Electric Water Heaters Are Better at Storing Energy Than a Tesla Powerwall

Heating up water in residential and commercial homes produces a lot of greenhouse gasses.

A new study from researchers in Australia suggests that electric water heaters could not only lower that number by using green energy, but could also serve as much-needed batteries—essentially storing excess wind and solar in the form of heat.

Electric water heaters could provide 30GWh of flexibility, which is the equivalent of installing 2 million electrochemical batteries, such as Tesla's Powerwall.

Producing hot water in homes and commercial buildings accounts for 520 million metric tons of carbon every year in the U.S. That's the equivalent of 113 million cars—nearly half the amount of cars on U.S. roads today. Lowering that number is a high priority if we want to abide by The Paris Agreement and reach net-zero carbon emissions by 2050.

Thankfully, electric water heaters represent a big step in the right direction.

Today, there are two main types of electric water heaters—electric resistance water heaters and heat pumps. Each helps cut emissions simply by cutting out gas, and a new study by Australia's Institute for Sustainable Futures argues that these water-heating machines could also be an indispensable tool for storing energy. In fact, electric water heaters could be more efficient at storing energy than electrochemical batteries, such as Tesla's Powerwall.

In the report, researchers call for the widespread adoption of "smart" heat pumps and electric resistance systems in homes across Australia. During off-peak hours, these water heaters can essentially store renewable energy in the form of heat and help balance electricity supply as renewable energy availability fluctuates.

In total, electric water heaters could provide 30GWh of flexibility, which is approximately equivalent to two million home batteries. By the paper's estimates, widespread adoption of electric-powered water heaters would not only lower emissions, but also save customers some $4 billion (USD) in energy bills.

The ability of electric heaters to rival gas alternatives is a relatively new phenomenon, as the electric grid slowly ditches coal- and natural gas-fueled power plants for cleaner energy sources like wind, solar, and even nuclear. In 2010, for example, a typical resistance electric heater produced four times more emissions than gas heaters because of their intense electricity demands.

Back when power plants were belching out C02 to produce that energy, electric water heaters were a no-go. But as the grid turns green, those emissions costs are rapidly decreasing compared to gas heaters. According to the report, heat pumps are already more efficient than gas heaters, and by 2030, so resistance electric heaters will be as well.

The U.S. is also investigating ways that electric water heaters could improve grid efficiency and lower carbon emissions. In the summer of 2019, the California Public Utilities Commission concluded that these water heaters could be effective energy storage. At the time, commercial and residential buildings in California produced seven times more emissions than power plants in the state.

By one estimate, some 58 million electric water heaters are already installed in the U.S. and could be used to supplement grid storage. And because retrofitting water heaters for flexible energy storage is it relatively low-cost, they are more cost effective than battery alternatives. Add on utility incentives for using home water heaters for energy storage, and the economics get even better.

The quicker homes throughout the world ditch gas and embrace the electric future, the better that future will be.

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