Aug 17, 2023

Solar hot water sales hit record high as households look beyond PV for savings

June 7, 2023 by Sophie Vorrath Leave a Comment

There's a quiet achiever in the rush to solar and electric appliances that's being driven by the ongoing increase in energy costs for Australian households and businesses, and it's solar hot water.

Green Energy Markets reports that in the month of May – when there was a roughly 30 per cent jump in the number of rooftop solar systems installed under the federal incentive program – a total of 15,564 solar hot water (SHW) systems were also registered.

This is the highest monthly level of solar hot water systems ever installed under the Small-scale Renewable Energy Scheme (SRES), according to Green Energy Markets (GEM) and 48% above its prior 12-month average.

GEM says the boom in installations resulted in the creation of 387,000 small-scale technology certificates (STCs), the highest monthly creation under the SRES and 136% above its prior 12-month monthly average.

So what's going on?

GEM says the May numbers were largely driven by solar hot water system registrations in New South Wales, which surged to 7,200 – 268% above the state's 12-month average and significantly higher than May last year (385).

Why solar hot water installations have seen such a big uptick in NSW is unclear, but the state does offer its own incentives to upgrade home hot water systems to more efficient models.

NSW is also one of the east cost states facing a further 25% hike in wholesale power prices from the start of the new financial year, as inflated global fossil fuel prices continue to affect the Australian market.

The Australian Energy Regulator has flagged increases to default offers – price caps on what retailers can charge customers who don't take up special deals – of up to $435 a year in NSW. So any and all energy savings where consumers can get them will be welcome.

Victoria, too, has been making a large and consistent contribution to solar hot water installation figures, as you can see in the chart above.

Solar Victoria offers $1,000 rebates for households that switch out their gas hot water for either electric systems, or electric-backed solar hot water. The rebates no longer cover gas boosted solar hot water systems.

It will be interesting to see whether the rush to solar hot water systems lasts, however, in the rapidly emerging electrification landscape.

The strong message from electrify everything advocates is to install rooftop solar and alongside electric heat pump hot water systems, which can act like a battery for storing excess PV generation in the form of heat.

As Simon Roche from the University of Technology in Sydney writes here, an electric water heater with a 300-litre tank can store about as much energy as a second-generation Tesla Powerwall – at a fraction of the cost.

"Our research at the UTS Institute for Sustainable Futures has found Australians could use household electric water heaters to store as much energy as over 2 million home batteries of that kind.

"This could eventually save over $A6 billion a year on our energy bills while getting us closer to net-zero carbon emissions."

Sophie is editor of One Step Off The Grid and deputy editor of its sister site, Renew Economy. Sophie has been writing about clean energy for more than a decade.

Filed Under: Featured, News, Solar