Power of good: how solar sponge tariffs can be a win for your pocket and the planet | Peter Mares

When our ageing immersion hot water system needed replacing, I wanted to install an energy saving heat pump.

They cost more but consume far less power, and I calculated we would get the money back by trimming $270 off our annual bills. Plus we’d be doing our bit to cut greenhouse gases and reduce demand on a stressed electricity grid.

But installing a heat pump in our 20th-floor Melbourne apartment was impossible.

The existing hot water system sat in a laundry cupboard, with the water warmed by an element integrated into the storage tank. A heat pump works like a reverse cycle air conditioner drawing heat from the air and must be installed outside.

There wasn’t room for a heat pump on our balcony and body corporate rules wouldn’t allow it anyway.

Defeated, we replaced our old immersion heater with a new one but I knew there must be a better option.

Immersion hot water systems are the most common type in Victoria but also the most expensive to run, even though, like most people, we heat our water overnight when electricity is cheaper.

Under our current plan, we can heat water for just 20.5c per kilowatt hour after 11.30pm, whereas electricity in the daytime costs us 34.5c per kWh.

This struck me as out of date. Australia now has a growing surplus of electricity in the middle of the day when the grid is flooded with so much solar energy that some is even “spilled” from the system. Government agencies encourage “load shifting” and “demand flexibility” to help absorb that excess power and stabilise the grid.

Typical advice is to run your dishwasher or washing machine in the middle of the day, yet such tasks account for a tiny fraction of demand. Plus, you need to be at home and think ahead. Hot water systems, by contrast, make up about 30% of average household energy use, and we don’t even need to be awake to turn them on.

Couldn’t we heat our water in the middle of the day and soak up some of that cheap spilled solar power?

Initial inquiries left me confused. I found others asking similar questions online but receiving impenetrable technical answers. Different states had different rules, and retailers offer a dizzying array of plans and pricing.

But I seized on the idea of a solar sponge. Available in some regions, these cheap daytime tariffs match the time when solar panels pump out the most energy and households use the least electricity.

I rang our provider and was told, yes, I could access a solar sponge and pay a mere 9c per kWh between 10am and 3pm. This was what I’d been looking for. Then came disappointment. No, I couldn’t use it for hot water, because our system was metered separately to everything else in the apartment. That’s why it appears as “controlled load usage” on our bills.

Stumped, I sought advice from Mark Ellis, an energy efficiency expert who has worked for the International Energy Agency and spent decades consulting to governments.

“We hear a lot about batteries as part of the switch to renewables,” says Ellis, “but almost every home already has a battery in the form of the humble hot water system. A typical 300 litre system can store about 15 kWh of energy, which is roughly equivalent to a standard home battery.”

In the past we were encouraged to run our hot water systems at night to soak up electricity churned out by coal-fired power stations chugging away in the dark. As those ageing plants exit the system, we should switch to the afternoon solar peak instead and store excess renewable energy in hot water systems, the “batteries” already installed in most homes.

While the switch is relatively straightforward, governments, electricity generators and retailers are doing little to facilitate the transition.

Ellis advised me to call an electrician to do two basic jobs. First, re-wire the hot water system to take it off the separate “controlled load” meter and put it on the general meter along with all other appliances. Second, install a timer on the hot water system so it only switches on between 10am and 3pm, coinciding with the cheap, solar sponge electricity tariff.

You may need to shop around for a competitive quote. For the community organisation Electrify Bouddi, Ellis has just organised a sparky to do a changeover on the Central Coast for $350 using a simple analogue timer. I’ve been quoted $1,000 for the work in our Melbourne apartment, with a digital timer that I can operate via a Bluetooth app. Even at that price, the work will soon pay for itself because we’ll be paying just 9c per kWh for the power.

Swapping conventional immersion or gas-fired hot water systems for heat pumps is probably the best option for many, especially if you can use power from rooftop solar panels.

If that isn’t an option though, and you can access a solar sponge tariff, consider putting your conventional hot water service on a timer to benefit from cheaper power. You don’t need to wait until the system needs replacing to make the switch.

It could be a win for your pocket and the planet.

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Peter Mares www.theguardian.com