Are Electric Water Heaters Expensive To Run?

Are you tired of your ever-increasing energy bills? Are you considering switching to a more energy-efficient water heating system but are still determining if it's worth the investment?

In Australia, where the cost of living can be high, it's essential to find ways to save money wherever possible. One area that's often a significant contributor to your energy bills is your water heating system.

In this blog post, we'll dive into the world of electric water heaters and explore whether they are expensive to run in the Australian market. By the end, you'll have a clearer picture of how your choice of hot water system can impact your budget.

Understanding Electric Water Heaters

Before we delve into the cost aspects, let's start by understanding how electric water heaters work. Electric water heaters are one of the most common water heaters in Australian households. They use electricity to heat water in a tank, which is stored until needed. When you turn on your hot water tap, the preheated water from the tank is delivered to you.

Initial Costs Linked With Electric Hot Water Heaters

To understand how expensive it is to run a gas water heater or electric hot water heater, it is essential to understand all the costs you incur to operate. This will help you get an average amount you will incur. Here are the costs involved.

Buying the heater

The first cost you will incur is the cost of buying the system. The heater's price will be based on the type and where you buy it. So, when shopping, it is necessary to compare different suppliers to determine the one offering the system at the most affordable price. A tank water heater will also cost you less than a tankless system.

Installation costs

Consider the installation costs of placing your hot water system inside your space. The installation costs depend on the company you hire to do the installation job. Some companies will charge more than others, so comparing to get the most affordable is always good.

A tank water heater is the easiest and least costly to install. All that is needed is to have the unit connected to a water source and then into your electrical system. A tankless hot water system is more expensive to install, and the process is more complex than a tank heater.

Cost by brand

Many reputable brands in Australia manufacture electrical water heaters. Some brands manufacture tankless and tank heaters, while others specialise in one type. Based on the brand, the system's price will differ depending on the features and other aspects.‍

Note: It's essential to remember that the upfront price is just one part of the equation when evaluating the expense of running an electric water heater.

Running Costs of an Electric Heater

Now, let's get to the heart of the matter – are electric water heaters expensive to run? The answer significantly depends on several factors, including your usage habits, the energy efficiency of your unit, and electricity rates in your area.

Calculating operating costs

To get a more accurate estimate of how expensive it is to run an electric water heater, consider using an online calculator provided by your local utility company. These tools consider your specific water heater model, electricity rates, and usage habits. By entering this data, you can get a personalised estimate of your annual operating costs.

• Usage Habits: Your hot water usage plays a significant role in determining the running costs. If you have a large family that frequently uses hot water for showers, laundry, and dishes, your electric water heater will have to work harder and use more electricity. On the other hand, if you're a single person or a couple, your usage will be lower, resulting in reduced operating costs.
• Energy Efficiency: Newer electric water heaters are designed to be more energy-efficient. When you're in the market for an electric water heater, look for models with a high Energy Star rating. These units are better insulated and equipped with features that minimise heat loss, ultimately reducing energy consumption and operating costs.
• Electricity Rates: Electricity rates vary across Australia, so checking the rates in your specific area is essential. Some regions have more competitive electricity pricing, while others may have higher tariffs. These rates can significantly impact the cost of running an electric water heater.

Note: Running an electric heater is more costly than a gas water heater because the cost of electricity is higher than that of gas. The amount you pay will depend on your local electricity rates, meaning that the higher the rate per kWh in your area, the more you will incur to run your heater.

Maintenance costs

For your system to run efficiently, ensure it is serviced regularly. Regular maintenance will cost you depending on the type of service. In case of a major service, you will incur more than other minor services.

Other Factors Determining Electric Heater Running Costs

The costs you incur running an electric heater are also determined by several other factors. Here are some of these factors:

Tank size

The tank size will determine the amount you incur to run the water heater. A tank water heater holds water in the storage tank and uses electric energy to keep it hot. So, with a large tank, you can expect that the running cost of your electric heater will be higher than with a smaller tank.

This is also a significant reason you should make sure that you choose a heater with the right sized tank to ensure that you don't get an oversized tank that will lead to heating of water you don't need. A tankless system is not affected because water is heated when required.

