Eco Investor July 2015

Editorial

Investing in Home Energy Efficiency

Over the past two years I've put in several big and fairly costly energy efficiency measures into our home and I'm now in a position to start evaluating how well they have worked and if they were good investments.

How well they have worked is clear - our family's annual gas usage has fallen a massive 94 per cent and our annual electricity usage has fallen a very useful 23 per cent. On the money side, our gas bills have fallen 66 per cent and our electricity bills have fallen by 15 per cent. Combined, our gas and electricity bills have fallen 32 per cent or one third of what we used to pay.

The annual saving to May this year was $832. That's good money that no one is going to argue about. I haven't added up the greenhouse gases saved but it's a lot as I switched our electricity to hydro power and our gas usage is now negligible. So what technologies did I use and how worthwhile are they from a pay back point of view?

The first big energy saving measure in July 2013 was changing our old 5-6 kW reverse cycle airconditioner for an inverter based air conditioner with the same output. At the time the Government's energy rating website put the Mitsubishi Heavy Industries model I bought as the most energy efficient in its class. There are now even better ones.

The aircon can get a big work out in some parts of winter and on some days in summer. But the savings were almost immediate. Although we had it for nine and a half months in the 2014 billing period, our electricity usage fell 1,094 kWh or nearly 18 per cent. Our annual electricity bill fell $235 or 13 per cent. I'm sure most if not all of that is the aircon.

The next big improvement was the replacement of our very old gas hot water system with an Apricus evacuated tube solar hot water system with electric boosting. I wrote about this at the time in the May 2014 Eco Investor.

The solar hot water system has done well and we are happy with it. The fall in our gas usage was immediate and vertical. The last full year of gas hot water was 2013 when we used 23,118 megajoules (MJ). 2015 is the first full year of solar hot water and our gas usage was a mere 1,335 MJ for cooking only. The plummet is 94 per cent. Yes, I am a little happy with that number.

Our annual gas bill has fallen by $613 from 2014 and by $558 from 2013. That's 72 and 66 per cent respectively.

The reason it has fallen less than our usage is the service charge. In 2015 we paid only $52 for gas and a huge $234 on the service charge. One of my upcoming improvements is to go off the gas grid entirely by switching to an induction cooktop. That will eliminate the service charge, improve the return on our investment in energy efficiency, eliminate our remaining greenhouse gas emissions, and make a future switch to rooftop solar more viable.

Do I feel any qualms about going off the gas grid? Sorry, big oligopolistic retailers with the same gas price, not one iota.

The other aspect of the solar hot water is the electric booster. I was concerned that it would use a lot of electricity and so I was pleasantly surprised when our electricity consumption went down instead of up. This was due partly to the new aircon and partly to the switch to LED lights in our house, which I wrote about in the July 2014 Eco Investor. The savings from both have been enough to offset the additional consumption by the electric booster. In that sense we are getting our hot water free from the sun and our electric boosted hot water free from the savings from the air con and LED lights.

Soon after I installed the system I had a timer put in to control the time the booster kicks in and a meter to measure how much electricity the booster uses. This shows that over 12 months the booster consumed 1,392 kWh for a total cost of $342. I'd expected about $200 so that was a fair way out.

It means we saved $281 on the cost of consumables by switching from gas to solar with electric boosting. It's not a big saving and it means the system has a long payback period.

But there are several things can be said about that.

I could have reduced the payback period a lot by opting for a much cheaper thermosiphon unit but the roof wasn't strong enough for the tank, and I could also have gone for a flat plate split system which was $1,500 cheaper than the evacuated tube system that I chose. So cheaper options and faster payback are possible.

I did make one mistake with the solar hot water system. In my research I was told it is best to install them at a high angle to maximize winter solar collection. But I have since found Bureau of Meteorology based data that says it is most efficient to instal them at the same angle as the latitude of their location. In Sydney that is 33.5 degrees but our collector is at 48 degrees. The report says the annual loss of efficiency is 3.9 per cent.

Now it's not quite that simple as each day the hot water has to get to 60 degrees C to kill Legionella. Much of the extra efficiency comes in summer when the water usually gets to 60 degrees without boosting. That's very hot and any more than that is only good for storage so some of the efficiency could be wasted. Also, the Bureau of Meteorology says that Sydney actually has less average cloud cover in winter and I don't know if that is part of the efficiency numbers given for the angle of inclination. Either way, the loss of efficiency due to the winter angle of my collector is likely not as high as 3.9 per cent but if may still be enough to make a difference. I may one day look into whether it is worthwhile to change it.

Another factor is that the only place we could put the collector means the collector starts to get a shadow at 2.30 in winter, so we lose half an hour in the all important 9am to 3pm period.

What I can say is that there is no substitute for a clear day and in winter when the sun is shining the water heats up quickly. But in winter it's not enough to reach 60 degrees and kill the Legionella.

I can still shorten the payback period for the solar hot water system by going off the gas grid and eliminating the hefty and now useless service charge. In this way, switching to solar is an expensive but necessary step in taking energy efficiency as far as possible.

This would change the numbers dramatically. As induction cooking is more energy efficient than gas, I would assume that cooking with induction will cost us no more than the $52 per year that we currently use.

That means we can lose our gas bill entirely and save the full $899 we paid in 2014 while increasing our electricity bill by around $394 - $342 for the booster and $52 for the induction cooktop. The saving is $505 per year. That is a good saving and induction cookers are inexpensive enough to reduce the otherwise long pay back period for the hot water system.

But the real, longer term benefit of going off the gas grid is that it would set up our house to maximize the benefit of a future rooftop solar PV and battery storage system.

The other big energy efficiency measure was replacing the glass in the four sliding doors and two window panes at the back of the house with Comfortplus glass to keep in the winter heat. I calculated this would keep that part of the house about 2 degrees warmer than it was with the old glass. The new glass keeps in more of the heat when the aircon is on, so perhaps the aircon gets used less, but overall I don't think it makes a huge difference to the energy consumption and bill. Its main role is to improve comfort, and as my wife spends a lot of time in that part of the house, it is as valuable if not more so for its role in marital harmony.

Something I regret is that we did an extension in 2010 and that would have been the best time to install double glazing in those doors and windows. Had I done so, our payback time would be dramatically reduced.

Likewise, if we had installed an electric cooktop during that renovation, switching to induction would now be easier and cheaper. But at the time gas was the more environmental choice.

In the two years I've been making the house more energy efficient, a couple of things have become clear to me. On the environmental side, we as consumers and businesses can reduce and eliminate our greenhouse gas emissions without having to wait for the government or the energy industry to take the lead. In fact, given the current political climate in Australia, it would be foolish to wait for them.

And on the financial side and the pay back period for investing in energy efficiency, it is important to take a whole of energy consumption point of view. Some technologies, like LED lights and air conditioners, are relatively cheap and can give a big and quick pay back. Others like solar hot water are more expensive and can take much longer to return their investment, but they are just as important to achieve the best outcome.

And with the rush of technologies now upon us, the best outcome is not far away. Other things on my to-do list are the induction cooktop, insulating the ceiling of my office, and replacing our ailing dishwasher and 19 year old fridge with more energy efficient models. By then I'm hoping battery storage for rooftop solar will have enough affordable options to make it worthwhile.

Further down the track is the electric car and doing away with petrol.

No coal. No gas. No petrol. No greenhouse gases. And a lower electricity bill. All from the comfort of our own homes. It's a great future worth investing in.

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