What this calculator works out
The calculator compares two paths for a Victorian home with gas hot water over the next 10 years. Path one: switch to a heat pump now and pay the out-of-pocket cost up front. Path two: keep the gas system until it fails, paying gas running costs in the meantime, then replace it. It adds up the cumulative cost of each path year by year and shows the 10-year difference, the payback year and the year the switch-now path breaks even.
From 1 March 2027, Victorian law requires a mains gas hot water unit that fails in an existing home to be replaced with an electric one. Limited exemptions apply, for example where there is no room for an electric unit. The calculator is useful either way: it compares running costs and timing, not just the rule.
The three inputs
- Household size (1-2, 3-4 or 5+ people). Hot water use, and so running costs and savings, scale with the number of people: 0.7 times the 3-4 person figure for 1-2 people and 1.3 times for 5 or more.
- Age of your gas hot water system (under 5, 5-10 or over 10 years). This sets when the calculator assumes your current unit fails.
- Out-of-pocket cost after rebates ($1,500 to $2,500, default $2,000). Replace it with the figure from your own quote for the most useful answer.
The assumptions
- When your gas unit fails. Gas storage hot water typically lasts 8 to 12 years. A system under 5 years old is assumed to have about 7 years remaining, a 5-10 year old system about 3, and one over 10 years old about 1.
- Savings from switching.About $330 a year for a 3-4 person household, the hot water figure in the Victorian Premier's 24 June 2025 announcement, with heat pump running costs of about $225 a year (the midpoint of $150 to $300).
- Gas prices.Gas running costs rise 5% a year, a conservative assumption set below the supply decline in AEMO's 2025 Victorian Gas Planning Report.
- Replacing in a hurry. If the modelled failure falls after 1 March 2027, the calculator adds $500 for a rushed replacement. This is a flagged estimate, not a figure from a primary source.
These are estimates for planning, not a quote. For the rules themselves, see Victoria's gas ban for 2027; for prices, see heat pump hot water cost; for rebates, see the Victorian heat pump rebates.