Case study: Why heat pumps now trump gas hot water

With gas prices escalating, the search is on for a cheaper way to heat hot water in apartment complexes. Surprisingly, one of the more economical solutions is electricity in the form of electric heat pumps – and there are environmental benefits too.

Wattblock, an organisation specialising in reducing energy costs for strata apartments, recently presented the findings of a “head-to-head shoot out” comparing three rooftop technologies used in residential strata. The City of Sydney sponsored the study under its ratings and assessment grants project.

The Solar, Solar Thermal and Heat Pump on Strata Case Study focused on a five-storey Glebe strata apartment block with 46 apartments and one commercial tenancy. The common area electricity consumption is approximately $12,000 a year while the apartment electricity consumption is estimated to be $68,000.

Wattblock founder and chief executive Brent Clark said Australia historically had low gas prices and as a result everyone installed gas hot water systems in residential developments.

“Since the federal government allowed the exporting of gas, the gas prices have spiked,” he said.

The key challenge of the study was to work out the optimal solution for a strata building with an existing gas hot water system but roof space to install solar and/or other hot water solutions.

Several options were considered:

  • Install a solar photovoltaic system (10 kilowatts) to power common areas with any excess energy feeding into the grid.
  • Install a larger solar photovoltaic system (20kW) to power common areas first, then power individual apartments, before feeding excess energy back into the grid. This would require a digital metering and billing solution.
  • Install a solar thermal hot water system to be boosted by existing gas hot water equipment.
  • Install an electric heat pump system to be boosted by existing gas hot water equipment.
  • Install a solar photovoltaic system for common areas and electric heat pump to be boosted by existing gas hot water equipment.

The optimal solution was found to be the electric heat pump system plus a 10kW solar system to power the common areas.

Clark said the combined solution would save 12,900 kWh of electricity, resulting in a 26 per cent reduction in electricity costs. The common area gas hot water system would reduce gas usage by 263,700 kJ – a net 70 per cent reduction. The solution would achieve savings of $14,000 a year, with a payback of 6.4 years.

In comparison, solar thermal hot water would achieve savings of $5896 a year with a payback of 9.1 years. A solar 20kW solar photovoltaic system would achieve savings of just $726 a year with a payback of more than 25 years.

“With a normal building, if they were predisposed to solar panels, they would have just gone out and plastered their whole roof with solar panels,” Clark said. “The thing we have actually found here is, don’t plaster the whole roof with solar panels because you get more benefits per square metre from an electric heat pump.

“So if you’ve got a finite amount of space leave 17 square metres of that area for your heat pump and use the rest for your solar panels – that’s the upshot.”

Clark said the electric heat pump had three main benefits when compared with gas:

  • It heats the water slowly over a long period of time

“Electric heat pumps heat very slowly and so imagine an electric heat pump heating hot water over a period of 14 hours versus gas heating instantaneously – or very quickly, explosively – using a lot of energy,” he said.

In addition, heat pumps can take advantage of off-peak electricity at times when demand is low.

  • Reticulation losses are avoided because the water is kept in storage tanks

“In Australia with gas hot water it’s circulated through the building, continuously in a lot of buildings, and on the circulation path it loses 10 degrees of its heat,” he said.

“Hot water in a gas system often has to be re-heated after being circulated through the building, leading to energy waste,” the study noted.

Heat pumps work like a reverse refrigerator. Hot air is drawn in and used to heat the water for later use.

“The idea is you keep that water in energy banks – hot water storage tanks – at 55 degrees,” Clark said. “When the building needs more hot water you transfer that preheated water into the gas hot water tank and just do the final 10 degrees in the gas hot water system.”

  • The air temperature coming into the heat pump provides a four times multiplier in terms of the energy used for heating up the water.

“For every 1kWh of energy input into the heat pump, up to 4kWh of thermal energy can be generated by extracting heat from the air,” the study noted.

Sixty per cent savings for Meriton

Meriton Rental Apartments opted for electric heat pumps for its new Arise apartment development at Lane Cove. The development consists of five towers and 367 one and two-bedroom apartments.

Maroochydore-based SUNPAK Projects designed and installed an energy-efficient heat pump-based hot water system for each of the five towers.

Apparently, alternative hot water solutions such as gas were considered, but the cost of connecting gas to the development was significant. Importantly, projected ongoing running costs for the electric heat pump solution were 60 per cent lower than gas.

Environmental considerations

Of course, when comparing the environmental pros and cons of these systems, strata committees must consider whether their complex consumes clean energy.

“This is a solution that can work all over Australia but it actually gets better as you go northwards,” Clark said.

“Up in Queensland there are innovative companies that actually design and manufacture their own heat pumps in Queensland and as you go north it’s better for solar too.”

Clark pointed out that heat pumps could reduce the urban heat island effect in Sydney and other cities.

“Everything counts,” he said. “Heat pumps are taking heat out of the local environment. It’s only a miniscule effect but if you had more widespread deployment of heat pumps – they are taking hot air out of the urban heat island and putting it to good use.”

Strata committees are listening

Wattblock presented the case study to the Glebe apartments’ strata committee last week.

“The best overall solution is for them to put down solar panels plus an electric heat pump, then you have local renewable generation helping your electric heat pump,” Clark said.

Sydney stratas are already benefiting from the case study’s findings.

“One stopped investigation into solar thermal and another one started investigation into electric heat pumps,” Clark said.

 

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Comments

2 Responses to “Case study: Why heat pumps now trump gas hot water”

  • nicholas loder says:

    Definitely agree with moving away from gas with solar becoming more a winner!
    Just a small comment: “In addition, heat pumps can take advantage of off-peak electricity at times when demand is low.” – at off peak 1 and possibly 2 the 2am kick in introduces a noise factor (55dB)to neighbours (not impossible to solve), and at that time of the morning especially in winter there is not a lot of heat to extract from the air. Maybe ok with the 1-2pm off peak period.

  • Ian says:

    Brilliant study. I have suspected this is the case for a while now.
    On a spreadsheet. Gas is between 2X (commercial scale) and 3X (single dwelling) more expensive than heat pump hot water.
    In terms of emisions they are roughly equal with gas.
    But as soon as extra solar PV or Greenpower is part of the supply the heat pumps are lower emissions too.

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