We're talking about the humble hot water cylinder. The useful heat energy stored in a 250L cylinder - the most common size in Tasmanian homes - is 15.4kWh. That's 15% more than a Tesla Powerwall 2! You don't need solar to enjoy the benefits of using it like a battery, and the upfront cost is only about $275 (free if you have a Sanden heat pump hot water system). On average, our 36 case study households would save $176/year or 8% of their annual electricity bill. So it pays for itself in well under 2 years!

First you need to make sure you're on the time-of-use Tariff 93 (learn more here). Then have a timer installed on your hot water cylinder to come on 10am - 4pm AEST*. It's that simple! 

It's even simpler if you have a Sanden heat pump hot water system because they already have a timer built-in; all you need to do is set it.

How does it work?

You use hot water when you want, and then wait for the right time to 'recharge it': when your solar panels are generating excess power, or during the off-peak period when electricity is cheap. 

By far the most cost effective way to do this is with a simple timer that comes on from 10am to 4pm AEST*. Being through the middle of the day, if you have solar panels there's a reasonable chance they'll help to recharge the hot water cylinder. But even if you don't, or if the sun doesn't shine at the right time, the electricity is cheap as chips during the daytime off-peak period on Tariff 93 (currently 14.876c/kWh, which is 15% cheaper than Tariff 41).

There are many timers on the market that will do the job. Our solar partners offer a high-quality timer fully installed for $284.

What if I run out of hot water?

There is a possibility, albeit an entirely manageable one, that adding a timer will cause you to occasionally run out of hot water. Most households use only a fraction of the capacity of their hot water cylinder each day and so will have no problem. But if your household uses up the entire capacity one evening, you won't have hot water again until about midday the next day (a couple of hours after the timer comes on). Here are the solutions:

1) Twice a day timer

The very simplest solution is to set the timer to come on twice a day; once in the daytime off-peak period, and again in the nighttime off-peak period. However, if you've got solar it's much better to avoid nighttime consumption wherever you can. Also, if you're draining the entire tank in a day then you've got a bigger problem: you're using too much hot water! 

2) Use less hot water

The best solution is to use less hot water. Here are the most effective strategies:

• With >95% of hot water used for bathing in most households, an efficient shower head is the most cost effective way to reduce energy consumption. Full stop. They cost as little as $15 (although you may want to pay a little more to get a better showering experience), and take 15 minutes to install (there are 306,000 videos showing you how). They typically save upwards of $100/year on electricity alone. Do it!
• Take shorter showers. 
• Wash your clothes in cold water. While warm water can assist in removing tough stains, it's usually not necessary. Hot isn't necessary for hygiene (it's not hot enough to kill bacteria, in fact, by the time it gets to your washing machine it's about the temperature that bacteria love) and leads to clothes wearing out more quickly.

3) Increase storage 

There are also two ways you can increase how much energy you have stored...

• Turn up the thermostat on your hot water cylinder. A tank set at 70 degrees C holds about 20% more heat than one set at 60 degrees C, however it will also lose about 20% more energy in standing losses (heat lost 24/7 from the cylinder to surrounding air). Note that the thermostat is behind a panel that is only supposed to be accessed by a licensed electrician or plumber as it also contains live 240V wires!
• Get a bigger hot water cylinder. The downsides here are that they cost more upfront, and they have greater standing losses (losses are proportionate to cylinder size). But these costs should be recouped quickly through the savings made with the timer

How much will I save?

As mentioned above, our case study households would save an average of $176/year, or 7% of their electricity bill (on top of the $108/year average saving by switching to Tariff 93). But this varies widely depending on hot water usage. 2 of our 36 case study households used gas for hot water, so it's not an option for them. Those aside, savings ranged between $35/year for an exceptionally frugal household, to $550/year for a hot water guzzling household!

Why we recommend simple timers over fancier Solar Diverters

If you have solar panels, there's a fancier way of using excess solar to recharge your hot water cylinder; a solar diverter. In a technical sense they do a better job, but they are far more expensive to install (between $850 and $2,000)! If your hot water consumption is high enough for a solar diverter to make good financial sense then you're using way too much energy on hot water! You would be much better off reducing consumption first (see tips above), and then investing in a Sanden heat pump hot water system second.

We modelled a solar diverter in detail for one case study. This household used 30kWh/day of electricity, 12kWh/day of which was on hot water, and they had a 5kW solar panel system facing due north. With a simple timer, 47% of hot water energy was met by solar. A diverter bumped this up to 68%. The annual saving was just $60 more with the solar diverter. Since it costs at least $560 more to install, the payback period for the solar diverter (relative to the timer) was almost 10 years. Given the warranty is only 5 years, that's not a great prospect.

The most detailed techno-economic modelling for Tasmania ever!

We hope you've found this post useful and informative. See this blog post for more results and recommendations from our modelling, as well as to learn how we did it.

* 11am - 5pm daylight savings time, but there is no need to change the timer once you have it set.

Note that some details may have changed since this article was first published on 14 Nov 2018.