Research reveals ways to save $1000-plus on your annual power bill - but low awareness

The EECA wants households to move away from gas hobs to avoid higher power costs or "locking in" higher emissions. However, its survey found most were considering electric induction cooktops because they saw them as safer and easier to clean. Photo / Getty Images

Electrifying your household appliances - which in most cases means ditching a gas cooktop, gas heating and regular hot water heating - can save the average household more than $1000 per year, according to data modelling recently commissioned by the Energy Efficiency Conservation Authority.

The study also found annual running cost and lifetime-cost gains from solar and swapping out a petrol or diesel vehicle for an electric vehicle (EV).

That’s if you use cheaper charging at home rather than pricey public chargers, even allowing for impending road user charges.

But a new study backed by the Energy Efficiency Conservation Authority (EECA) of 1442 households, carried out by TRA last November, has revealed low awareness of the benefits of electrification and of power plans with low or no charges for off-peak power.

It also revealed the creaky state of our home appliances and vehicles - and that around two-thirds of electric car owners are yet to buy a smart charger that’s faster and will let them time an off-peak top-up that’s cheaper, and easier on the grid.

Some of the key findings:

• Cost- and energy-efficient heat pumps are now a mainstay in New Zealand owner-occupier homes. Some 70 per cent have one - and for more than half (56 per cent) it’s their main source of heat.
• Only 3 per cent of New Zealand households have a hot water heat pump (aka a heat pump water heater) - a relatively new but highly efficient technology on the market - due to low awareness. A hot water cylinder typically accounts for a third of a home’s power bill. The EECA says a hot water heat pump will use 60 to 75 per cent less electricity. The downside is higher installation and upfront costs, which can run to $2500 or $5000 or more, which is two and a half to five times the cost of a conventional hot water cylinder. The EECA also notes: “Because they operate a fan to circulate air and a compressor, hot water heat pumps can make more noise than other methods of hot water heating. Given this, these components tend be located outside of the home, or in locations that will minimise the impact of noise. (However, this reporter can relay from personal experience that the noise of an outside unit can annoy the neighbours).
• Nearly two-thirds of New Zealanders already use an electric cooktop, but the stock of gas cooktops was found to be newer than electric cooktops.
• 36 per cent of household appliances are over a decade old.
• The average vehicle age is 14.9 years.
• Less than a third of homeowners knew that 80-85 per cent of New Zealand’s electricity supply comes from renewable sources.
• 7 per cent of New Zealand homes have solar (compared to 27 per cent in Australia), while 2 per cent have solar plus a battery for storing solar power to use at off-peak times.
• Purchase-cost qualms (82 per cent) were a much bigger factor with solar than other appliances. A solar tile and battery installation can be at the thick end of $20,000 for an average home.
• 54 per cent of homes are electricity-only; 24 per cent use bottled gas and 22 per cent use piped gas (which EECA adviser Dr Gareth Gretton says is significantly cheaper than bottled gas, even if the latter is cheaper and easier to install).
• Just under two-thirds of respondents were aware of plans that offered cheap or free electricity at certain times of the day, but only three out of 10 households were on such a plan.
• Of households on an off-peak power plan, only 35 per cent often took advantage of certain times of the day when there are low or no charges.
• More than one-third (36 per cent) of existing BEV (battery-electric vehicle) and plug-in hybrid owners are likely to buy a smart charger. These are a relatively new technology in the New Zealand market, where there are now close to 75,000 EVs, albeit with a recent stall.

The EECA has so far focused its charger subsidies on co-funding for public networks, such as ChargeNet.

Some of the smart-charger makers have questioned if that should be the sole focus, given most charging happens at home and subsidising smart chargers in garages would have key benefits for managing the load on the national grid.

Gretton said a surge in EVs could easily be accommodated by the country’s existing power infrastructure if electric car owners were charging at 2am. A smart charger is not only faster but allows for charging to be pre-set for cheap or no-cost off-peak times.

A report released last month, based on EECA-funded data-modelling and EECA input, found a median-priced EV still cheaper to own than a median-priced petrol car, even after the abolition of the clean car discount and the introduction of road user charges for electric vehicles - if charging is done at home (or “grid-charged” rather than a public fast charger).

Vector has also experimented with a more advanced system - using smart chargers from local contender Evnex (which sell from $2395 installed) that lets a power company connect to the devices and juggle the times when charging takes place. Vector chief executive Simon McKenzie noted this would be good to avoid the scenario of an EV owner plugging in as they arrive home about 6pm - the natural time after their commute, and necessary if they need every possible hour for a trickle charge from a standard wall outlet - but the worst possible time for the grid.

The EECA’s Gretton sees major benefits from a smart charger in every garage, and similar tech for other home appliances.

“In the near future, when a ‘demand flexibility’ service is introduced in New Zealand, smart tech will be able to react to signals from the electricity grid and reduce their consumption or turn off when electricity is expensive and ramp up or turn back on when costs reduce,” he told the Herald.

“In the example raised on smart charging, the start of any charging period could be randomised by anywhere up to 10 minutes, so that not all chargers turn on at the same moment. But importantly, ensuring consumers are able to opt out of this at any time by overriding the ‘smart’ settings and choosing to charge immediately, if needed.”

But any extension of subsidies to home charger installs will be a matter for our lawmakers. Transport Minister Simeon Brown, who promised co-funding for 10,000 public chargers by 2030 on the campaign trail, has yet to reveal details of his strategy in office.

If you’re looking for a cheaper power plan, the Electricity Authority-funded Powerswitch website has been upgraded to address several criticisms, including not giving enough play to off-peak power plans (it now also includes plans that bundle broadband).

The Herald found the upgraded Powerswitch a lot easier to use overall, but there are still some issues. While off-peak perks are now highlighted, EV-specific perks are not. And in the case of this reporter, the names of a power retailer’s plans did not match those offered by a drop-down list on Powerswitch, necessitating a lengthy online chat session, then a phone call.

Overcoming the upfront-cost barrier

Cost of purchase is a big barrier. Most survey respondents would only consider an upgrade if an appliance failed or they were embarking on a new build.

Gretton said consumers should factor in that whole-of-life costs are also cheaper for electric appliances. The EECA-funded modelling released in March found $1500 or more in savings - even when the cost of 5.5 per cent finance was factored in.

And while power companies slashed sell-back-to-the-grid rates for solar homes during the 2013 wave of partial privatisations - from as high as 25 cents per kilowatt hour (kWh) to cuts as low as 7c per kWh - Gretton said rates were now starting to bounce back. A solar home could sell surplus power at up to 12c per KWh).

“A hot water heat pump is the appliance that make the difference... Like any new technology, we expect the cost to come down,” Gretton said.

But even today, an upgrade to a heat pump hot water system would yield lifetime savings for a household with three or more people.

Chris Keall is an Auckland-based member of the Herald’s business team. He joined the Herald in 2018 and is the technology editor and a senior business writer.