I have a small, older brick house in Melbourne with:
I’m interested in any opinions of what to do when it comes to replace the gas hot water system:
Has anyone gone through a similar situation?
Cheers
Adam
Inverter Hot Water system for water heating unless you can go Solar (with booster supplied from Solar power feed using a timer to heat during the day when needed) Hot Water system.
Ducted can be be a pain. If you only want to heat/cool one room a ducted system is often overkill eg 8 kWh system to do a Split system 2.5 kWh job. Even two or 3 rooms can be much cheaper to cool/heat using split systems. As you say your house is small I think looking at Splits could be a better answer than Ducted.
We have Ducted 11 kWh system for a larger 4 bedroom house in Qld where our cooling needs are greater than our warming but until this one as it came built that way, we relied on Splits in our previous houses. We have to always manage the air flows so as to best meet our needs. I still think Splits would have been our preference if we could have chosen that.
Dump the gas and go all electric. Using your PV system for your water heating, space heating and cooling, costs can be dramatically reduced, and you also wont have the gas connection fee to pay, which is a cost whether or not you use any gas.
If looking at heat pumps, go for one that uses CO2 as the refrigerant, they are much more efficient at low ambient temperatures.
For room heating and cooling, as @grahroll says, remove the ducted system and go for smaller more efficient split systems. Smaller systems are more efficient internally (higher EER/COP), and more efficient by not having to send the cool/hot air longer distances through ducting.
We replaced a failed Rheem electric HWS with a heat pump at our previous residence.
It was fantastic and reduced electricity consumption for the HWS by 90% and electricity costs by 80%.
When we bought our current home, it already had a Conergy solar HWS installed with the tank on the ground and 2 panels on the roof.
Only ever needs boosting in periods of extended overcast and/or wet weather, and our solar & battery system takes care of that.
As @grahroll and @gordon have both suggested, dump the ducted aircon and install separate split units.
With gas HWS and gas heating, what is your 4kw solar system powering, or were you lucky enought to get the 60 cents FIT deal?
There is some great advice in the above posts. Choice has also looked into options associated with HWS replacement. The information can be found here:
All the prior advice is good, but do your numbers. Sometimes the payback can be far longer than you expect although you may be doing a bit for the environment.
Since the immediate question is about the hot water service are you able to quantify how much you are paying to operate it annually? Since you have many gas appliances a decent estimate would be from your gas bill on its lowest month. Take that amount and estimate the cost of running the various kinds of replacements (it could be $0 for some of them) and then amortise the cost.
I have a gas fired hydronic heating system, gas cooktop, and gas storage hot water, so it is wobbly exactly how much gas the hot water uses compared to the other uses so took my lowest monthly bill and assumed 80% was hot water. Very wobbly! When I investigated solar water a few years back my payback time appeared to be in the range of 7 years best case, but could have been 12 - very wobbly. My present gas storage system just had its 20th anniversary so if a new system equalled that life, over the long term it would be a good investment if you look at it from that aspect. If you look at cash flow as a criteria you could make a different decision.
I avoided the issue of rising gas prices 
Thanks everyone for your thoughts. There is definitely lots of great advice to get me thinking and crunching the numbers.
@PhilT - Gas bills in summer ($85) are pretty low compared to winter ($500). but its only powering a gas hob and the hot water. The hot water system is probably close to 20 years old.
@Fred123 - Yes, that’s the untapped potential of the solar as its only currently powering oven, washing machine, lights, electronics. I want to put it to work and reduce the gas bills.
I’m not really bothered that much about cooling if that would make a difference in my calculations (because we would need splits for 2 bedrooms and one living area) - the brick house regulates temperature really well and we just use a fan when we get a run of hot nights.
So I guess this is really about what I can use the solar for that is currently using gas.
As @PhilT suggests it is always useful to look at the return on the alternatives. Some may actually cost more over time than others or even staying as you are.
We repurposed our old low pressure HW tank to service a hydronic heating system on the cheap. But you still need a source of energy, to keep the system heated, or a very large insulated tank $$$$, to store enough hot water for a day, to time shift solar energy.
If your brick house is well insulated and holds the heat well perhaps using reverse cycle air conditioners in the daytime from solar is one way to reduce the gas heating bill.
