Switching From LPG Gas Hot Water To A Heat Pump: Is It Worth It?

Switching From LPG Gas Hot Water To A Heat Pump: Is It Worth It?

If your home uses bottled LPG for hot water, replacing your old gas hot water system with another gas unit may not always be the cheapest long-term option.

For many homes around North Lakes, Narangba, Mango Hill, Griffin, Kallangur and the wider Moreton Bay area, a heat pump hot water system may be worth considering, especially if LPG refill costs, bottle rental and delivery are becoming more expensive or inconvenient.

The key question is not simply:

Is electricity cheaper than gas?

The better question is:

Can I reduce or remove my reliance on bottled LPG by switching my hot water system to a high-efficiency electric heat pump?

For some households, the answer may be yes.

The Simple Answer

Switching from bottled LPG hot water to heat pump hot water can make economic sense when:

• Hot water is the main reason the home uses LPG
• The existing gas hot water system is old, unreliable or due for replacement
• The household uses a moderate to high amount of hot water
• There is a suitable outdoor location for the heat pump
• The home has solar power or access to suitable electricity tariffs
• The homeowner plans to stay in the property long enough to benefit from lower running costs

The strongest case is when the household can remove LPG completely. If LPG is only used for hot water, switching to a heat pump may allow the homeowner to stop paying for LPG bottle refills, rental and delivery altogether.

Why Bottled LPG Can Become Expensive For Hot Water

Bottled LPG can work well, but it comes with ongoing costs that many homeowners forget to include when comparing systems.

There is the bottle refill cost, but there may also be bottle rental, account costs, delivery logistics and the inconvenience of running low or running out.

Published LPG supplier guidance in 2025 showed typical standard 45kg gas bottle refill pricing starting around $140 per bottle, with rental starting around $45, although prices vary by supplier, suburb, delivery model and promotions. The same guide notes that transport, seasonality, exchange rates and international LPG pricing can all affect local LPG costs.

That matters because a bottled LPG hot water system ties part of your household running cost to bottle supply.

If your home goes through several 45kg bottles per year mainly for hot water, those costs can add up.

Why Heat Pump Hot Water Is Different

A heat pump hot water system does not heat water the same way as a standard electric storage unit.

A normal electric storage system uses an element to directly heat the water. A heat pump draws heat from the surrounding air and transfers that heat into the water. It is similar to how a fridge or air conditioner moves heat, but working in reverse.

Energy.gov.au states that heat pump water heaters use about 30% of the energy of a conventional electric hot water system. It also notes that heat pumps are more expensive to purchase and install, but are cheap to run.

YourHome also describes heat pump systems as generally among the cheapest hot water systems to run, using around one third of the energy used by electric storage systems.

This is why the conversation is not simply “gas versus electricity.”

The real comparison is:

Bottled LPG being burned for hot water versus a high-efficiency electric system that can store hot water and potentially run during solar or cheaper tariff periods.

That is where the economics can start to favour the heat pump.

What About Gas Continuous Flow Systems?

Not all gas hot water systems are the same.

A gas continuous flow system only heats water when hot water is being used. That can make it a practical and efficient option for some homes, especially where gas is already connected and the system is working well.

Gas storage systems are different. Energy.gov.au notes that gas storage systems can have high heat loss because the tank cannot be fully insulated where the gas flame heats the water.

So, if you already have a modern LPG continuous flow unit that is working well, the case for switching may be less urgent.

But if your LPG gas hot water system is old, unreliable, expensive to run or due for replacement, that is the right time to compare options properly.

The Best Case For Switching: Hot Water Is Your Only Gas Appliance

This is the cleanest financial case.

If your home only uses LPG for hot water, switching to a heat pump may allow you to remove bottled gas from the property altogether.

That may mean:

• No more LPG bottle refills
• No more bottle rental
• No waiting for deliveries
• No checking bottle levels
• No risk of running out of gas before a shower
• Less exposure to LPG price changes

This is where homeowners need to think beyond the purchase price of the new unit.

A like-for-like LPG replacement may be cheaper upfront, but it keeps the household attached to ongoing LPG supply costs.

A heat pump may cost more to install, but if it removes or significantly reduces LPG use, the long-term economics may be better.

The Weaker Case: You Still Need LPG For Cooking Or Heating

The savings may be weaker if the home still uses LPG for other appliances.

For example, if you still need LPG for a gas cooktop, gas fireplace or other gas appliance, switching hot water to a heat pump may reduce bottle usage, but it may not remove the LPG account, rental or delivery arrangement completely.

That does not mean the switch is a bad idea. It just means the payback may take longer.

The question becomes:

Will the reduction in LPG use justify the extra upfront cost of the heat pump?

That depends on household size, hot water usage, bottle costs, electricity tariffs, solar power and the installation cost.

The Solar Power Advantage

Heat pump hot water can be especially attractive for homes with rooftop solar.

Hot water is a flexible load. Unlike cooking dinner or turning on lights, your hot water system does not always need to run at the exact moment you use the hot water. It can heat the tank during the day and store hot water for later.

That means a heat pump can often be set up to run during the day when solar production is strongest.

For homes that are exporting excess solar for a relatively low feed-in tariff, using some of that energy to heat water may be more valuable than sending it back to the grid.

This does not happen automatically. The system needs to be selected, installed and configured properly. Timer settings, household usage and tariff structure all matter.

