit of one still connected (the scheme's rules), so ask the installer how the timing of the gas removal affects it.

Against a like-for-like gas replacement, with $283 to take the gas away, a 270 to 315-litre heat pump costs about $450 to $1,900 more and saves about $880 to $1,040 a year. It pays back the difference within about two years. A CO2 unit costs about $3,200 to $5,400 more and takes three to five and a half years. The CO2 units are quieter and carry longer warranties, which counts for something on a wall near a bedroom.

Should I wait for it to die?

Probably not. The gas heater costs about $1,040 a year to run, and a heat pump bought now instead of later gives up roughly $250 a year of its own life ($3,000 over about 12 years). Every year sooner is worth about $750 to $800. The certificate rebate also shrinks in January. A planned swap also avoids the emergency version, where the plumber who turns up on the cold-shower morning has a gas unit on the van and a heat pump on back order.

Running the same numbers for your house

You don't need a gas meter sensor. The bills get most of the way:

1. Add up a year of gas from the bills in MJ. If anything else in the house uses gas, this sets an upper limit on the hot water, not the real figure.
2. Split the bill. The usage at the rate per MJ, and the daily supply charge times 365. The supply charge is what disconnecting saves on top.
3. Turn gas into heat at the taps. About 80% for an instantaneous heater, less for an old gas storage tank.
4. Price the heat pump: heat at the taps plus about 2.5 kWh a day of tank loss, divided by about 3.5, times the price per kWh when it would run.
5. Size the tank on your heaviest day. Without hourly data, take the winter bill's daily average and add half. Divide by about 0.16 MJ a litre.

# Example figures, not mine.

# Gas: 8,000 MJ a year at 7c, supply $1.05 a day
gas = 8000 * 0.07 + 365 * 1.05
# $943 a year

# Heat pump: 80% of the gas as heat, plus tank loss
heat_kwh = 8000 * 0.80 / 3.6 + 2.5 * 365
# 2,690 kWh of heat
hp_kwh = heat_kwh / 3.5
# 769 kWh of electricity
running = hp_kwh * 0.35
# $269 a year charged overnight at 35c

saving = gas - running
# $674 a year

# Tank: winter bill 30 MJ/day, heaviest day about 1.5 times that
tank = 30 * 0.80 * 1.5 / 0.16
# 225 litres

What two months can't tell me

• A winter's worth of hours. The busiest stretches come from spring and are scaled to the winter bill. Winter will show whether that scaling holds.
• Mains water temperature. Adelaide's isn't published that I could find, so the tank sums assume warmer water than is likely.
• Standing losses. One maker publishes them, for a smaller tank; 2.5 kWh a day is a borrowed figure, not this house's.
• A winter noon's real output. The 20% derating is mine, not a spec sheet's.
• The tariff. The power plan's prices changed three times in 2026. Without the free window, overnight power at 35c still saves about $740 a year.

The gas meter keeps counting, and winter is the next test. The answer so far is the same one the cars gave: measure the house first, then let its numbers choose the size.

If you want your own gas and water metered like this, many meters are made to take a sensor without being touched, and a quick look tells me whether yours are. I can set it up as a small job, quoted before I start, at $90 an hour, and the first conversation is free: get in touch.