Gas Storage vs Continuous Flow Hot Water: What’s the Difference?

Your existing gas hot water system needs replacing, but should you install another storage tank or change to a continuous-flow system?

Both systems use gas to heat water, but they operate in very different ways.

A gas storage system heats water and keeps it ready inside a tank. A continuous-flow system has no storage tank and heats water as it passes through the unit.

That difference affects how much hot water is available, how much space the system occupies, how efficiently it uses gas and what may be required to install it.

Neither option is automatically best for every home. The correct choice depends on your household’s hot water demand, the existing gas supply, available installation space and whether remaining connected to gas still makes sense for the property.

How Does a Gas Storage Hot Water System Work?

A gas storage hot water system holds heated water inside an insulated tank.

A gas burner beneath the tank heats the water. When the stored water falls below the thermostat setting, the burner operates again to bring it back to temperature.

As hot water is drawn from the top of the tank, cold water enters at the bottom and must be reheated.

The system therefore has a fixed amount of stored hot water available at any one time.

Gas storage systems are available in different capacities. The correct size depends on the number of people in the home, the amount of hot water used during peak periods and how quickly the burner can recover after water has been drawn from the tank.

How Does Continuous-Flow Gas Hot Water Work?

A continuous-flow system, sometimes called an instantaneous gas hot water system, does not store heated water.

When a hot tap is opened, water passes through the unit. A gas burner heats the water through a heat exchanger before it travels to the outlet.

The burner stops when the flow of water stops.

Because there is no tank, the system does not use gas maintaining a stored volume of water at temperature throughout the day.

A correctly selected continuous-flow system can keep heating water for as long as the water and gas supplies remain available. However, this does not mean it can supply an unlimited number of showers and taps simultaneously.

Every unit has a maximum flow capacity. If household demand exceeds that capacity, the system may not maintain the desired flow and temperature across every outlet.

Gas Storage and Continuous Flow Compared

Can a Gas Storage System Run Out of Hot Water?

Yes. A gas storage system contains a limited amount of heated water.

If the household uses hot water faster than the system can replace and reheat it, the available temperature will eventually fall.

This is more likely when:

• Several people shower within a short period
• Multiple bathrooms are used at once
• Someone fills a bath
• The tank is undersized
• The burner is not recovering properly
• The thermostat or another component is faulty
• The household has grown since the system was installed

Gas systems generally recover faster than many conventional electric storage systems, but recovery speed varies between models.

A larger tank is not always the complete answer. The system’s burner capacity, recovery rate and actual household usage should also be considered.

Does Continuous Flow Mean You Never Run Out?

A continuous-flow system does not run out of stored hot water because it does not have a tank.

However, the unit can still be overwhelmed when too many outlets are operating at once.

Continuous-flow systems are commonly described by the number of litres they can heat per minute under specified conditions. A larger household or property with multiple bathrooms may need a higher-capacity unit.

For example, a system may operate comfortably with one shower but struggle to maintain the same performance when two showers, a kitchen tap and another hot outlet are used simultaneously.

The correct system must be sized for peak demand, not merely the total number of people living in the home.

Is Continuous Flow the Same as Instant Hot Water?

Not quite.

The system begins heating water when it detects sufficient flow, but hot water must still travel through the pipework between the unit and the tap.

If the system is positioned a long distance from the bathroom or kitchen, the cooled water sitting inside the pipe must leave before heated water reaches the outlet.

This means a continuous-flow system can provide ongoing hot water without delivering it instantly at every tap.

The waiting time can be affected by:

• The distance between the system and the outlet
• The diameter of the pipework
• The property’s plumbing layout
• The flow rate at the tap
• Whether the pipes are insulated

Changing from storage to continuous flow will not necessarily fix a long wait caused by the location of the system or the layout of the pipework.

Which System Is More Efficient?

Continuous-flow systems generally avoid much of the standby heat loss associated with storing heated water.

A gas storage tank must maintain its water temperature even when nobody is using hot water. Some heat escapes through the tank and around the area where the burner heats it.

A continuous-flow system operates when hot water is required and stops when demand ends. Australian Government guidance identifies continuous flow as the most common form of gas water heating and notes the higher heat loss associated with gas storage systems.

