Sydney, Nov 14 (The Conversation) Your hot shower or bath uses 15-30% of your household's total energy, second only to the heating and cooling of air.

More than half of all Australian households rely on electric water heaters with a storage tank. These act like thermal batteries and often store more energy than a home battery. Traditionally, these heaters operated during off-peak hours overnight when power demand was low. This practice also helps maintain stability for coal power stations.

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But there's a better option: cheap heating at daytime. More than 40% of freestanding Australian houses now have solar. Switching water heaters to charge during the day can soak up solar power going to waste – known as curtailment – and make sure electricity supply and demand match.

In our new real world trial, we put this technique to the test and found it works.

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From propping up coal to soaking up solar

Electric water heaters have traditionally be set to operate off-peak. On your electricity bill, it would be listed as a “controlled load” item. Switching from night to day isn't as easy as flicking a switch. It's often hardwired.

The solution: use smart meters. Almost all Victorian households (99.6%) and most Tasmanian (79%) have smart meters, while other states sit around 35-40%, according to the Australian Energy Regulator. By 2030, every Australian household is projected to have one.

Smart meters can do more than just monitoring use – they can remotely control appliances such as electric water heaters.

Electricity retailers or distribution network operators could offer to change the times of hot water heating via smart meters. Consumers could approve this change and it could be done remotely.

For this to become a reality, the method has to be tested in trials like ours.

Why does this matter?

In October this year, rooftop solar met 18% of Australia's electricity demand.

One problem with the rooftop solar boom is matching supply with demand. Solar power peaks in the middle of the day but household demand is highest in the afternoon and evening, as people return from work and school.

When there's more solar power than a household can use, it returns to the grid. Scaled up, this creates new challenges, such as minimum network demand, where floods of cheap solar can destabilise the grid or overload its voltage, forcing authorities to temporarily stop or reduce households sending their solar power back to the grid. That's where heating water could help – by soaking up excess solar.

What did we learn?

To do real-world testing, we enrolled 18,000 South Australian households with smart meters and electric water heaters. The trial was funded by the Australian Renewable Energy Agency and led by metering company PLUS ES in collaboration with energy retailer AGL and the University of New South Wales.

Over the course of a year, the retailer shifted close to 50% of the water heating from night to day. Most householders reported no noticeable change to their hot water. Only 0.3% of households opted out. Participating households cut their emissions from water heaters by about 15%.

Energy retailers buy power at wholesale prices from generators. Nighttime power used to be cheapest. But daytime rates are falling as solar floods the grid. In the trial, the retailer's use of daytime power produced savings of A$63 per household. We would expect these savings to increase as more renewables enter the grid.

At present, these savings go to the retailer. But as cheap solar pushes out other forms of power, we are seeing this ripple through to cheaper daytime rates which should be offered by retailers to consumers. This will allow households to take direct advantage of savings.

DIY water heating has a cost for the grid

At present, most people can't directly use rooftop solar to heat water. Solar and hot water are generally installed on different circuits, even in households with smart meters.

But about 25% of Australian households have already taken matters into their own hands and opted out of controlled load circuits so they could use rooftop solar to heat water.

This appeals to some consumers, as it can significantly cut their water heating bill, but the extra cost of installing timers or diverters may put others off. Some diverters can also worsen the quality of the power on the grid.

By contrast, if the smart meter method gains traction, retailers and energy authorities would be better able to manage the grid as more renewables enter.

What's in it for consumers? If retailers pass on savings from cheaper wholesale rates, households would be more likely to take the automated smart-meter control option.

Rooftop solar can lead to household voltage increasing slightly, which makes it harder to export solar and can reduce the lifespan of some appliances. That's because household inverters need to push voltages higher than the grid to be able to push solar onto the network.

But if water heaters run during the day, they soak up more of the output from rooftop solar and keep voltages lower. Voltage levels in trial households dropped by an average of 2.6V, or up to 3.4V for homes regularly experiencing high voltages.

The trial also showed water heating demand could be predicted very accurately, benefiting network operators in day-ahead planning and operations.

What's next?

Now that we have real-world evidence this method works, authorities can think bigger.

If smart meters were taken up across Australia's main grid, the National Electricity Market, we could shift 3.8 terawatt hours of electricity use from night to day. That would represent 1.4% of our current electricity consumption of 273 TWh.

At present, about 2.3 TWh worth of utility-scale solar is curtailed annually. Far better to use it to heat water at daytime.

Would this approach work for heat pumps? Yes, with caveats. Heat pumps use electricity to heat water much more efficiently than older heaters. They do, however, require longer heating times. Our trial suggests heat pumps are largely compatible with smart meter control, but they may need different control strategies.

As ever more renewables enter the grid and more Australian households go electric, many of us will ditch gas hot water systems. These trends mean heating water during the day will be even more valuable. (The Conversation)

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