By Bryan Wall
Product Test Journalist | Kaipūrongo Whakamātautau Hautaonga
Meridian, Powershop, Octopus Energy and Electric Kiwi all say their smart hot water programmes mean lower power bills for eligible customers. Here’s how they work.
What is smart hot water?
Smart hot water programmes allow your power company to turn off the power supply to your hot water cylinder during peak times (usually mornings and evenings). They say you shouldn’t notice any difference to your hot water supply – there should be enough hot water stored in the cylinder to last you during those times.
Customers who are eligible for Meridian’s Smart Hot Water and Powershop’s Hot Water Hero can get a $10/month credit for agreeing to be part of the programme.
Octopus Energy’s Hot Water Control and Electric Kiwi’s Hot Water Automation don’t have a fixed reward for customers, but both companies say your power bill will be noticeably lower because hot water heating will be shifted to cheaper off-peak times. Octopus says savings could be up to $150 a year, and Electric Kiwi says customers in its initial trial saved an average of $14.54 a month.
Electric Kiwi is unique in that it allows customers to have more control over when their hot water is off, using their app or online.
What’s in it for the power companies?
Peak periods are when demand is highest and electricity is most expensive for retailers to buy on the wholesale market. By shifting usage away from these times, the power companies will save money.
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What is the downside for customers?
While the power companies say it’s unlikely you’ll run out of hot water, they don’t make any guarantees. You may notice a difference if you’re a heavy user during peak times.
Am I eligible for smart hot water?
To be eligible, you need:
an electric hot water cylinder
a smart meter
to live in an area where your provider offers the service.
Is this the same as ripple control?
No. The principle is similar, but ripple control (which has existed in New Zealand for decades) is carried out by lines companies to reduce pressure on the grid, whereas smart hot water allows power companies to reduce the amount of electricity they have to buy during peak times.
Is this the same as a time-of-use plan?
No. With time-of-use plans, you pay a lower rate for electricity you use during off-peak hours. These plans can save you significant money, but only if you’re able to shift your usage to off-peak times. Smart hot water, on the other hand, shouldn’t require any behaviour change – the power companies say you can continue to use hot water normally.
Although they’re different things, smart hot water and time-of-use plans can complement each other. If you’re on a time-of-use plan, smart hot water will further reduce your electricity usage during peak hours.
I’m not eligible for smart hot water. Is there anything I can do?
If you’re on a time-of-use plan, you could get an electrician to install a hot water cylinder timer, giving you control over when you heat your water. Bluetooth- and WiFi-connected timers are also available, which allow you to control the schedule from a smartphone app.
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