Actual household running costs still depend on:

• The efficiency of the particular model
• The gas tariff or LPG price
• How much hot water the household uses
• The temperature setting
• The length of hot water pipe runs
• Maintenance and system condition
• Whether unnecessary hot water usage increases because the supply feels unlimited

Changing to continuous flow can reduce storage losses, but it does not make hot water free or remove the need to choose an appropriately sized system.

Which System Provides Better Water Pressure?

Water pressure and flow are related, but they are not the same thing.

A storage system can release heated water from the tank at a high flow rate, subject to the property’s supply pressure, valves and pipework.

A continuous-flow unit must heat water while it is moving through the heat exchanger. Its rated flow capacity can therefore become the limiting factor when several outlets are used together.

A properly sized continuous-flow system can provide good performance, but selecting an undersized unit can lead to disappointing results in a large home.

Before recommending either system, the plumber should consider:

• The number of bathrooms
• Whether showers are commonly used simultaneously
• Expected flow rates from the showerheads
• The incoming water temperature
• The property’s water pressure
• The condition and size of the existing pipework

Does Continuous Flow Require a Larger Gas Pipe?

It may.

A continuous-flow system can require a high rate of gas while operating because it must rapidly heat water as it passes through the unit.

The existing gas pipe may have been sized for a storage system with a smaller burner. It may not be adequate for a higher-capacity continuous-flow unit, particularly when the same gas supply also serves a cooktop, heater or other appliances.

The gas fitter may need to assess:

• The length and diameter of the existing gas pipe
• The available gas pressure
• The demand created by the proposed unit
• Other gas appliances connected to the service
• Whether the property uses natural gas or LPG

A quote to change from storage to continuous flow should account for any required gas pipework upgrades. Comparing only the price of the appliances will not provide an accurate comparison.

Does a Continuous-Flow System Need Electricity?

Most modern continuous-flow gas systems use electricity for electronic ignition, temperature control and system operation.

This means the unit may not provide hot water during a power outage, even though the appliance heats water with gas.

Some older or simpler gas storage systems use a standing pilot flame and may continue operating without mains electricity. This depends on the individual model and installation.

Homeowners should not assume that every gas hot water system will operate during a blackout.

Which System Takes Up Less Space?

Continuous-flow systems are considerably more compact because they do not require a storage tank.

They are generally mounted to an external wall, making them useful where outdoor space is limited or where removing a tank could free part of the property for another purpose.

However, the available wall is not automatically suitable.

The proposed position must account for:

• Clearances from doors, windows and openings
• Combustion and ventilation requirements
• Access for servicing
• Protection from damage
• Proximity to bathrooms and kitchens
• Manufacturer installation requirements

A gas storage system requires more ground space and a suitable base, but replacing an existing tank in the same location may involve fewer changes to the property.

What Maintenance Do Gas Hot Water Systems Require?

Both system types should be inspected and maintained in accordance with the manufacturer’s instructions.

Gas storage systems may require attention to:

• The sacrificial anode
• Temperature and pressure relief valves
• The burner and pilot assembly
• Corrosion or leakage from the tank
• Drainage around the system

Continuous-flow systems may require attention to:

• The burner and ignition components
• The heat exchanger
• Water and gas filters
• Scale accumulation
• Temperature controllers
• Error codes or inconsistent ignition

Qualified gas work is required when installing, removing, altering, repairing or servicing gas systems in Queensland.

What Is Happening to Gas Hot Water Systems in Victoria?

Victoria is introducing regulations designed to move more homes from gas to electric appliances.

Since 1 January 2024, new connections to reticulated natural gas have been prohibited for many new Victorian dwellings, apartment developments and residential subdivisions requiring planning permits. The restriction does not apply in the same way to bottled or reticulated LPG.

From 1 March 2027, Victorian owner-occupiers will generally be required to replace a gas hot water appliance with an electric alternative when the gas appliance breaks and cannot be repaired. Different requirements also apply to rental properties.

This does not mean every functioning gas appliance in Victoria must be removed immediately. It is a staged transition affecting new connections and certain appliance replacements.

Do Victoria’s Gas Rules Apply in Queensland?

No. Victoria’s building and appliance rules do not apply to homes in Queensland.

As at August 2026, Queensland continues to approve domestic natural gas and LPG appliances and regulate their installation and servicing through gas-device certification and gas-work licensing requirements. There is no equivalent Queensland requirement forcing an unrepairable residential gas hot water system to be replaced with an electric system.

Gas storage and continuous-flow systems therefore remain available options for Queensland homeowners when the appliance and installation are suitable.

