Don’t you hate it when you’re out and realise you’ve left the gas on at home? It’s a nightmare when we do it with a gas stove, yet millions of Australians are essentially doing this every day to keep their water piping hot. There’s a more efficient alternative: use a hot water heat pump as a thermal battery.
Gas Hot Water Systems Are Money-Burning Machines
All over the country, steam rises from water kept piping hot by the lick of blue flames. Gas hot water systems are so extraordinarily wasteful — especially the storage varieties that keep water continuously hot for whenever it is needed — that they are the major reason why hot water accounts for a fifth of Australian residential emissions.
These systems aren’t just burning gas: they’re burning money. Phasing them out would provide combined annual savings to Australian households of $4.7–6.7 billion by 2040, by which point gas households will pay $660–960 per year more than those with a heat pump water heater, according to University of Technology Sydney research.
The future of hot water is electric — and especially for homes with a solar system — a hell of a lot cheaper. But what good is solar when you need to do that last load of dishes after dinner or an evening shower before heading to bed?
Fill Up The Tank With Cheap Solar
The answer is simple: use your hot water as a battery.
Owners of electric hot water systems can configure them to heat the water when the sun is out to take advantage of abundant solar energy: all that hot water is stored, insulated inside a tank, ready for when you need it, serving as a thermal battery.
This is also great for the grid, transferring electricity use from periods of high demand to times when energy is plentiful, and providing voltage reduction that minimises the need for rooftop solar curtailment.
A recent University of New South Wales (UNSW) study found the average Australian household could save up to $400 a year on electricity by installing heat pump hot water, and powering it in the middle of the day during peak solar generation periods.
The study, based on a four-person working family with an average daily hot water consumption of 200 litres, found gas is financially competitive with electric hot water today only if you excluded the daily supply charge, which can cost up to $360 a year in Australia even if you don’t use a single puff of gas.
Switching to electric hot water is one of the key steps to disconnecting from gas entirely, removing that expense once and for all.
The UNSW study found the lowest annual water heating bill was provided by a household with rooftop PV and a premium model heat pump set to work with a timer during solar soak hours.
Resistance Is Futile (For Some)
The research also indicated that if a resistive electric hot water system has reached the end of its life and needs replacement, there are benefits to upgrading to a heat pump, which is more efficient and delivers 67% less emissions on average.
Payback period cases for replacing a resistive system with heat pumps fall within warranty periods — which is key given how short many heat pump warranties are.
Resistive electric hot water systems are cheaper to purchase but use about triple the energy of a heat pump.
SolarQuotes in-house installer Anthony Bennett says that both options can be effectively used as thermal batteries:
“A typical 300 litre hot water unit stores approximately 14 kWh of energy when heated to 60°C from an ambient temperature of 20°C. A simple resistive element tank costs about one ninth of what a home storage battery does, if you don’t already own one, so even if it “leaks” 1 or 2kWh/day in standing losses, it’s still worthwhile. And if we look at heat pumps using 25% of the electricity consumed by an element while still delivering the same amount of hot water, then you may still have enough power to charge your EV and heat your home in mid-winter.”
Your hot water system installer should set the timer to heat your water from solar energy and/or off-peak electricity – make sure they show you how to change this yourself after they have finished the install.
More Than One Way To Heat A Tank
There are a number of different approaches to ensuring your hot water system is making the most of cheap solar energy. UNSW project lead Dr Baran Yildiz tells SolarQuotes he recommends using a heat pump’s inbuilt timer (check our comparison table to confirm which systems have one and what type if so), or buying an external timer.
Yildiz says:
“The heat-pump’s internal control (if available) would be preferred over the timer control as it won’t interrupt the operation and cause any potential impact on its compressor unit and lifecycle.”
Setting the timer for 11am through to mid afternoon gives the best chance of coinciding with peak solar generation. External timers can also work with resistive electric hot water systems.
If you are having the system installed, Yildiz suggests making sure the installer takes care of the timer for you:
“Some installers by default offer to install timers for the electric water heating systems when they install solar systems and program the timers to run during solar period. Getting this installation organised while the installer is already on-site might save users a secondary call-out fee.”
You can go further by configuring your solar inverter to only activate the hot water system when there’s actually enough solar available. Anthony says you can set up your system to “turn on a load when your solar has ramped up to a certain yield … solar diversion is the common terminology, because you take electricity destined for export to the grid and divert it into your own storage or consumption.”
On this perfect solar day the inverter has been set to turn on the hot water service when there’s 4kW of export available. It stays on for around 1¼ hours until the thermostat cuts out, however the diversion circuit would stay on until at least 4pm.
Another option is smart switching, which Anthony says “can be used for both resistive and motor loads (like heat pumps and pool filters) but may need to be programmed for the appropriate solar threshold and time window.”
“You want to switch on when there’s enough sunshine to run the load but not on and off every other minute. For this example the diverter activates once there’s 4kW of export (and stays ON for 25 minutes) if the sunshine wanes to 2.2kW after that time, then it switches off,” he adds.