But for many Queensland homes with solar, this is one of the strongest reasons to consider heat pump hot water.

Are Rebates Available For Heat Pump Hot Water?

Heat pump hot water systems may be eligible for Small-scale Technology Certificates, commonly called STCs.

The Clean Energy Regulator says air source heat pumps are one of the water heater types eligible for STCs under the Small-scale Renewable Energy Scheme.

The Clean Energy Regulator also explains that many people assign the right to create STCs to a registered agent in exchange for an upfront discount on the system purchase price.

This is important because homeowners often think of rebates as cash back after the job. In many cases, the incentive is applied as an upfront discount through the supplier or installer.

Eligibility, certificate value and available incentives can change, so this should be checked at the time of quoting.

What About The Rheem Ambiheat?

One heat pump option homeowners may come across is the Rheem Ambiheat.

The Rheem Ambiheat HDc-270 is a 270L heat pump hot water system using R513a refrigerant. Rheem lists the model as the Ambiheat HDc-270, model number 571D270.

A 270L unit may suit many medium-to-large households, but the right system depends on the home.

Before recommending any specific unit, a plumber should consider:

• How many people live in the home
• How much hot water the household uses
• Whether the current gas system is storage or continuous flow
• Whether LPG is used for other appliances
• Available outdoor space
• Airflow around the unit
• Drainage
• Noise location
• Electrical requirements
• Warranty and servicing access

The best hot water system is not always the most expensive one. It is the one that suits the household, the property and the long-term cost picture.

What Needs To Happen When Switching From LPG To Heat Pump?

Switching from LPG hot water to heat pump hot water is not just a simple product swap.

There are a few practical steps involved.

1. Check What LPG Is Used For

The first step is to work out whether LPG is used only for hot water or whether it also supplies cooking, heating or other appliances.

This changes the economics.

If LPG is only used for hot water, the switch may allow the homeowner to remove bottled gas completely.

If LPG is still needed elsewhere, the switch may reduce bottle usage but not remove gas costs entirely.

2. Compare Like-For-Like Replacement Against Heat Pump Replacement

The comparison should not be:

Old broken gas system versus new heat pump.

It should be:

New LPG replacement versus new heat pump replacement.

That gives the homeowner a fairer picture of the upfront cost difference and the possible long-term savings.

3. Check The Installation Location

A heat pump needs a suitable location.

It needs airflow, drainage, access for servicing and enough space around the unit. The compressor can also make noise similar to an air conditioning unit, so placement near bedrooms, fences or neighbours should be considered. Energy.gov.au notes compressor noise as a practical consideration for heat pump systems.

4. Check Electrical Requirements

A heat pump uses electricity, so the electrical side needs to be checked.

Depending on the home and the unit, an electrician may be needed for the circuit, isolator, timer or other electrical requirements.

A plumber can assess the hot water system and plumbing requirements, but the electrical work must be handled by the correct licensed trade.

5. Decommission Or Make Safe The LPG Side

If LPG is no longer needed, the gas side needs to be made safe by a licensed gas fitter.

This may include capping the gas line, checking compliance and helping the homeowner understand what needs to happen with the LPG supplier.

Gas bottles and rental arrangements are usually handled through the LPG supplier, so the homeowner may need to contact them once the system is changed.

6. Set The Heat Pump Up Properly

A heat pump should be set up to suit the household.

For homes with solar, that may mean running the unit during the day where practical. For other homes, tariff timing may matter.

The wrong setup can reduce the benefit of the upgrade.

This is why installation quality and system configuration matter just as much as the brand of unit.

When Switching To A Heat Pump May Make Sense

Switching from LPG hot water to heat pump hot water may be worth considering if:

• Your LPG hot water system is old or failing
• You are using several gas bottles per year
• LPG is mainly used for hot water
• You want to reduce ongoing running costs
• You have rooftop solar
• You want to avoid bottle deliveries
• You are planning to stay in the home long term
• You have a suitable outdoor installation location

When Staying With LPG May Still Make Sense

A like-for-like LPG replacement may still be the better option if:

• Your existing gas system has worked well
• You need the fastest replacement possible
• You still use LPG for other appliances
• Your hot water usage is low
• The heat pump location is not suitable
• The electrical upgrade cost is too high
• You want the lowest upfront replacement cost

This is why a proper inspection matters. There is no single answer that suits every home.

The Bottom Line

Switching from bottled LPG hot water to a heat pump can be a smart economic move, especially when hot water is the main reason the home uses LPG.

The real benefit is not just lower energy use. It is the possibility of reducing or removing bottle refills, bottle rental, delivery dependence and exposure to LPG price changes.

For homes with solar, the case can be even stronger because a heat pump may be timed to run during the day and use more of the home’s own solar energy.

But it needs to be assessed properly.

Before replacing an LPG gas hot water system, homeowners should compare:

• The cost of another LPG system
• The cost of a heat pump system
• Current LPG bottle usage
• Bottle rental and delivery costs
• Solar power availability
• Electrical requirements
• Installation location
• Expected time in the home

RJT Plumbing & Gas can inspect your current hot water setup and help you compare practical replacement options.

Need hot water system replacement in North Lakes, Narangba, Mango Hill, Griffin, Kallangur or nearby Moreton Bay suburbs? Contact RJT Plumbing & Gas for advice before replacing your LPG gas hot water system.