Some New Zealand homes may already have the technology needed for substantial electricity-bill savings. The opportunity lies in changing when their water heats up.

Here's what to know

The savings don't require households to go without hot water: smart controls instead move cylinder heating into cheaper overnight hours.

Newer hot water cylinders may come with built-in controls, but existing cylinders can be fitted with a separate device, Powerswitch head Paul Fuge told RNZ. A smart meter connection offers another route to the technology through some electricity providers.

Restricting cylinder heating to lower-cost periods is an option for households with these controls and a time-of-use electricity plan. Hot water accounts for about 30% of household electricity costs, according to Fuge.

Since the 1950s, New Zealand has used "ripple control," which lets network operators curb demand from water heaters to keep power lines from becoming overloaded. Participating households can receive lower controlled-load tariffs.

Solar panels may not offer the greatest financial benefit for some large households that use plenty of hot water, according to Fuge. He recommended combining an efficient heat pump water heater, another bill-cutting option, with controls that target cheaper electricity.

More background

Smart meter provider Bluecurrent reported that on Aug. 7, 100,000 hot water cylinders linked to smart meters moved 81.2 megawatt-hours of demand out of the evening peak period. The company estimated wholesale electricity savings of between $77,000 and $100,000.

Despite that potential, Bluecurrent's survey found that the technology was unfamiliar to 85% of respondents. Most said they were open to additional hot water control but wanted evidence of financial benefits before signing up. Nearly one in five also cited a more sustainable energy system as a motivation.

Gareth Gretton, the Energy Efficiency & Conservation Authority's research, evaluation and insights lead adviser, said household water heating accounts for roughly 10% of New Zealand's electricity use.

Smart controls could turn cylinders on when wind and solar generation are abundant, storing the hot water for later use.

What can be done?

Cala offers configurable smart heat pump water heaters, bringing scheduling into the appliance itself. The approach behind Cala fits the opportunity Fuge described: coordinating an efficient heater with lower-cost electricity periods.

Fuge added that some controls let homes with solar panels put excess generation into water heating instead of exporting it at a lower rate.

Bluecurrent chief customer officer Matt Bostwick pointed to opportunities for homeowners and renters alike.

"Some 1.4 million to 1.8 million homes today have a hot water cylinder, and it doesn't matter whether you're the homeowner or a renter, you still get the opportunity to participate in that, because the key element — the hot water cylinder — is already there," Bostwick said. "We just have to get them connected and activated and turned on."

Where can I learn more?

Heating hot water when electricity is cheaper is drawing interest beyond New Zealand, too. 

• In France, a startup said existing water heaters can bank cheap power without tank replacement.

• In the U.K., a homeowner turned a £300 eBay cylinder into thermal storage.

• A homeowner considered a 500-liter attic tank to store water heated on cheap rates.

• In the U.K., a renter was warned about costly 24/7 heating with electric immersion heaters.

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