How continuous flow (instantaneous/tankless) hot water systems work, when they make sense, what they cost, and how to choose between gas and electric models for Australian homes.
A continuous flow hot water system (also called instantaneous, tankless, or on-demand) heats water only when you turn on a tap. There is no storage tank — cold water passes through a heat exchanger and is heated to the set temperature in real time. When the tap closes, the system shuts off.
This is fundamentally different from a storage system, which keeps 125–400 litres of water heated 24 hours a day — whether you use it or not. The continuous flow approach eliminates standby heat loss (the energy wasted keeping stored water hot), which typically accounts for 20–30% of a storage system's total energy consumption.
In Australia, continuous flow systems are available in two fuel types: natural gas (the most common) and electric (less common for whole-house use, more common for single-point applications like under-sink units).
When you open a hot water tap, the following sequence occurs in approximately 2–3 seconds:
When the tap closes, the flow sensor detects zero flow and shuts down the burner/element. There is no pilot light on modern units — they use electronic ignition.
The table below compares the two fuel types for continuous flow systems available in Australia:
| Factor | Gas Continuous Flow | Electric Continuous Flow |
|---|---|---|
| Flow rate (whole house) | 20–32 L/min | 8–12 L/min (limited by electrical capacity) |
| Suitable for | Whole house, multiple simultaneous outlets | Single point or small household (1–2 people) |
| Running cost (per kWh equivalent) | $0.04–0.06/kWh (natural gas) | $0.25–0.35/kWh (electricity) |
| Annual running cost (4-person household) | $350–550/year | $800–1,200/year |
| Installation cost | $1,800–3,200 (supply + install) | $1,200–2,500 (supply + install) |
| Requires gas connection | Yes (natural gas or LPG) | No |
| Electrical requirements | Standard 10A GPO | Dedicated 3-phase or high-amperage circuit |
| Outdoor installation | Yes (most models are outdoor-rated) | Indoor or outdoor |
| Lifespan | 15–20 years | 10–15 years |
| Greenhouse emissions | Moderate (gas combustion) | Depends on grid mix (zero if solar-powered) |
Key takeaway: Gas continuous flow is the dominant choice for Australian households because it delivers higher flow rates at lower running cost. Electric continuous flow is typically limited to single-point applications (under-sink, bathroom pods) or small apartments where gas is not available.
Source: Energy rating data from the Australian Government's Energy Rating Calculator (energyrating.gov.au). Running costs based on 2026 NSW energy prices: natural gas $0.045/MJ, electricity $0.32/kWh.
Continuous flow is the better choice when:
Storage is the better choice when:
The most important specification for a continuous flow system is its flow rate — measured in litres per minute (L/min) at a specific temperature rise. A system rated at "26L/min" means it can deliver 26 litres per minute with a 25°C temperature rise (e.g., heating 15°C inlet water to 40°C outlet).
In practice, the actual flow rate depends on your inlet water temperature. In Sydney and the Central Coast, winter inlet temperatures drop to 12–15°C. To deliver 50°C water from 12°C inlet, the system needs a 38°C rise — which reduces the effective flow rate by approximately 35% compared to the headline figure.
Here is a sizing guide based on simultaneous usage:
| Household Size | Typical Simultaneous Use | Minimum Flow Rate Needed | Recommended Model Size |
|---|---|---|---|
| 1–2 people | 1 shower OR 1 tap | 12–16 L/min | 20L unit |
| 2–3 people | 1 shower + 1 tap | 16–20 L/min | 24–26L unit |
| 4–5 people | 2 showers OR 1 shower + dishwasher + tap | 20–26 L/min | 26–32L unit |
| 5+ people / large home | 2 showers + 1 tap simultaneously | 26–32 L/min | 32L unit or dual units |
Important: Always size based on winter inlet temperature, not the headline flow rate. A "26L" unit in winter may only deliver 17–19L/min of usable hot water.
Installing a continuous flow hot water system requires:
A licensed plumber and licensed gasfitter (both are required — though most plumbers hold both licences) must install the system and issue a Certificate of Compliance.
The Australian continuous flow market is dominated by three brands:
All three brands manufacture units specifically for Australian conditions (hard water, high inlet temperatures, outdoor installation). We install and service all three brands and can recommend the best option based on your household size, gas supply capacity, and budget.
The table below shows typical installed costs for continuous flow hot water systems in NSW (2026 pricing):
| System | Supply + Install Cost | Annual Running Cost | Lifespan |
|---|---|---|---|
| Gas 20L (1–2 bedroom) | $1,800 – $2,400 | $280 – $400 | 15–20 years |
| Gas 26L (3–4 bedroom) | $2,200 – $3,000 | $350 – $550 | 15–20 years |
| Gas 32L (5+ bedroom / dual bathroom) | $2,800 – $3,500 | $400 – $600 | 15–20 years |
| Electric instantaneous (single point) | $800 – $1,500 | $150 – $300 (single outlet) | 10–15 years |
Source: O'Brien Plumbing installed pricing 2026. Includes supply, installation, gas compliance certificate, old unit removal, and commissioning. Prices are GST-inclusive estimates.
No — that is their primary advantage. Because they heat water on demand, they deliver unlimited hot water as long as the tap is running. However, if multiple taps are running simultaneously, the temperature may drop if the unit's flow rate capacity is exceeded.
Gas continuous flow typically costs $350–550/year for a 4-person household — comparable to gas storage ($300–500) and significantly cheaper than electric storage on peak tariff ($900–1,400). However, electric storage on off-peak/controlled load tariff ($250–400) can be cheaper than gas continuous flow.
Yes, but you will need a gas connection installed (if choosing gas continuous flow) or significant electrical upgrades (if choosing electric continuous flow for whole-house use). A gas continuous flow replacement for an electric storage tank typically costs $2,500–4,000 including the new gas pipe run.
Gas continuous flow systems typically last 15–20 years with regular servicing (annual for commercial, every 2–3 years for residential). The heat exchanger is the most expensive component and is warranted for 10–12 years by most manufacturers.
Yes. We recommend servicing every 2–3 years for residential units. Servicing includes descaling the heat exchanger (particularly important in hard water areas), checking the burner, testing safety devices, and inspecting the flue. Annual servicing is recommended for commercial installations.
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