For a hot water service, using a 1.8 or 2.4kW element in place of the standard 3.6kW means you’ll have more opportunity to activate the diversion circuit without needing to import the energy seen here in red.
For owners of resistive hot water systems, dynamic solar storage can squeeze the most value out, particularly when all parts are working within the same manufacturer ecosystem. “With one app everything is visible and control is at your fingertips,” Anthony says.
Yellow shows energy used in real time while orange shows every remaining watt of yield diverted into hot water. The orange area could be worth 20c/kWh while the grey only earns 5c or less in export to the grid.
It isn’t always as efficient, but the simplest option of all is having your heat pump connected to the controlled load with the right retailer, which Yildiz recommends particularly for people without their own solar:
“These days most DNSPs expanded controlled load circuits to daytimes.1 The key here is to find a retailer which offers cheaper rates during solar-soak window so they benefit from excess solar generation in the network.”
Goodbye Gas Anxiety
For more on heat pump hot water systems, read our comprehensive guide. Once you’ve gotten quotes for your preferred system, you can look forward to disconnecting from gas, and rid yourself once and for all from that nagging sense that you’ve left the gas on at home.
Correction: The original version of this article wrongly stated that the emissions from hot water exceed that of transport, at a fifth of Australia’s carbon emissions. This is incorrect: hot water represents a fifth of residential emissions, not total emissions, and does not exceed that of transport.
Footnotes
- be aware that heat pumps are more efficient when ambient temperatures are higher, so overnight off peak may not be ideal ↩
About Max Opray
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Good advice here – thanks Max.
I have looked into a dual element resistive hot water system with the intention of topping up (the heat) with excess solar and controlled load forr the main element. However there are a couple of obstacles for this:
They usually come with two 3.6kW elements. The top element would need to be replaced with 2.4kW element to be suitable for a 10A circuit
The tank comes wired with the top element effectively disconnected. In NSW there are complicated rules about wiring in the top element (so plumbers are not electrocuted)
It seems that the top element does not have its own thermostat – it relies on the bottom element thermostat for temperature control
I could have an expensive diverter installed to send solar to the bottom element but the economics dont add up for me.
The other issue, covered elsewhere in these blogs, is that a resistive element will heat the water over a wide range of amps whereas a heat pump needs a minimum amperage to operate. This means that a heat pump could drain a battery or import from the grid if there is insufficient (excess) solar.
A 315 L resistive element storage HWS stores 16.5kWh in the full volume of water between 20C and 65C. Other than use as hot water in the home when the sun is up or down, this energy can be moved to air in the home or, for example, the water in a spa, with a heat exchanger and relatively cheap plumbing and pump. For some this could be a way of making up for a deficit it battery capacity that only happens in winter.
and no moving parts + Thermann 250L Electric Hot Water System (HWS) warranty is 10 years on the cylinder for domestic (non-commercial) installations.
I have resistive under floor heating as well as resistive Hot Water. Do you have any solutions to handle the under floor heating component? I have seen some smart relays such as Solar Catch and was wondering if you have any practical experience of using these devices.
315 litre tank in the roof heated by 2 thermal solar panels.
Electric boost when needed. ( off peak electricity 22c per kWh) Pump to increase output pressure.
Installed 1995 (about $2000)
Still going strong.
My EV charges at this time too ( 12 am to 6am ) for 8c per kWh.
So the power companies have excess power to sell cheap at night.
Due to having to run power stations anyway and excess wind power.
Question is,
Why is my hot water ( J tariff ) 22c per kWh and the EV is only 8 cents ???
Paul, when we had solar put on, SAPN (in SA) put like for like in on the meter ‘upgrade’ . . . existing single tariff on analogue meter with timer for off peak HWS, they put in smart meter for normal circuit and a 2nd smart meter for CL !
Ideally, our solar co. should have talked to us about this, and made the right requests, the CL meter is not affected at all by the solar, which goes through the normal circuit meter, so for a couple of years we lived with it, costing us about $90 more per quarter on the bill for that.
We ended up putting the HWS on the normal circuit with a timer, and while we could easily have it set for solar soak hours for free, we just have the timer set to run it on the EV rate overnight 000-0600 too, as all power coming is is on 8c fro that 6 hours. (Note some states / regions even have free power in some solar soak times, as well as 8c rates, it varies all over the country.)
If we timed it to solar soak, sure, be great in summer, but winter and shoulder months we MIGHT spike over production level, if for example we had to run the griller, put a kettle on, and the HWS kicked in, it could go over what we are producing on those cloudy days.
As it is, the 250lt Rheem with 3.6kw single element used about $1 each day on cheapest TOU CL, and on the EV rate now uses about 35c, so pretty happy with that for now.
Eventually we’ll get a battery I’m sure, so all will be moot point then.
Hi Les,
That’s great information.
When our solar went on in 2012 we got a digital meter but not a smart meter.