The advantage of what you have with the gas heating is it is always available and can be turned on or off as needed. My experiences of Victoria in Gippsland and winter suggest sunshine can be scarce when the day’s are coldest. Your gas seems remarkably cheap. Reticulated natural gas in Brisbane costs around $1 per day just to be serviced. Zero usage.
This article is almost two years old but will give some ideas. I like that the article presents different replacement scenarios for different locations and house sizes.
Consider what’s changed since then, costs of gas vs electricity, and new equipment costs.
A hidden cost swapping gas for electric is sometimes a required upgrade to the breaker box to accommodate it, as well as the wiring from there to the water service. That can be $1,000+ if one has an old box with wire fuses that needs to be brought up to standard.
Conversely, going from electric to gas the gas fitter / plumber could easily add $1,000 - 2,000 to the costs of the service itself if a new gas line had to be run.
@Kanga2’s link looks like very good information although the graphs in it seem underdone with keys to understand them quickly.
Operating costs is only one issue. Other things to consider are the size of the installation, location of the installation and also the needed capacity to meet the home’s operating conditions (not installing a system which is too small or too big).
Plu$
personal comfort best = hydronic heating AND cooling
eco-friendliness best = electric heat pumps coupled to solar
answering the OP, from the article
If you have more than one gas appliance…
If a gas space heater fails
… our modelling suggests it will be cheaper overall in all locations if you replace it with efficient electric reverse-cycle air conditioners.
If a gas hot water system fails
… and it’s not your only gas appliance, our modelling suggests you’re always better off replacing it with another gas one, unless the replacement with a heat pump is your first step towards an all-electric home.
The trend towards all electric, favouring heat pumps is very clear.
Yes, that’s a very useful article, thanks. and thanks to everyone else for their thoughts.
My solar still produced in the range of 4-9Kwh in mid-winter. Its a new system as well and I expect to consider a battery when they become economic.
I am thinking a staged conversion to electric might work over a number of years. The gas hot water is the oldest system and will be the first that needs replacing.
Reverse cycle AC is excellent value for heating even if the cooling isn’t needed so much or at all (mostly AC reverse cycle are better at their heating than their cooling). Splits will save you having to do Duct Work (expensive and it can be a pain to retrofit to an established house), if your ceiling isn’t insulated you will need to do so as ducted even insulated stuff loses heating/cooling to the roof cavity (insulating the ceiling for heating/cooling also pays off regardless if Split or Ducted). It isn’t permanent either as ducting over time does need replacing though years are involved in that between changes. Splits and ducted also help filter your air in the home, just make sure you clean the filters regularly, they do remove a lot of dust etc from what you breathe.
So for ducted you will need returns, ducting, labour to run the ducting, picking the right size for your house can be painful so get a professional to calculate the capacity needed. Getting a professional to do capacity calcs for Splits is also advisable. There are online calculators you can use.
http://www.airandwater.com.au/blog/size-air-conditioner-need/
Though the above are for ducted just put the room size in for Splits. Most normal houses in bedrooms require between 2.5 to 3.5 kW units, lounge dining areas about 5 to 7 kW units.
A normal home needs about 13 to 18 kW ducted systems. If going ducted make sure you get a system with Zone Control as some don’t unless you ask.
I joined a facebook group (Redirecting... )and the group manager is very keen on heat pump if you are swapping gas->electric. I can’t do it, its far too expensive and wont pay for itself inside the time I am still alive, but I can see the benefits. I wanted to switch to an electric stove but may in the end simply have the gas one removed and disposed of, and have a cupboard in its place, and some benchtop appliances instead. And, yesterday, I took delivery of a heat pump clothes dryer to repace my >20 year old vented one with a broken door latch.
We installed a split last year. Considering our house has large windows and an open plan where it was to operate, it was noteworthy most of the sales people told us we needed about 14kw using ‘the formulas’. The largest capacity units are about 9.4 so that was two units. They did not try to sell two at once but were confident one would not do it ← Soft sell!