However, the Victorian changes demonstrate that residential energy policy is not static. A homeowner replacing a system today may still want to consider how long they expect to remain in the property and whether they intend to retain other gas appliances.

Does It Still Make Sense to Install Gas Hot Water in Queensland?

It can.

Remaining with gas may be practical when:

• The property already has an adequate natural gas or LPG supply
• Other gas appliances will remain in use
• The existing gas system has performed well
• A like-for-like replacement can restore hot water quickly
• Changing to electricity would require significant additional work
• The household values the recovery or flow characteristics of gas

Comparing non-gas options may be worthwhile when:

• Hot water is the final gas appliance at the property
• The homeowner wants to remove ongoing gas supply charges
• The home has unused rooftop solar generation
• The gas pipe requires a substantial upgrade
• The property is already moving towards all-electric appliances
• A renovation includes electrical or switchboard upgrades

Victoria’s policy direction is worth understanding, but it should not be used to frighten Queensland homeowners into choosing a system that does not suit their property.

Is Gas Storage or Continuous Flow Better for Your Home?

A gas storage system may be appropriate when:

• The existing storage system has performed reliably
• The replacement needs to be completed quickly
• The existing infrastructure remains suitable
• The household has short periods of high demand
• The property has sufficient space for a tank

A continuous-flow system may be appropriate when:

• The household wants ongoing hot water rather than a fixed tank volume
• There is limited space for a storage tank
• The unit can be sized for peak simultaneous demand
• The gas supply can support the appliance
• The proposed wall location meets installation requirements
• Reducing standby heat loss is a priority

The correct answer may also be neither.

If the home has rooftop solar, is removing its remaining gas appliances or requires substantial gas upgrades, it may be worth comparing electric storage, heat pump or solar hot water before committing to another gas system.

Compare the Complete Installation, Not Just the Unit

Gas storage and continuous-flow systems offer different advantages.

Storage provides a ready volume of heated water but can run out and experiences standby heat loss. Continuous flow heats water as required, but the unit must be sized correctly and the property’s gas supply must be capable of supporting it.

Before making a decision, compare:

• Household peak hot water demand
• Existing gas pipe capacity
• Available installation space
• Whether electrical power is required
• The condition of the existing plumbing
• Installation and upgrade costs
• Expected usage and ongoing energy costs
• Whether the household intends to remain connected to gas

RJT Plumbing & Gas can inspect your existing system, assess the available gas supply and explain whether storage, continuous flow or another hot water option is more appropriate for your property.

Use the RJT hot water recommendation system to begin comparing your options, or contact RJT Plumbing & Gas for gas hot water repairs and replacements across North Lakes, Mango Hill, Griffin, Kallangur, Murrumba Downs and surrounding Moreton Bay suburbs.

Frequently Asked Questions

What is the difference between gas storage and continuous-flow hot water?

Gas storage systems heat water and hold it inside a tank. Continuous-flow systems do not use a tank and instead heat water as it passes through the unit when a hot tap is opened.

Can a continuous-flow gas system run out of hot water?

It does not run out of stored water, but it has a maximum flow capacity. If too many hot outlets operate simultaneously, an undersized unit may not maintain the desired temperature and flow across every outlet.

Is continuous-flow hot water instant?

The unit begins heating once it detects water flow, but heated water must still travel through the pipework to the tap. The distance between the system and the outlet affects how long the homeowner waits.

Is continuous flow more efficient than gas storage?

Continuous-flow systems generally have lower standby heat loss because they do not keep a tank of water hot. Actual running costs still depend on the model, gas price, household usage, temperature settings and installation.

Can I replace gas storage with continuous flow?

Often, but the existing gas supply, gas pipe size, water pressure, electrical supply and proposed installation location must be checked before the change is confirmed.

Does continuous-flow gas hot water work during a power outage?

Most modern continuous-flow systems require electricity for ignition and controls, so they may not operate during a blackout. The requirements depend on the particular appliance.

Are gas hot water systems being banned in Queensland?

There is currently no Queensland rule equivalent to Victoria’s requirement for certain failed gas hot water appliances to be replaced with electric alternatives. Approved gas appliances remain available for installation by appropriately licensed gas fitters in Queensland.

Should I choose gas storage or continuous flow?

The answer depends on peak household demand, available space, the capacity of the gas supply, installation cost and whether the property intends to remain connected to gas. An on-site assessment can identify which option is practical.