Hot water is a critical appliance for every home but can account for around 21% of total energy use, adding considerably to energy bills each year.

For decades we have been relying on gas boiler units that last between 8-12 years and can require maintenance. When your gas boiler is on the fritz, it’s the best time to switch to an efficient electric heat pump. When thinking about upgrading, choose appliances and technologies that suit your needs and that use the lowest number of watt-hours or megajoules.

Determining the required size of a water heater is important and can mean a trade-off between cost and performance. The system should be sized for the dwelling, not necessarily its occupants. It is generally accepted to size at around 50 litres of hot water per person per day. In a storage system it is good to have 1.5 days capacity.

Heat pumps

Heat pumps use around 60 to 75% less electricity than a conventional electric hot water system. This is because they concentrate heat from the air and dump it into a water storage tank and only use electricity to drive the compressor and the fan, instead of heating the water directly with an electric element. In this way, heat pumps use renewable energy— heat from the air—although they do still use some electricity and need a refrigerant fluid to concentrate heat from the air.  

Compared to resistive water heaters, heat pumps can reduce year-round energy requirements for hot water by at least 50%, and by as much as 80% depending on the climate, brand and model. On the existing electricity grid, the cost of water heating is roughly halved when using a heat pump compared to a natural gas water heater.

Solar thermal 

Solar thermal hot water systems consist of a hot water storage tank connected via pipework to solar collector panels on the roof. The collector panels are placed on a (preferably) north-facing roof, although a west-facing roof can also work well in many cases. The tank can be situated immediately above the panels on the roof (called a close-coupled system), above and a small distance away from the panels within the roof cavity, or at ground level (known as a split or remote-coupled system).  

Depending on the climate, solar thermal hot water heating systems can provide up to 90% of your hot water for little cost and using the sun’s energy – and without generating greenhouse gas emissions. Solar thermal hot water systems have low maintenance costs but a higher installation cost. You don’t need sun every day of the year, since the systems always include a backup heater (best go for electric), so even when you have cloudy or snowy days, you won’t run out of hot water. You will save more on your water heating bills if you live in a sunny area because you won’t have to use the backup heating source as frequently.

Solar electric or direct PV

An alternative approach is electric direct PV (Photo Voltaic). In such systems, solar PV panels are connected to a traditional electric resistive water heater via a maximum power point tracking controller/inverter, which ensures you get the most energy possible from the PV panels. The PV panels may be connected to the bottom element in a two-element tank or the single element in a standard single-element tank. Direct PV systems can cost as little as $300 for a simple DIY controller, through to several thousand dollars for a complete package.

For days with less input from the solar PV, boosting will be required for both PV diversion and direct PV systems. Boosting can use the electric element in the tank for overnight heating from mains grid power (via the settings on the diverter or a separate boosting timer) or on-demand boosting from an instantaneous water heater. You’ll need to consider how much boosting you are willing to pay for over winter. Water heating requires more energy input in the cooler months due to higher hot water demands. Winter is also when solar input is lowest.

While a solar or heat pump water heating system may require more upfront investment, the savings come over the long run because water heating bills can be reduced by as much as 50 to 80 percent. Gas utility rises, fuel shortages, and other issues with utility-based heat will no longer be your problem. To see how much you could save with solar for your hot water use, look for an online Solar Calculator which can estimate electric bill savings based on your unique property and energy usage.

Comparative costs

Though it varies depending on location, available rebates, and the cost of installation a general price guide is as follows:

• Heat pumps 3-7k
• Solar thermal 2-7k
• Solar diversion can be less than 1k as it uses an existing solar array
• Direct PV 2-5k because it has a dedicated array, depending on array size and which water heater cylinder you use.