Smart hot water systems to deliver savings for consumers

The Australian Government is investing $2.72 million in a cutting-edge pilot project that will reduce the cost of energy supply for up to 20,000 managed hot water systems in South Australian homes.

The project will aim to shift hot water system operation, from night-time to the middle of the day – when cheap renewable energy is most abundant.

The Australian Renewable Energy Agency (ARENA) is backing the project that will have a total value of $5.4 million and deliver a potential controllable load of more than 48 MW.

If the project is successful, the technology could be rolled out across the nation to about 3 million customers with electric hot water systems on the National Electricity Market (NEM).

Assistant Minister for Climate Change and Energy Jenny McAllister said the project had huge potential and was another example of the Albanese Government investing in cost-of-living solutions for households.

“This project is supporting home-grown innovation that could revolutionise hot water systems, saving on bills for millions of Australian households,” Senator McAllister said.

“The use of smart meters for hot water systems is set to deliver savings to Australian consumers and take greater advantage of our abundant renewable energy. It will mean your hot water is heated during at cheapest time of day, and ready for your use whenever you need it.

“Projects like this one show what innovation and technology can do to assist in reduce the load in peak demand times, while also supporting households.

“This is another example of this government’s commitment to lower the cost of electricity for Australians and support the take-up of renewable energy, the cheapest form of energy.”

Electric hot water systems are a major part of residential power use and bills and making them smarter can lower costs.

The project will enable NSW company PLUS ES to develop a platform that will allow project partner AGL to control hot water loads using SA Power Networks’ ‘solar sponge’ time-of-use tariff that incentivises daytime usage of electricity.

It will allow AGL Energy to turn systems on and off depending on when rooftop solar generation is at its peak, taking advantage of discount rates in the electricity market.

The program is expected to be completed in late 2024.