How to Choose The Right Size Tankless Water Heater in Australia?

Continuous flow (tankless) water heaters are now the standard choice for modern Australian homes. They offer the luxury of endless hot water by heating it instantly via a heat exchanger only when a tap is turned on.

That basically removes standby heat loss, which accounts for roughly 15–30% of energy use in older storage systems, depending on age and insulation.

Over a year, that can translate into hundreds of dollars for an average household.

However, in the Australian market, the effectiveness of these units is entirely dependent on correct sizing. When the unit is undersized, the result is immediate.

Water temperature drops, flow slows, and morning routines clash.

On the other hand, over-sizing causes a different problem. Higher upfront cost, bigger gas demand and sometimes a full gas line upgrade that wasn’t needed in the first place.

With more than 40% of new Australian homes now built with two or more bathrooms, correct sizing is a must.

This guide breaks the sizing process step by step. We’ll also compare the electric and gas tankless sizing, the common sizing mistakes people make and more. 

Tankless Sizing Basics for Australian Homes

Selecting a tankless system in Australia requires shifting your mindset from volume (how much water is stored) to flow (how much water can be heated at once). If you miss either of them, the performance drops. 

Flow Rate (L/min) and Fixture Demand

Tankless units are sized by their flow rate, which is measured in litres per minute (L/min).

This denotes the highest rate at which a tankless water heater can release hot water simultaneously without failing to meet temperature requirements.

To determine your needs for a tankless water unit, calculate your needs for each fixture based on what needs to be turned on at once.

The Water Efficiency Labelling and Standards (WELS) scheme is very important as well. This is because Australian homes are mostly equipped with new fixtures that have a restricted flow rate for the purpose of conserving water.

This impacts your sizing needs for the heater directly.

Typical Australian Fixture Flow Rates:

• WELS 3-4-Star Shower: 6.0 – 9.0 L/min (Standard in most modern homes)
• Standard (Non-rated) Shower: 9 – 12 L/min
• Kitchen/Laundry Tap: 4 – 6 L/min
• Washing machine (hot fill phase): commonly 4–8 L/min, depending on model 

WELS ratings mean a lot, particularly for new homes.

A 4-star shower can save as much as 40% water compared with water usage from older fixtures. However, WELS helps solve the peak demand problem but doesn’t solve it entirely.

Two efficient showers, for instance, will consume 14-18 litres every minute, which is before the installation of a tap or an appliance is done.

Temperature Rise and Incoming Water Temperature in Australia

Temperature rise is the difference between the cold water entering your home and the hot water exiting the heater. The Plumbing Code in Australia often specifies that the hot water must be no more than 50°C when supplied to bathrooms to avoid scalding.

However, the hot water heater itself can be usually set to 60°C to prevent the growth of Legionella bacteria. 

Furthermore, your geographic location heavily influences the workload of your heater: 

🟩 Southern & Alpine Regions (TAS, VIC, ACT, NSW Highlands): In winter, incoming water can drop to 5°C. To reach a 50°C output, the unit must achieve a 45°C temperature rise.

🟩 Northern Regions (QLD, NT, Northern WA): Winter inlet temperatures may stay around 20°C, requiring only a 30°C rise. 

Winter sizing matters here. You should always size your unit based on the coldest winter day.

A heater that provides 26 L/min in a Brisbane summer might only provide 18 L/min in a Hobart winter simply because it takes longer to heat the freezing inlet water. 

Capacity Labels on Australian Units

The gas continuous flow systems sold in Australia are usually labelled by their maximum flow rate at a stated temperature rise. This is commonly around 25°C. You’ll see figures like 20 L/min, 24 L/min, or 26 L/min on the box.

Meanwhile, electric Instantaneous Units work differently.

They tend to have lower L/min flow rates than gas systems. Unless you already have a 3-phase connection available, electric tankless systems are best used for “Point-of-use” systems.

Step‑by‑step: how to size a continuous flow water heater in Australia

Once you understand flow rate and temperature rise, sizing becomes simple. Here are the three steps to follow:

Step 1: Work Out Your Peak Hot Water Use

Begin by determining your busiest period of the day. It is likely in the morning or in the evening when most people are probably utilising hot water at the same time. Now, make a list of all the fixtures that could be in use at the same time. Common combinations can be:

• Two showers running together
• One shower plus a kitchen tap
• A shower and a washing machine filling
• Three showers in larger households

Worked Examples:

• Standard Family Home: 2 x 3 star showers (9 L/min each) + 1 x Kitchen Tap (6 L/min) = 24 L:min peak demand. 
• The Executive Apartment: 1 WELS 3-Star shower (flow rate of 9 L/min) + 1 Bathroom vanity (flow rate of 4 L/min) = 13 L/min.

Step 2: Estimate Your Required Temperature Rise

Determine how much “heavy lifting” the burner or element needs to do. Calculate your rise (°C) as follows:

Target Temperature: Normally 50°C in the case of bathrooms or 60°C in the case of kitchens/laundry.

Inlet Water Temperature: This depends on your Australian climate zone.

1. Cold Zone (TAS, VIC, ACT, NSW Highlands): Winter inlet can be 5°C to 10°C.

2. Temperate Zone (Sydney, Perth, Adelaide): Winter inlet should ideally be around 12°C to 15°C.

3. Warm Zone (Brisbane, Darwin, Cairns): Winter inlet rarely drops below 18°C to 20°C.

Example: If you are in Melbourne (5°C winter water) and you want 50°C at the tap, then you need a temperature rise of 45°C. However, if you are in Brisbane (20°C winter water), you only need a temperature rise of 30°C.