My installation had special issues so I was not about to buy off-the-shelf and hope the installation would be the normal cost - I wanted a confident all-up quote. 3 companies attended and one quoted from afar. The one who got my business was the only one who actually measured, applied the formula, explained why the standard formulas were not appropriate for my house, and that a single 9.4 should do everything I wanted with a high degree of confidence. An aspect I had not thought about is that 3 of the 4 ‘dumped’ the drain into the gravel while the winner routed it into a storm water downpipe. Small details can matter 
It works a treat and will heat or cool the entire house if we use a single box fan in the hallway to push air toward the far rooms on bad days. On multiple 40+ days we need to over-cool the main area at night to also cool those far rooms but that is less costly than having a second unit for the far rooms and a minor inconvenience for the few days a year it happens in Melbourne.
The moral is that one needs to be wary of the formulas. Being undersold is at worst adding another unit. Being oversold is extra cost of purchase and operation forever and units that are too much over-capacity can work less well than a smaller one.
Going into a shop and buying using a formula can be a disservice or deliver a good deal, depending on how ones house matches ‘the model’ used to size units. If you have a traditional California bungalow the formulas are probably conservative; if yours is a window walled modern open plan house they will probably be optimistic. Insulation matters, the roof matters, and shading matters in addition to the obvious.
Renew has a theme. A positive one, of moving us all to zero carbon. The history of heat pumps in our area is they are an expensive unreliable failure. Better to use a boosted rooftop solar HW and save the pain. Hopefully others have an alternate experience. The previous Queensland ban on old style resistive and gas HW systems in favour of heat pumps and solar HW is long dead too. Solar PV powering an old style resistive HW system works great.
Not necessarily a trend?
I also suspect most of us make the final decision based on what we can afford. That’s regardless of how green or bad it is for the environment. The choices are mostly made when a new house is constructed, or undergoes a major renovation.
The comment by Renew that converting from gas to electric is really a good decision when you couple that to solar is realistically only available to those of us with the extra financial resources needed.
The upfront cost of the change over from gas jumps dramatically when you couple in the cost of a solar system. And for some as @PhilT pointed out previously may add costs with a major electrical project to provide the added cabling and power to the new appliances.
Note:
For some of us not in the burbs supply reliability is an issue. Once battery or other options for storage come down in cost perhaps all electric is the lower carbon option. For now our bottled gas on a rural block is far cheaper than any other option for HW and all cooking. And today when they take the grid away for the whole day to do maintenance still very convenient.
It is also worth considering that for many rural residences where bottled gas is still common, many of the landowners may be in substantial carbon credit through managed vegetation regrowth. The 80kg of gas we use annually is a minor drop when compared to even one hectare of regrowth. Heat pump HW is not the only way to reduce your carbon footprint nor may it be the most cost effective. It is just one option that is relatively accessible for anyone who has the spare cash when the time comes. Solar PV remains our first choice, if you have the right site conditions.
Choice’s hot water reliability survey shows solar hot water less reliable than a heat pump. Neither are great. What is the real reliability difference between a score of 75 and 90? However, my perception is warranty periods are slowly increasing which generally implies increasing reliability (??)
The Renew article uses a 10 year payback period in its calculations. They don’t judge whether you can afford the up front cost or not.
Our modelling compares the total cost of ownership (purchase, installation and running cost) after 10 years, using a 10-year net present value (NPV)
Likewise they can’t consider every possible cost scenario. I’m all electric because 20 years ago I decided not to pay the $3,000 to get gas from the front fence to where the hot water heater needed to be. At the time I thought I was on the wrong side of eco friendly - brown coal vs gas.
This. today I have asked for a quote for a heat pump HWS and I suspect it will be well beyond anything I can afford, and its benefit would accrue to the next owner of this place after I drop off the perch. So I probably wont change from gas, after all. I’d love to get solar, but that too is a bit beyond me at the moment. And an electric stove, what a kerfuffle that is going to provide. I have a gas stove with no electric connection, so the power board has to be upgraded. I think I am going to just get bench-top appliances. Who needs a big stove anyway!!
Oh yeah, and I have decided in any case to get a new front load washing machine to replace my 2 year old top loader, which uses hot water from the HWS instead of self heating. I mostly do cold washes, but when I do hot or warm, I’d rather the machine heated it. Its a shame, the choice I made, 2 years ago… silly decision. Oh well.
