Electric hot water systems are by far the most common type of water heater in Australia, with some 50% of households using one. Out of the most common types of water heater (solar, heat pump, and gas), the electric system is typically the cheapest to install, but the most expensive to run. In fact, water heating makes up one-quarter of the average electricity bill.
Understanding your electricity consumption is one of the most important things you can do for your household budget. In this article, we will explore what affects electricity usage and how much systems typically use, and we will give you tips on how to bring that energy bill down.
What Affects Electricity Usage of Electric Hot Water Systems?
Several factors can influence the electricity usage of your electric hot water system, including its size, how often it is used, its temperature settings, whether it is insulated, and its age. For example, a household of two will have a different usage to a household of five. Still, that same household of two might have a greater usage per person if they shower more, run a bath more, use their dishwasher and washing machine more, or have their system turned hotter.
There is also a large difference in standby and active energy use. Depending on when these times are active and for how long, your energy costs will also be impacted.
Average Electricity Consumption of Electric Hot Water Systems
On average, your electric hot water system will use between 2 and 4 kWh per day (or 2000–4000 watts) as it actively runs for 3–5 hours per day. In Australia, we typically pay between $0.25 and $0.45 per kWh, so the cost of heating your water can certainly add up. At the very lowest possible end, we’re looking at roughly $200, while on average at the upper end, we can see prices of $650 or more—all for the convenience of having hot water.
Fortunately, there are plenty of things we can do to reduce our energy usage and therefore, save our wallet some financial pain.
First, let’s look at the power consumption of different types of electric hot water systems. Both storage and instantaneous have their benefits and drawbacks. Storage systems have the incredible convenience of providing a lot of hot water at all times. Very rarely will you ever run out, but you do pay extra for this convenience. In instantaneous systems, you’re paying more only when you need hot water, but heavy usage can overwhelm smaller systems as they work to meet demand.
Electric vs Gas Hot Water Systems: A Comparison
The comparison between electric and gas hot water systems is an interesting one. Electrical systems (obviously) run on the electrical grid and contribute to your kilowatt-hour usage rate, but they can be high-energy-using appliances as our need for hot water is almost constant throughout the day. They are also incredibly convenient. As long as the power is running, you have hot water.
Gas hot water systems, however, have no reliance on the electrical grid. Even if the power goes out, you will still have hot water. However, you will need to install a gas system and make sure your household tanks are regularly replaced according to your needs.
Gas systems also run on natural gas, which can be an environmental concern for people.
In terms of cost to run, the government’s Energy Rating website states that the average annual running cost of an electric hot water system is approximately $615 per year, while the cost for a gas hot water heater is around $330 per year.
Further, their environmental cost is something to consider. For most of Australia, the electrical grid is still reliant on burning fossil fuels, so electrical systems will be contributing to greenhouse gas emissions. The solution to this is to opt for the most energy-efficient models on the market. Models with better insulation and more effective heating elements can go a long way to improving the efficiency and performance of your electrical unit.
Conversely, gas units expel carbon dioxide and have the potential for methane leaks. Again, choosing an energy-efficient model is the way to go, as is choosing a model with improved emissions-reducing technologies. Then you can rest assured that your new appliance is doing the best it can for the environment and your wallet.
How to Calculate the Running Costs of Your Electric Hot Water System
Check your latest energy bill to see how much your current energy provider is charging you per kilowatt-hour. As we have previously discussed, you can usually expect to pay between $0.25 and $0.45 per kWh, but this also depends on your peak usage vs off-peak usage. It is best to calculate your average cost per kilowatt-hour as this will reflect you and your household’s habitual usage. Once you have determined how much you are paying overall, you can start to research which systems may help to bring that final number down.
Your power bill will likely change all the time. In warmer climates, you may be spending more in summer to keep the air conditioning and fans running, while colder cities might be paying more in winter to keep the indoors toasty warm. Wherever you live, there is a simple equation to determine what your energy bill will be, which can also determine how much a given hot water system will cost you to run per bill cycle:
Bill ($) = energy use (kWh) × energy price ($/kWh)
Using this handy equation can help you determine your estimate for your next bill cycle.
Tips to Reduce Electricity Usage for Electric Hot Water Systems
So, how can you reduce your power consumption and reduce your system’s power usage for heating water? Well, there are several practical ways to lower power consumption, including reducing the system’s water temperature, using timers to limit shower time and ensuring a storage system is only active during off-peak periods, installing insulation around your pipes to preserve temperature, as well as scheduling regular maintenance to ensure your installation is running at its optimal operation capacity.
It is always best to assess your energy usage and make informed decisions about the type of system you are operating with, whether it is tank or tankless, gas or electric, and how to set your thermostat or the power supply for your system.
If you want more tips from the experts in hot water systems, contact Same Day Hot Water Service today. We can discuss your options, provide more information about what is best for your house, provide the latest information on energy efficiency and water heaters, and most importantly, inform you about how to get the best savings from your system for your next power bill.