Heat pumps and solar panels - a smart choice?

By Nigel Parry

Combining heat pump water heating and solar panels can work wonders on your power bills if you play it right.

Heat pump water heating can be extremely efficient. Photo / Getty Images
Heat pump water heating can be extremely efficient. Photo / Getty Images

The air behind your fridge probably feels warm. Refrigerant, driven by a compressor through carefully designed pipework, is extracting heat from the food inside to keep it cool, dissipating the energy outside.

Heat pump water heating (HPWH) uses a similar principle in reverse to take heat from the outside air and raise the temperature in your hot water cylinder to a regulation, legionella-preventing 60°C.

Although they represent a significant investment, with units costing upwards of $4000 before installation, HPWHs can be extremely efficient; running their compressor, fan and pump uses substantially less electricity than conventional electric water heating.

These savings can mount up, as BRANZ figures suggest that a typical New Zealand household uses around 34 per cent of its electricity just to heat water.

HPWHs also score over solar water heating by working efficiently day and night, summer and winter. The best are able to deliver hot water with a third of the electricity of conventional heating when temperatures are down to 0°C.

There are several flavours. Multi-pass HPWH raises the temperature of your water a few degrees at a time and slowly heats a tank. Single pass versions take the temperature all the way up to 60°C in one go and deliver hot water at the top of the tank ready to use.

Some are all-in-one outdoor units, with compressor/heat exchanger and tank. Split systems transfer the outside heat to the tank indoors and can even use your existing hot water cylinder if it isn't too old.

It pays to do your research, as systems vary in price and efficiency and the best choice depends on your household hot water needs and patterns of use. If your dishwasher and washing machine use domestic hot water rather than their internal heating elements, you get more advantage from the HPWH efficiency.

For smaller households payback is slow, while for larger families, for example with young children or teenagers, annual savings are typically 25-30 per cent of the overall cost. Payback can be as little as two years for large users.

With Statistics NZ figures pointing to three quarters of the country's domestic water heated by conventional tanks, there is a ready market and a number of providers.

And since you are not using your energy-hungry water heating element switched on and off by a thermostat, does it make sense to go the next step and marry lower energy HPWH to rooftop solar photovoltaics (PV)?

Again it depends and careful calculations for your own household are key, especially as electricity prices can change, and the money earned by exporting electricity to the grid varies with no long-term guarantees.

One of the main considerations is the timing of your electricity use. If your lifestyle demands electricity through the day when your PV system is generating, or you can set your dishwasher and washing machine on timers, then you are saving electricity at retail prices.

It's what's referred to as 'energy balance'. Less electricity used and a more even demand help achieve this.

With HPWH you can run the compressor during the day when the sun is shining. This maximises the efficiency of the heat pump due to the warmer air temperatures, and ensures the electricity used is 'free', with 100 per cent of it coming from the PV system. This can lead to a smaller PV system for your house and the excess electricity you generate can be small enough to attract a generous price (currently 25c/kWh from Meridian for the first 5kWh per day), rather than the much lower wholesale rate for larger producers.

It can also pay when PV generation is restricted, for example by a small suitable roof area.

Back of a postcard calculations show that payback of a combined HPWH and 3kW PV system costing $15,000 to install could be around eight years, shaving over $1800 per year off a heavy electricity user's bill. That assumes 25c/kWh to buy or sell, 10,000kWh used per year before the installation and the EECA generic figures for PV generation.

PV or HPWH could deliver annual savings on their own. Combined, households need to work smarter to get the most 'bang for your buck' by matching the timing of energy generation and use as much as possible.

Do your homework

• EECA hot water savings calculator: energywise.govt.nz/tools/water-heating
• Consumer NZ report on HPWH: consumer.org.nz/reports/heat-pump-water-heaters
• Consumer NZ report on grid-tied PV: consumer.org.nz/reports/grid-tied-pv-systems

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