Designing homes to conserve energy and use it efficiently, from sources that cause least environmental harm.

Energy sources

Water can be heated using solar energy, electricity, gas, a wetback system, or a heat pump water heater. Each has advantages and disadvantages, though in general solar and heat pump are the most efficient and produce the least greenhouse gas emissions.

On this page:

  • Solar (including photovoltaic)
  • Heat pump
  • Electricity
  • Gas
  • Wetbacks and solid fuel heaters

Energy sources for water heating need to be considered alongside other factors such as system design and capacity, and the choice between storage and continuous flow systems.

Many New Zealand homes have stored hot water using electricity or gas for heating. The remaining 5% use a continuous flow system, generally gas heated, although electric continuous flow systems are also available.

More energy-efficient hot water heating options include solar, heat pump, and wetback systems.

To determine a suitable water heating system, you need to consider size, likely water use, initial and on-going costs – some options can be three or four times more expensive to run than others – and the energy efficiency and environmental impact of the energy used.

In its advice to Government released in June 2021, the Climate Change Commission recommended that New Zealand phase down use of fossil gas (natural gas) in existing residential, commercial and public buildings and avoid the addition of new fossil gas demand (i.e. by not installing new connections to buildings).

Solar (including photovoltaic)

Traditional solar water heating systems can provide a highly efficient way to meet part of a household’s water heating needs. Typically, a well designed and installed solar water heating system can provide about 75% of a household’s water heating needs in summer and about 25–45% in winter.

A solar water heating system cannot provide all of a household’s water heating needs – a booster system will be needed. This may be heat pump, electric or gas depending on how the system is configured.

To achieve maximum efficiency, solar systems must be properly designed and installed.

See solar water heating for more.

Another type of solar water heating system now available is a dedicated photovoltaic generation system, where the power from three or more solar panels on a roof goes through a controller to a heating element in the hot water cylinder. As with traditional solar water heating systems, a booster system will be needed for when there is not enough sun.

Heat pump

Heat pump water heaters use heat energy from outdoor air (or in some cases the ground) to heat water in a storage cylinder. Heat pumps use electricity to move heat, but not to create it, and so are a highly energy efficient method of water heating. The cost of heating water with a heat pump is similar to or slightly above using natural gas, cheaper on average than controlled rate electricity, and significantly cheaper than using LPG for storage systems.

Heat pumps can also be used as a booster option for solar water heating.

See heat pump water heating for more.


Electricity can be used to heat either storage or continuous flow water heaters, and can also be used as a booster to solar or heat pump water heating systems.

The advantage of electricity is its reliable supply. However, in terms of sustainability and energy efficiency, conventional electric hot water heating is not a preferred option except as a booster system.

Conventional electric systems are less energy efficient than solar and heat pump systems, and generating electricity from fossil fuels produces greenhouse gas emissions. As well as these environmental costs, rising electricity prices also provide an incentive to seek more efficient energy sources.


Gas can be used to heat either storage or continuous flow water heaters, and can also be used as a booster to solar or heat pump water heating systems.


  • gas systems have higher heat losses, with heat being lost in the products of combustion exhaust (although condensing gas burners reduce this lost heat)
  • natural gas may not be available through a reticulated system, which means LPG gas bottles will have to be used. However, the cost of using LPG to heat water in storage systems is much higher than the cost of using natural gas.
  • if gas is available through a reticulated system, the gas line may have connection and line supply charges.
  • there are questions around the long-term security of supply.

Wetbacks on solid fuel heaters

Wetbacks generally provide a boost to the water heating system, particularly in the winter when most required. They are most suitable for cold climates where a lot of space heating is used. On average, wetback water heating comes at a lower cost than controlled rate electricity.

See wetbacks for more.


Updated: 23 May 2024