Water Heating & Efficiency: How to Reduce Costs and Save Energy

Water heating is one of the biggest contributors to energy consumption in Australian households, often accounting for up to 25% of your total energy use. With rising energy costs, improving the efficiency of your water heating system can significantly reduce your power bills while helping the environment.

This guide will explain how different water heating systems work, provide practical tips for improving efficiency, and offer insights into choosing the most energy-efficient options for your home.


Types of Water Heaters

Before diving into efficiency tips, it’s essential to understand the types of water heaters available:

  1. Electric Storage Water Heaters
    These systems heat water in a tank and store it until needed. While common, they can be energy-intensive, especially if used during peak times. Larger tanks also lose heat over time, increasing energy use.
  2. Gas Storage Water Heaters
    Gas heaters warm water faster than electric ones, making them more energy-efficient for high-demand households. However, they still suffer from standby heat loss and are reliant on access to natural gas.
  3. Instantaneous (Tankless) Water Heaters
    These systems heat water on demand rather than storing it in a tank. Instantaneous water heaters can be powered by gas or electricity and are generally more energy-efficient because they eliminate standby heat loss.
  4. Heat Pump Water Heaters
    Heat pumps work like a reverse air conditioner, using the surrounding air to heat water. Although they have a higher upfront cost, they can be up to three times more energy-efficient than conventional electric heaters.
  5. Solar Water Heaters
    Solar water heaters harness the sun’s energy to heat your water. They are the most energy-efficient option, especially in Australia’s sunny climate. Though expensive initially, they offer significant long-term savings and reduce your reliance on the grid.

6 Water Heating Efficiency Tips

No matter what system you use, there are several ways to improve its efficiency and save on energy costs:

1. Set the Right Temperature

Many water heaters are set too high by default. For most households, 60°C for storage systems or 50°C for instantaneous heaters is sufficient. Lowering the temperature prevents overheating and saves energy while reducing the risk of scalding.

2. Install a Timer or Use Off-Peak Power

If you have an electric storage water heater, consider installing a timer to heat water only when needed. Running your heater during off-peak hours (often at night) can lead to significant savings on your electricity bill.

3. Insulate Your Tank and Pipes

Water tanks and pipes lose heat as the water sits or travels through the system. Insulating your storage tank and the first few metres of your hot water pipes can minimise this heat loss, meaning your system won’t have to work as hard to reheat the water.

4. Use Water-Efficient Fixtures

Switching to low-flow showerheads and faucets can dramatically reduce the amount of hot water your household uses, without compromising comfort. These devices limit the flow of water while maintaining pressure, so you use less energy to heat water.

5. Fix Leaky Taps and Showerheads

A dripping tap or leaky showerhead can waste litres of hot water a day, costing you money and energy. Fixing leaks as soon as they occur will save water and reduce the load on your water heater.

6. Take Shorter Showers

Cutting down your shower time is a simple and effective way to reduce water heating energy. Each minute less in the shower saves both water and energy, translating to lower utility bills over time.


Upgrading to an Energy-Efficient Water Heater

If your water heater is old or inefficient, upgrading to a more energy-efficient model could drastically reduce your energy consumption and long-term costs. Here’s a look at some options to consider:

Solar Water Heaters

For the most energy-efficient solution, solar water heaters are unbeatable. These systems use the sun to heat water, dramatically cutting down on electricity or gas usage. Although the upfront cost is higher, many Australian states offer rebates or incentives for solar installations, making it more affordable.

Heat Pump Water Heaters

If solar isn’t viable, heat pump water heaters are another excellent option. They use about 70% less energy than conventional electric systems, and while they do come with higher initial costs, they offer substantial long-term savings.

Instantaneous Water Heaters

For smaller households or those with variable water needs, an instantaneous water heater may be the best choice. Since these systems heat water only when needed, they eliminate the energy waste associated with storing hot water.


Consider a Professional Water Heating Audit

If you’re unsure whether your system is running efficiently, a professional water heating audit can identify inefficiencies and provide tailored advice. They can recommend whether upgrading your system or making smaller adjustments (like insulation) will be more beneficial for your home.


Final Thoughts

Water heating is a significant contributor to your household’s energy consumption, but with the right strategies, you can reduce both your energy usage and costs. By making small changes, such as adjusting the temperature and insulating pipes, or opting for a more energy-efficient water heater like solar or heat pump systems, you can enjoy hot water while saving money and energy.

To get the most out of your efforts, consider your household’s specific needs and the best system for your climate and budget. Interested in a more efficient water heating system? Speak to a professional to assess your options and start saving today!

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