Save on Water Heating Costs by Making a Wise Choice

14 / 05 / 2018

How to save on water heating costs? Approximately 12 to 25 percent of your household energy bill might be because of your water heater. The expenses will accumulate and this goes on month after month.

To reduce energy use, it’s best to start with an energy-efficient water heater in the first place. If your old water heater has been in service for 10-20 years, it’s recommended to replace it with a modern unit (which could be more energy efficient). In addition, aging units eventually lose their efficiency and effectiveness in heating water.

For example, traditional water heaters usually have tanks to store hot water and then deliver it when needed. This results to significant heat loss (thereby added energy use) because the hot water is just sitting there. In fact, up to 30% of the energy would be wasted in this scenario. In contrast, many modern water heaters now are tankless in nature. This means hot water is produced on demand and there’s minimal heat loss.

Although tankless units are more expensive upfront (both the unit and installation could be costly), the monthly energy savings will be worth it in the long run. That’s because tankless water heaters could be 33% more energy efficient than traditional units. You could save at least $100 each month which would compensate for the additional upfront cost of the unit and installation.

The savings become more apparent if you have a bigger household or you’re a frequent user of hot water. Whether it’s for the bathroom, laundry or kitchen, the savings will also accumulate. That’s why it’s highly recommended to choose an energy-efficient unit in the first place.


What about solar hot water systems?

These units take advantage of the free energy provided by the sun. However, most units might only be able to provide 50 to 90 percent of your daily hot water needs. These units often require electric or gas boosters to provide the rest.

This effect is more pronounced during cloudy days (which are the days you need a hot bath more). The energy being acquired from the sun won’t be enough to provide hot water (either not enough of water is produced or the water is not hot enough). The booster will then kick in to fill the gap.

Solar hot water systems are becoming popular because there will be reduced energy bills. Although these units are more expensive upfront, the extra costs will be paid back as you realise the monthly energy savings. Also, the energy is coming from a renewable source which means this has a huge impact on sustainability (lower greenhouse gas emissions).


How to choose the right unit

Getting this right could mean thousands of dollars of long-term savings as well as lower carbon footprint due to higher energy efficiency. It starts with determining your own requirements and then choosing among the most practical units.

How many people are in your home right now? How many of them use hot water frequently and on what purposes? The goal here is to estimate the capacity of the water heater you’ll be purchasing. For instance, choosing a higher-capacity unit than what was supposed to be could mean significant heat losses. It’s especially the case with traditional hot water systems where most of the hot water will just cool off.

Aside from estimating your needs and the resulting water heater’s capacity, also consider the availability of energy sources in your area. Is natural gas widely available in your location? Does your area receive good amount of sunshine for most of the year? The answers to these questions will affect which type of water heater you’ll purchase.

Now you’ve determined your own requirements and your area’s viability, it’s now time to decide on which unit to buy. Gas-powered or electric hot water systems? Which brands are the most reliable? Where can you buy a quality water heater (e.g. reputation of the seller or distributor)?

About half of Australian households still use conventional electric water heaters. However, they’re more expensive to run than gas-powered units. Moreover, electric water heaters might be producing at least 3 times more greenhouse gases. Fortunately, more and more homeowners are now switching to gas hot water systems (even better, they purchase solar-powered units with gas boosters).

There are still cases when electric water heaters are ideal (especially in homes or establishments with limited spaces). It still comes down to a particular situation you’re in and on what type of water heater is best for you and your household.


What’s the cheapest system to run?

It’s not a one-size-fits-all scenario because we have different locations, climate, sunlight access and home layout. As a result, the best hot water system for each home may vary.

For example, you might get the most out of a solar hot water system if your area receives a good amount of sunshine. Up to 90 percent of your hot water requirements will be met by the solar unit alone. In contrast, if your area is mostly cloudy (or just less than ideal for solar-powered devices), the unit might not be worth it.

It’s a similar case with heat pump hot water systems. These units work best in warm climates because of how heat pump systems work. They extract heat from the air and transfer that into the water (“pumping” heat into the water). In colder climates, it will be harder for heat pumps to extract warmth from the air, which makes the unit to work longer (more energy consumption).

Often, it takes significant research to know which system is cheapest to run. To make things a bit easier, it’s recommended to ask a reputable supplier or installer. For instance, you can ask them about the solar gain you could expect in your area and climate. This will give you a rough idea whether a solar-powered unit is best for you.

To make it organised and comprehensive, you can make a simple table with the columns as:

  • Conventional Electric
  • Gas-powered (LPG or natural gas)
  • Solar powered (with boosters)
  • Heat pump hot water systems

Next is you create rows that include the following:

  • Upfront cost (unit price & installation)
  • Operating cost (monthly energy bill due to the unit)
  • Warranty (including parts replacement & labour)
  • Estimated service lifespan
  • Possible rebates & other incentives (e.g. the government will further encourage use of more energy-efficient or lower emissions devices)
  • Other notes (e.g. storage tank or tankless, the space available, home layout, special concerns when installing the unit)

You then make a comparison and see which one yields to the lowest cost. It’s highly recommended that you pay extra attention to the monthly operating cost because this one accumulates.


The most practical tip on how to save on water heating costs

Notice that we didn’t discuss tips such as taking short showers and lowering the water heater’s temperature. Although these still yield results, these actions may require a drastic habit change or daily willpower expenditure.

The biggest win you can have is by making a wise choice in the first place. That’s because it’s almost a one-time work and still you’ll realise cost savings month after month. If you choose the best hot water system (reliable and cheapest to run), you’ll reap the benefits for years to come.

If you require assistance in making this wise choice, you can contact us today at NSW Hot Water. We can advise you of the best hot water system for you depending on your hot water usage, area and climate. We can also provide you with upfront pricing (with or without installation). This way, you can better calculate the upfront and long-term costs of owning a water heating unit.