ELECTRICITY CHEAPER THAN GAS FOR AIR-CONDITIONING – WHAT ABOUT HOT WATER ?

A disruptive Melbourne University report shows that it’s cheaper to run a reverse-cycle air conditioner than running gas heating systems. This stems from the rapid decline in gas consumption as people switch off their gas appliances in appreciation of their electric substitutes – saving hundreds of dollars a year in the process.

With the massive export of gas from some states now reaping positive benefits economically, instead of expected gas shortages we’ve seen the escalation of Australian gas prices upwards from 15% as export demand has brought a bounty to the demand of LNG from $2.50 to $8 per Giga Joule. And it‘s set to rise even further as due to export demand for LNG, “Household gas prices will soon surge by 30 per cent, according to new research by ANZ.”

According to the report, Australia’s peak demand for gas was in 2012, and since then it’s been in decline. An ABC report stated:

“Modelling by the Melbourne Energy Institute has estimated that by 2025, gas consumption in Australia could fall to half the peak use of gas recorded in 2012.”

Can Electricity Be A Cost Effective Option For Water Heating Too ?

Tips for avoiding gas price hikes have been around for over 12 months now, attempting to identify “ways to use energy more efficiently“. The recent Melbourne Uni report instructs: “Do try this at home: fuel-switching from gas to electricity.”

“As an example, during two particularly blustery days I found I could comfortably heat my house one day with gas at an energy-only cost of A$4.80 and then do it the next day with my air conditioner at a cost of just A$1.50“

It sounds almost prophetic that the Melbourne Uni report is predicting that “this coming “second-era of Australian home electrification” will have a big impact on gas and electricity supply-demand dynamics over the next decade.”

The question I ask is: “can we heat water more cost effectively with electricity than with gas or traditional electric storage tanks ?”

I assume that where gas has been used for air conditioning (heating) then it’s also likely to be used for heating water also. If this is the case then the financial penalty imposed on gas usage will also affect the way water is heated for showers unless people are prepared to put up with the rising costs.

Isn’t the use of electricity bad for the environment ? Isn’t gas the ‘green alternative’ pill that we need to swallow, if we don’t want to take up solar solutions ? Apparently not, since economics are now involved.

The ABS records that “Just over half of Australian households used electricity for their hot water system (56%), over one third used mains gas (38%) and 10% of households used solar hot water systems.”

Around 50% of homes in Victoria and Western Australia are using mains gas, and according to the research people are voting with their wallet and moving back to electricity to save money.

If people are fleeing the gas market en-masse to embrace electricity for efficient room heating, is there an efficient water heating product that can also drive down hot water costs ?

Introducing Instant Electric Tankless Hot Water Systems

Are we to continue paying higher prices for hot water with gas, or is there a better way ? We turn to technology to answer this question, and observe that the use of tankless instant electric hot water systems have been foundational in other parts of the world for many years – but are yet to make an impact in Australia. Until now.

Flash Hot Water Pty Ltd have partnered with Malaysian company Alpha-Electric to introduce the Alpha range of instant water heaters into the domestic market. Alpha is no stranger to the hot water industry, a family operated company with over 300 staff that has been in operation for over 30 years.

“The science behind the technology is simple,” explains Mr Bruce Stanton, Director of Flash Hot Water. “Water is only heated at the time of use, and only as much as is needed for use.”

The principles of instant electric water heating are similar to instant gas heating, whereby the water is heated on demand. However the fundamental difference between them is that gas – just like solar and traditional storage hot water systems – are typically located with a storage tank in the centre of the house. This introduces long copper pipe runs that can mean a 2 minute wait for hot water delivery before it’s used, flushing valuable water down the drain. Instead, tankless instant electric hot water systems are placed inside or near where the hot water is required, only heating what is required at the time it’s required.

Calculating the cost of a traditional shower can be quite complex, as it depends on the type of system in use – which means comparing the cost of various types of water heating systems difficult. However calculations for tankless instant electric hot water systems are simple mathematics: time used for a shower times the cost of electricity. By way of example, using an Alpha X3EM (6 kW)  for a 10 minute shower in South Australia (the highest cost for electricity in Australia) calculates to be just 35 cents, plus water costs. Naturally if you’re using hot water for just 5 minutes instead of 10, then you’re under 20 cents for a shower. And that’s the worse case scenario in Australia – the other states have cheaper electricity prices.

The Construction Industry Is About To Change

Comments from the Melbourne Uni report stated:

• “There is now no economic need for any new house or suburb to be connected to the gas grid.”
• “Governments, housing developers and homeowners can now look for opportunities to cut spending on gas infrastructure.”

The answer to room heating is reverse cycle air conditioning, moving off the expensive gas grid.

The answer to water heating is tankless instant electric hot water systems, moving off the expensive gas grid.

But what about our traditional hot water storage systems ? Do we simply give them the flick ? I tend to get a warm fuzzy feeling to think that I’ve got 400 litres of fresh hot water sitting idly near my linen cupboard that I can use at any time of the day or night.

There are many reasons why people won’t simply dump their existing hot water storage systems, and according to government research people tend to only change their hot water systems when their existing systems crash – and then it’s an emergency! In such cases most people simply swap like-for-like and do not put much thought into more energy efficient water heaters.

The opportunity – as pointed out – is for the new home sector to embrace more cost efficient and energy efficient means of delivering hot water solutions. This is the ideal time that developers, new home owners and businesses have time to think about the types of hot water systems that are available on the market and to plan these in the design of the home infrastructure.

Renovation companies and Granny Flat construction companies are also on the lookout to embrace technology that delivers cost and space saving initiatives, as well as improving the carbon footprint for construction and ongoing emission calculations.

“The only way to reduce waste is to stop using so much!”, Mr Stanton said.