Earlier this week I asked Chat GPT to run the numbers and tell me how much power would be required to heat my 300L hot water cylinder if it was empty, it’s calculations were wrong but that got me to thinking what the best ROI (return on investment) would be in regards to smart home automation. Often when building a new home you want to upgrade everything but your budget can only stretch so far so you always have to run the numbers and see just where to spend the money. In an ideal world every house would be Passive House Plus certified where the energy requirements for the house are so low that the small solar array on the roof feeds power back to the grid. But unfortunately most people overlook upgrading the energy efficient aspects of their new houses even if it will save them money in the long run. So what is the best ROI?
Quite a few years ago I set off on the journey to design and build an energy efficient smart home and I’d like to think I have succeeded on the brief. I designed the house with passive solar and passive house principles but I didn’t quite have the budget to go full certified passive house. Thankfully it is warm in winter and cool in summer. I decided against getting solar panels for a few reasons I’ll cover in future articles but my energy bill is much lower than most people in a similar size house with 4 people living in it. But by far the best investment in my house was upgrading the hot water cylinder and the smart switches to go with it. A standard 300L hot water cylinder will normally come with 1x 3kW electric element in it, so from cold it could take up to 7 hours to fully heat the cylinder from 15c to 75c.
Yes you could spend more on your hot water cylinder and upgrade to a heat pump hot water cylinder that will give you 3–4x cheaper hot water heating and I explained all this in last week’s article you can find here. Doing this would have a payback period of about 5 years or less but I have an even better ROI upgrade path for everyone to consider.
So we saw above that it can take up to 7 hours to heat a 300L hot water cylinder if you have a single 3kW element in it, guess what it heats twice as fast if you have a second element in your hot water cylinder and that is exactly what I did with my hot water system. Sure you may be saying “but Jim you are still using the same amount of electricity you big dummy” and you would be correct but I am also able to have free power from my electricity provider for a short amount of time. I’m with Contact Energy for power and I get 3 hours of free power every day from 9pm to midnight and guess what, all of my hot water is FREE!!!!
That’s right, I have smart timers on my hot water cylinder and both of my electric elements turn on at 9pm to recharge my hot water cylinder. It is difficult for my family of four to fully use all 300L of hot water if they just have showers so the savings are immense. It’s estimated that 30% of electricity usage in most homes is used for hot water heating, what if that was zero.
So what was the pay off period? Normally, upgrading to get a second element might set you back about $200 more and the smart switches are less than $50 each. I got the fancy WiFi switches that have a temperature probe that goes into the hot water cylinder so I can set smart rules so I never run out of hot water. The ROI payback period is only a few months because I can save up to $4.90 per day on hot water and that can add up to over $1,500 of savings every year on domestic hot water. I’d highly recommend looking at switching to Contact Energy with their “Good Nights” plan and putting your power hungry devices on smart timers. I’m saving over 50% on my electricity because of this 3 hours of free power.
So this is easily the best investment you can make in any new house. For less than $300 you basically have free showers for ever, or at least until the energy provider stops giving away 3 hours of free electricity. Even if you’re stuck with 1 element you can retrofit the timers so you could at least get half price hot water. Normally the ROI on solar panel installations is calculated in decades, the ROI on a heat pump hot water system is around half a decade but with this little hack the ROI is only a few months.
My power bill is less than half the average Kiwi’s power bill and a lot of that savings comes down to this one simple hack. In fact I’m waiting on BRANZ to come and install monitoring equipment in my home because my house has been selected for the HEEP2 house audit but my electrical layout is a bit too advanced for their current monitoring equipment. So I’m waiting for them to upgrade their equipment to be able to have my house included in their data set.
So if you are building a new house or even just swapping out an old hot water cylinder why wouldn’t you spend the extra $300 to save massive amounts of money every year?
Don’t forget if you want both of us to get a $100 credit please use this link
UPDATE:
It didn’t take long to get into the habit of setting the timer on the dishwasher, dryer, and washing machine. Our average savings keep going up, we are mostly in the 60%+ range now.
The house doesn’t have a fireplace, gas or solar of any kind. We have a 4 bedroom 250m2 house that is set to 21 degrees and it’s not uncommon for family members to take long showers.