Peak and off-peak electricity rates

In Australia, electricity providers often offer peak and off-peak pricing. Peak rates are higher during times of high demand, such as in the evening, while off-peak rates are lower during less busy periods, like overnight.

Some electric water heaters can be programmed to operate during off-peak hours, taking advantage of the lower rates. This can result in substantial cost savings on your energy bills.

Energy efficiency

When evaluating the efficiency of electric water heaters, one term to keep in mind is the Energy Factor (EF). The EF measures how efficiently a water heater converts energy into hot water. A higher EF signifies a more energy-efficient unit. You can decrease your operating costs by choosing a water heater with a high EF.

Reduce Your Electric Water Heater Running Costs

If your electric hot water costs you more to run, you can reduce these costs in several ways. You should check how you are using it and if you have done the proper maintenance before applying other cost-saving tips. Here are some of the tips you can apply.

Lower the thermostat

Most of the electric water heaters feature a thermostat set at 60°C (140°F.) However, you will still be comfortable if it is set at 48.8°C (120°F.) So, you can adjust and lower the temperature, and you are unlikely to notice any difference in the water temperature. This will reduce the running costs and lower the risks of scalding, mineral accumulation and corrosion of the pipes and heater.

Tank insulation

Insulating your electric heater storage tank helps in reducing heat loss and prevents it from turning on frequently. As you do the insulation, you should ensure you don't cover the burner and the thermostat. The insulation job is better left to a professional plumber to do.

Installing heat traps

Heat traps let cold water flow out into the tank but prevent unwanted convection and heated water from flowing from the system. Most of the contemporary heaters are made with inbuilt heat traps. However, if your electric system doesn't feature the heat trap, you should ask your plumber to help install it.

Repair leaks

Dripping may seem like a minor issue, but it can cause massive water wastage and money within a short period. So, ensure you repair any leak instantly to avoid water wastage and save on your water bills.

Drain the tank annually

You should also drain your electric heater tanks annually to remove sediments that can reduce the system's heating efficiency. Though this is a simple procedure, you should follow the manufacturer's guidelines or call a professional plumber to help.

Installing a timer

A conventional electric water heater runs continuously, leading to unnecessary electricity use. To avoid this problem, you can install a timer to help conserve energy and increase its durability.

Insulate the pipes

Besides insulating the tank, you can also insulate the first six feet of both the cold and water pipes connected to your system. This helps control fire hazards and conserves heat so that the water heater does not work hard to reheat the water.

Replace your old water heater

An old system is likely going to consume more electricity, which will lead to high running costs. If your electric water heater is over fifteen years old, you should consider replacing it with a new, more energy-efficient one.

The Role of Renewable Energy

In recent years, there has been a growing emphasis on sustainable energy solutions in Australia. Many homeowners now consider solar panels to offset their electricity usage, including running electric water heaters.

You can significantly reduce your water heater's operating costs and environmental impact by harnessing the sun's power. Solar-powered systems use energy from the sun to preheat water before it enters your heater.

This means your electric heater has to work less, resulting in lower operating costs. Additionally, excess energy generated by your solar panels can be stored or sold at a set price back to the grid, further reducing your electricity expenses.

Government Rebates and Incentives

The Australian and various state governments offer incentives and rebates for homeowners who invest in energy-efficient appliances, including water heaters. These incentives can offset the initial cost of purchasing a more energy-efficient electric water heater. It's worth checking the current programs available in your area to see if you qualify for any financial assistance.

Hire Experts for Your Electric Water Heater Needs

So, when it comes to keeping your water hot without breaking the bank, what's the verdict on electric water heaters in Australia? The answer? Well, it's a mixed bag, but it's one you can control.

Consider your usage habits, pick an energy-efficient model, and take advantage of off-peak rates. Don't forget the sun – solar panels can be your budget's best friend. However, here's a final nugget of wisdom: don't hesitate to seek expert advice.

Professionals can offer tailored solutions that perfectly fit your household and location. So, when it comes to keeping the hot water flowing and your budget in check, expert help can make all the difference.