I’ll be forced on to a smart meter when I add more solar or the current system needs replacing.
I now know what to ask for.
Regards,
Paul ( in Adelaide)
Hi Paul, interesting.
Always thought a digital meter was a smart meter, but maybe there was some sort of intermediate thing going on back then.
So did you stay on a single tariff ?
Does the digital meter have 2 way comms for usage and exports ?
We were put on TOU by AGL for both regular circuit and CL HWS, no discussions, no options given, and the solar co didn’t advise us on this either, a lot of improvements could be made in these liaisons.
Apparently a consumer can choose, but not easy to go back to single rate from TOU.
I think we are no better or worse off on TOU vs single tariff anyway.
For sure we are in a particularly fragile situation here in SA, with very high peak on TOU and very low FIT, though other states are dropping fast for FITs too now.
I would advise anyone now getting solar to also install a battery too, it’s only going to get worse, and eat into any supply charge contribution ones solar might give now.
Most battery software can be set curtail exports if the status quo on the coming sun tax and decreasing FITs eventually gets into negative territory, even minor.
I think it will be a very much changed power / solar situation in as little as 5 years, one should future proof as much as possible, but how much do you go with installing costly options ?
It’s a lot of investment for good sized PV and a battery.
A balancing game for sure.
Your 3rd paragraph seemed unlikely to me and a quick search for Australia in 2022 gives total household emissions, non transport, are 20% of total emissions and hot water is 20% of that i.e. 4% of our total.
Transport sector is given as 21% of total emissions.
These figures are all estimates, of course, but to differ from your statement by more than a factor of 5 seems very improbable.
You are spot on Bob – thanks for flagging this, I’ve updated the article to reflect that.
We have had a solahart rooftop hws for 32 years; we have rainwater tanks. Alas, the system has lost its glycol and serviceability. We are looking at a heat pump hws to replace it but, where does one stop. I only use the washing machine and dishwasher during peak solar energy but I refuse to change our eating times to exchange dinner for lunch and lunch for supper just to save money.
Thanks for all yor help.
Hi David,
I assume you are talking about a close coupled unit with tank on the roof.
Glycol can be recharged if it’s leaked but it’s unusual to lose it.
After 32 years I would simply install another Solahart, seeing as the plumbing is already up there.
Thank you for your insights Max.
Solar Thermal is the most energy efficient process for heating water, not solar PV electric.
And that is why it continues to be the most popular water heating process globally by many magnitudes over alternative electric or gas fired heating processes.
Lawrence Coomber
I have a 259 Litre resistive hws on controlled load. I have a 6.2kw solar system and with the addition of current government rebates our power account with Red Energy is in credit.There are only 2 of us. As it is, it only costs us $10 per month to heat our water.
For the sake of the exercise however I’m toying with the idea of replacing the 3600w element with an 1800w element, disconnecting it from controlled load and plugging it in to the gpo located above it using a wifi controlled timer. This would allow me to heat our water directly from solar as well as being able to remotely switch off the hws when we’re away for extended periods, as well as remotely turn on the day before we return home so we can come home to hot water instead of having to wait to the following day as we do at present.
Given that CL is $0.16 per kwh and FIT is now only $0.05, this seems to make more sense economically. I’ll never be able to afford a battery storage system for power and given our daily usage of only 5.7 kwh, it would never make economic sense. But I figure this would be a very cost effective way to create a thermal battery from existing infrastructure?
Any thoughts?
We don’t use a lot of hot water, and changing the HWS to electric will not get us off gas altogether, (so we’ll still have the service charges for gas). Given our gas storage HWS is a stainless steel 5 star version I really struggle to see the economic advantage in changing to heat pump, as the upfront charges will not be recovered for many years. Given the pathetic warranties on a lot of the heat pump hws it may possibly break before we recover costs? It seems hard to justify the change UNLESS the gas hws fails first. I do think this type of analysis fails to look at the lost return on the money expended on the new equipment. It’s a major part of the cost. It’s not just about the running costs. Having said all that, the environmental reasons to change ARE compelling.
The University of Technology Sydney study this article primarily draws on certainly factors in the upfront cost of new systems: it even differentiates between premium heat pumps vs budget heat pumps, worth reading in detail if you’re interested. The study does find that gas can remain cost competitive with electric if you assume the gas connection fee is going to be applied anyway, so yes disconnecting from gas is an important part of coming out in front financially.
I’d argue its wrong to think that environmental reasons are separate to financial reasons however – a world that doesn’t start winding down gas use is not likely to be one that can sustain a healthy economy for much longer, unfortunately.
I have a 10 kW rooftop solar system with a 14kW battery. Integral to the system is a 300 litre HWS with a 1.2kW element connected so that it heats only from solar during daytime. I have not drawn any power from the grid for about 5 months now and have never run out of hot water. Simple, much less expensive that a heat pump system. Yes I can manually override and supply the HWS from the grid but have not had to so far.
Gas, forget it, I disconnected from gas heating and HWS a year ago, with considerable savings.