Step 3: Match Your Numbers to Manufacturer Performance Specs

A unit labelled as “26L” is rated for a 25°C rise. When the temperature difference differs, the flow rate will be lower. Most reputable Australian brands, such as Rinnai or Rheem, supply a “Flow Rate vs. Temperature Rise” graph in their manuals. Therefore, you have to:

• Locate the column corresponding to the temperature rise you need, usually 45°C for the southern states.
• Make sure that the L/min for that particular increase is matched or exceeded by the “Peak Demand” figure in Step 1.

Electric vs gas tankless sizing differences in Australia

Choosing between electric and gas directly affects how much hot water you can get at once, how stable the temperature is, and whether the system actually keeps up in winter.

Gas continuous flow water heaters

Gas systems are widely preferred in Australian homes that have multiple bathroom fixtures due to their high energy density. They handle cold Australian winters effectively, maintaining high flow rates even when the incoming water is near freezing.

They are readily available in sizes up to 32 L/min, which can comfortably support three simultaneous showers.

Electric instantaneous water heaters

Electric tankless systems heat water using electrical elements. This limits how much energy they can deliver at any one time.

These are best for “point-of-use” applications, such as a single ensuite, a granny flat, or a kitchen renovation where running a gas line is too expensive.

However, in southern states during winter, a standard single-phase electric unit may only provide enough heat for a single low-flow shower.

Comparison Table: Gas vs. Electric Tankless

Feature	Gas Continuous Flow	Electric Instantaneous
Common sizes	16L, 20L, 26L, 32L per min	7L, 9L, 12L, 20L+ per min
Best for	Multi-bathroom family homes	Single bathrooms, studios, sinks
Winter performance	Excellent	Poor
Infrastructure need	20mm Gas line/LPG bottles	32-40 Amp circuit (or 3-phase)

Tankless water heater sizing by Australian climate zone

Climate plays a bigger role in sizing than many people realise. Below is a summary of sizing by climate zone.

Cold and temperate climates (TAS, VIC, ACT, southern NSW)

In these areas, the gap between the freezing street water and your hot shower is huge.

You must size conservatively. If a sizing chart says a 20L unit is fine for two bathrooms, but you’re in Hobart, ignore it. Go for the 26L or 32L. You need that extra headroom for the winter months.

Warm and tropical climates (QLD, NT, northern WA)

You have an advantage. Since your cold water is often already 25°C, a 16L unit can actually perform like a 20L unit.

You can often save money by choosing a slightly smaller unit without sacrificing comfort. However, don’t go too small if you have a massive rain-head shower because those things can exceed 15 L/min on their own.

Mixed or variable climates

Coastal regions like Perth or Adelaide experience mild winters but can have sudden cold snaps. Always size your system for the lowest recorded winter inlet temperature.

Key features to prioritise for large families

If you have a house full of teenagers, look for the following features:

• Low Flow Activation: Look for units that start heating even at low flow (e.g., 2 L/min). This prevents the heater from shutting off when you’re just rinsing a single cup.

• Temperature Controllers: These are pads you install in the bathroom or kitchen. You can set the shower to exactly 42°C so you never have to mix in cold water. It’s safer for kids and saves gas.

• Heat Exchanger Warranty: The heat exchanger is the heart of the system. Look for a 10–12 year warranty.

Common mistakes to avoid when sizing a tankless water heater

Usually, most sizing problems come from a few repeated assumptions. These mistakes don’t usually show up on day one; they show up on cold mornings, busy evenings, or the first winter after installation.

🟩 Relying only on the number of bathrooms

This is the most common option, and it’s a risky one because two homes can both have two bathrooms and need completely different systems.

The demands from a home with small and staggered showers will differ from a home with two rain showers, a tap in the kitchen, and a washing machine operating simultaneously. The calculation does not relate to bathroom numbers alone.

🟩 Ignoring climate and winter performance

A design that works fine in the summer might struggle significantly in the winter if designed for ‘average’ conditions.

In the southern states, the temperature of the inlet water might even dip below 10°C, thus adding a further 15-20°C temperature rise in the winter.

A design failing to consider the winter performance might throttle the hot water.

🟩 Choosing based purely on the maximum advertised L/min

Normally, the flow rate indicated on the box as the “headline” flow rate assumes a temperature difference of 25°C.

If the difference is 40°C, the flow rate could be 30 to 40 percent lower than indicated. Without looking at the “performance chart,” the average homeowner assumes that the unit’s flow rate is higher than it really is.

🟩 Overlooking existing gas or electrical capacity

Many homes simply aren’t ready to support high-output systems without upgrades.

Large gas units often require increasing the size of the gas lines or increasing the MJ supply. Electric models may require switchboard upgrades from the utility company.

Final Thought: Tankless water heater sizing and selection checklist

Choosing the right tankless water heater in Australia involves knowing when your household actually uses hot water, how cold your winter inlet temperature gets, and whether your gas or electrical setup can support the system you want.

If you get those things right, a continuous flow heater feels effortless.

If you miss one, you’ll notice it every morning. Ensure you size for winter, size for peak use, and read the performance charts properly. This will help keep your system quiet, consistent and reliable for years. 

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