Which hot water system is best?

Did you know the average Kiwi family spends $700 a year just on heating hot water? About a third of our annual power bills go on warming the water that cleans our dishes, clothes, and ourselves, with hot showers making up a fair proportion of the cost (especially in households blessed with teenage daughters). If you have a standard hot water cylinder, for example, each luxurious ten minute shower (a crucial part of the morning routine in winter, surely), can add around $1.15 to the power bill.

That’s quite a burden on the budget – and it also affects our environment: the CO₂ that fossil fuels release when burned plays a big part in our planet’s current climate crisis. Even heating water with mains electricity contributes, as power stations burn oil and gas at times of peak use (such as the morning and evening on chilly winter days).

What’s best for the environment?

Unfortunately the cheapest option for heating hot water – gas – also has the biggest effect on the environment: the average sized Kiwi family using natural gas emits 1250kg of CO₂ per year – the same as driving from Auckland to Wellington seven and a half times.

By contrast, using New Zealand’s mostly clean and green electricity supply to heat your water for a year has the impact of just 2.5 Auckland-Wellington car trips.

But hang on – what about solar hot water? Surely that’s the greenest option? Well, apparently not. According to the Parliamentary Commissioner for the Environment, solar hot water heating is not that brilliant. New Zealand uses hydro for baseline electricity production and coal and gas for winter peak demand – which is the very time solar systems need a boost from electricity or gas. So although solar uses much less energy, what it does use is environmentally costly!

What’s cheapest for my household?

Two things affect the cost of your system – the upfront costs of buying and installing the unit, and the ongoing costs of running it. The EECA website has looked at running costs and has a handy graph comparing the systems on its site (search for ‘energywise hot water running costs’).

In short, it shows that the lowest running costs come from solar systems, followed by heat pump water heaters. The various kinds of hot water cylinder systems tend to be more expensive to run. Of course that’s only half of the picture – you need to consider the cost of the unit as well.

Considering family size

Whether you pay more attention to upfront costs or ongoing costs should depend on your particular household. Big families that use a lot of hot water might save money by going for an expensive system that’s cheap to run. Whereas a retired couple that uses little hot water might be better off choosing a cheaper cylinder system.

The table below (see 'What's cheapest? It depends on you') helps make those choices clearer by showing combined upfront and ongoing cost estimates over 10 years for two types of households – very low users and an average family.

Hot tips for hot water... how you can save cash

• Dry yourself in the shower with a facecloth before switching to a towel. Your towel will stay dry so you save on laundry.
• Put a radio in the shower and impose a three-song limit. The 17 minute version of In-A-Gadda-Da-Vida doesn’t count…
• Install a lid on your shower. You’ll feel warmer, so use less hot water and the bathroom will stay dry.
• Insulate older cylinders – and make sure your pipes are lagged. Lagging your pipes alone can save you $85 a year. (see Green Ideas Apr-May 2014 for an easy tutorial)
• If you have a cylinder, choose an electricity supplier that offers a night rate, and put the hot water on a timer switch. It can save you up to $310 a year compared to anytime heating.

Heating hot water: what are my options?

Heat pump water heaters

Heat pump water heaters efficiently extract heat from outside air to heat water. They’re the new chums on the block.

• Pros: They have among the lowest running costs (reducing electricity consumption by 50–70 per cent) and can be installed indoors or out.
• Cons: Expensive to purchase and install, with a good model costing up to $4900, plus installation. Some models may not work as well as expected in cold winter temperatures. To solve this problem, some have supplementary electric elements but these undermine efficiency.

Gas hot water cylinders

Gas hot water cylinders use gas or LPG to heat water in a storage cylinder similar to a conventional electric hot water cylinder.

• Pros: Gas is cheaper than electricity.
• Cons: Cylinders cost more than electric models (eg. $1670 for a 190 litre model) and more to install. Gas is less efficient than electricity at heating water, and a flue is required to dispel combustion gases, unless mounted outdoors. See the above discussion on gas costs. CO₂ emissions are higher than for electric cylinders.

A woodburner fitted with a wetback

A woodburner fitted with a wetback heats water when the fire is burning. It reduces the heat available for warming the room but also reduces electricity demand.

• Pros: May save you money if you have cheap firewood; complements a solar hot water system.
• Cons: Only useful for a small part of the year and needs the right geometry between hot water cylinder and woodburner. Installation can be expensive.

Conventional electric hot water cylinders

Conventional electric hot water cylinders have a galvanised steel case with a vitreous enamel lining. Some older models, which lasted well but only supplied water at low pressure, were copper. By law, all storage heaters must heat the water to over 60° to kill Legionella bacteria, but then add cold water to the outflow to lower its temperature to 55°. This is energy inefficient and an issue with gas storage heaters also.

• Pros: They are relatively cheap, eg $1259 for a 180 litre vitreous model, and little more for a stainless-lined model that can withstand higher temperatures and carries a longer warranty.
• Cons: Enamel can’t take temperatures high than 70° for long which makes them unsuitable for pairing with wetback stoves or solar hot water systems.

Solar water heaters

Solar water heaters work through roof-mounted collectors that use sunlight to heat water which is then siphoned or pumped to a storage cylinder. When the sun isn’t shining, gas or electricity are used to heat the water. Some models use a transfer fluid in the collector that in turn heats the water.

• Pros: Sunlight is free so running costs are very low (costs come from electric or gas top-up heating). Solar heating can complement wetbacks.
• Cons: Expensive to buy and install, may not work well in winter or very cloudy areas, and some units have failed prematurely. Water can reach boiling point, so special heat-resistant cylinders are needed. The Parliamentary Commissioner for the Environment (PCE) has recently found that solar water heaters are less beneficial to the environment than thought.

Continuous flow heaters

Continuous flow heaters have no storage tanks but only operate once a hot tap is turned on. Most use either LPG or natural gas, but some are electric. Unlike storage heaters, water does not have to be heated to more than 60° so they have a built-in efficiency advantage.

Pros: Gas is cheaper than electricity, especially piped natural gas at only 8.5 cents/ kWh (plus $1/day distribution charge). Units are small and usually installed on an outside wall.

Cons: The units are more expensive than conventional electric water heaters ($1360–$1825 depending on size, plus extra for control units). And accurate sizing is needed—it’s no use opting for a 16 litre per minute unit when you really need 26lpm. If you don’t have natural gas and plan to get LPG only for water heating, it’s probably not worth it, because LPG costs 16 cents/kWh plus $128 per year for hiring two cylinders. However, if you also use LPG for heating and cooking too, and use a lot of hot water, it could work. CO₂ emissions are higher than for electric heaters.

What’s cheapest? It depends on you...

Installation + running costs of different systems over 10 years: comparing costs for different users.

The table shows that continuous flow systems generally have an edge over storage systems. Reticulated natural gas is the cheapest option – however not everyone has the option of connecting to a gas main. Of the other options, comparing the columns shows that solar makes no sense for a low user but could work out well for high use families. Heat pumps could also be worthwhile.

(Price estimates were generated using the water heating cost calculator at www.energywise.govt.nz/tools/water-heating).

What about PV solar panels?

There is another option to consider: you could install solar panels and use the power to heat a conventional stainless hot water cylinder. In Auckland, SolarKing will install a good quality 3kW system for $9750, and an installed cylinder is about $2500. Then you simply arrange to heat your hot water only during the day. If you assume you had to buy $150 of extra winter power each year when the weaker sunlight slowed power generation, this system would give a 10 year cost of $13,500. That’s pretty competitive, and the system should last 25 years!