When the sun shines at its brightest, most of Australia’s 1.3 million houses with rooftop photovoltaic (PV) solar panels generate more power than they use. Whenever this occurs, excess electricity is exported to the grid.
From the older days (say, roughly 2009), most householders will be quite pleased with this, given the amount of savings as well as the satisfaction of generating and utilising renewable energy. At Victoria, for instance, it would have made them up to 60 cents per kilowatt hour exported.
However, these premium feed-in tariffs have now been slashed to as low as 6 pennies or less. Meanwhile, householders might pay 30 cents a kilowatt hour or more to buy electricity in the grid when their solar panels are dormant in the evening.
Not surprisingly, many solar panel owners are wondering how they can avoid giving electricity off cheaply for retailers. Maximising the usage of power in the home while the sun shines is 1 strategy, but there are just so many times daily you need to run the dishwasher!
The option is to try and save energy for later use, by buying either a house battery system or an electric engine. However these may be expensive, and speaking on financial terms this strategy may not yet be profitable as most of these products are still engineered with civil engineering intended for mass use, in mind. There is, however, an economic energy storage option that many householders might not have considered.
A large percentage of energy demand in any establishments (often around 20
Hot water and space-heating heat pumps operate just like fridges and air conditioners. They use a refrigeration cycle to pump heat “uphill”, out of a colder zone into a warmer one. The advantage we like with fridges and air conditioners is the cooling that occurs when heat is pumped out of somewhere we do not need it (such as from our lounge area on a hot summer’s day) to somewhere else (the atmosphere outside). For hot water heating pumps, it’s the other way around — we would like to collect and utilize the ambient heat that’s constantly present in the atmosphere outside our homes — the manner that a reverse-cycle air conditioner does when it’s on heating mode.
The finest hot water heat pumps can capture up to 3.5 times as much heat energy from the atmosphere as they use in electric energy, meaning that the resulting 5000l tank of warm water represents a net gain of renewable energy.
Already in Australia, more than 184,000 homes have hot water heat pumps, which are eligible for renewable energy certificates.
Making hot water stack up
So, to the economics for the homeowner. If you currently heat your water by gas, and you already have solar panels that generate excess electricity which you sell back into the grid for little benefit, a hot water heat pump might be a very rewarding investment — particularly if your present hot water machine is because of replacement or has a bad energy star rating.
Having bought a hot water heater pump, your best strategy is to activate it in the middle of the day once the sun is most powerful. The machine will heat water and store it at a tank for later use, not unlike how electricity is stored in a battery.
Now, instead of selling excess solar energy back to the grid for a pittance, you are using that power to heat water more cheaply than you can using gas or using power after dark. This shift could raise the value of your extra electricity by a minimum of five times.
Are these economics possible? As occurred with electricity, the price of gasoline is going up. According to my most recent gas bill, I now pay the equivalent of 8 cents per kilowatt hour (roughly A$22 per gigajoule, in gas sector terms).
Gas now costs more (per equivalent unit of energy) than what electricity retailers will cover you for surplus solar energy. More importantly, once we consider a gas hot water heater might only be 70% efficient at transferring the warmth of the burnt gas to the water, whereas a heat pump could efficiently be 450% effective when capturing renewable heat in the outside air, this readily tips the balance.
How much spare solar electricity do I want?
An important question is how much surplus solar power is needed to supply a home with a 1 – 3000 litre tank full of warm water. According to a recent report from the Alternative Technology Association and earlier work by Beyond Zero Emissions and the University of Melbourne Energy Institute, the answer is around 3.5 kilowatt hours Every Day, for a generally sized dwelling.
In most Australian locations, a 1 kilowatt solar system would be sufficient to provide this quantity of energy and heat your water. However, since the average fresh rooftop solar system is now about 4.5 kilowatts, there may well be plenty of excess solar electricity generating capacity available on a lot of houses.
Here’s a bottom line: rather than paying around A$400 annually for gas to heat water, somebody with a massive rooftop solar system might instead use their surplus home-generated power, which their retailer values at just A$80 per year. The outcome is that the homeowner is better off by A$320 per year.
This analysis ignores the up-front price to replace a gas hot water heater with a hot water heat pump. But prior to your hot water system is on its last legs, it would pay to give this idea some thought.