Estimated Household Water Heater Energy Use, Running Costs and Emissions, Victoria. Based on energy price projections,

Estimated Household Water Heater Energy Use, Running Costs and Emissions, Victoria Based on energy price projections, 2005-2015 Report to the Sustainable Energy Authority Victoria by George Wilkenfeld and Associates Pty Ltd May 2005 GEORGE WILKENFELD AND ASSOCIATES Pty Ltd ENERGY POLICY AND PLANNING CONSULTANTS PO Box 934 Newtown NSW 2042 Sydney Australia Tel (+61 2) 9565 2041 Fax (+61 2) 9565 2042 e-mail: geosanna@ozemail.com.au

Contents CONTENTS...2 BACKGROUND...3 Energy Prices...3 Greenhouse gas emissions...4 The Water Heating Task...5 WATER HEATER CHARACTERISTICS...7 Electric...7 Natural Gas and LPG...12 Solar...12 RESULTS...15 References...19 WaterHeaterRunningCostsVictoria(GWA)V5 with results table 2

Background This study estimates the annual energy costs of water heating for households in Victoria, by combining: Estimates of annual energy demand for various household sizes, water heating energy forms and water heater technology types, by George Wilkenfeld and Associates (GWA); and Estimates of projected marginal household energy prices in Victoria over the period 2005-2015, by McLennan Magasanik Associates (MMA 2005). MMA s energy price estimates were forwarded to GWA by the Sustainable Energy Authority Victoria (SEAV), who commissioned the present study as well. This study also estimates the annual greenhouse gas emissions associated with the consumption of energy by water heaters of various energy forms and technology types. The terms of reference did not include the capital or installation costs of water heaters, so it is not possible to reach conclusions regarding the life cycle costs of alternative means of water heating based on this study alone. Energy Prices The MMA price projections represent the price for energy use by a water heater of that energy form to a household in Victoria. The price projection for each energy form is relatively constant throughout the period 2005-2015, so it is reasonable to use a simple average value. The 11-year average values reported by MMA are summarised in Table 1. (The discount LPG scenarios differ in the ways in which the value of a first-year discount is allocated to LPG end uses). Only five energy prices are used in the present study: LPG (a simple average of the four LPG prices estimated by MMA) Discount LPG (the average of the four discount LPG prices estimated by MMA) Natural gas Peak rate electricity; and Off-peak rate electricity (the time division between peak and offpeak is in Table 2). 1 This is a reasonable simplification, given that there is no overlap between the ranges: the clear order of price (from highest to lowest) is peak rate electricity, full price LPG, discount LPG, off-peak electricity and natural gas. Given the number of assumptions about water heater performance behind each set of running cost assumptions, further 1 MMA also calculated weighted electricity prices for some electric water heater types based on their estimate of the ratio of operating hours in the peak and off-peak rate periods under which electricity to that type of water heater is likely to be supplied. As we independently estimates the share of operating hours in peak and off-peak periods for each electric water heater type in the present study, it would be inconsistent to use an electricity price that is already time-weighted, so only MMA s base day-rate and off-peak price estimates are used. WaterHeaterRunningCostsVictoria(GWA)V5 with results table 3

differentiating the price assumptions would not increase the value of the findings indeed, it could falsely suggest greater precision than is in fact possible. Table 1 Projected energy price estimates, Victoria 2005-2015 (averaged) $/GJ delivered (MMA) c/mj delivered (present study) c/kwh delivered (present study) LPG marginal - medium price 34.94 3.48 12.51 LPG marginal - high price 36.66 LPG marginal - low price 33.37 LPG marginal - P&G 34.06 LPG flat discount - prop. hot water 28.12 2.76 9.94 LPG flat discount - all hot water 27.59 LPG variable discount - prop. hot water 27.64 LPG variable discount - all hot water 27.11 Elec marginal offpeak 20.63 2.06 7.43 Elec marginal peak 52.26 5.23 18.81 Natural gas marginal 11.97 1.20 4.31 Combined electricity 22.89 NA NA Table 2 Time divisions, peak and off-peak rates of electricity supply Greenhouse gas emissions Tariff Weekdays Weekends Hrs/wk % of week Peak 7am-11pm None 80 48% Off-peak 11pm-7am All 88 52% 168 The greenhouse gas emissions associated with consuming an additional unit of electricity, LPG or natural gas in Victoria are summarised in Table 3. The marginal emission factors indicate the additional greenhouse gas emissions of using or avoiding an additional unit of energy. For electricity, marginal emissions are significantly lower than average emissions, since a larger share of new generation projects are expected to be natural-gas fired than the current generation mix, which is dominated by brown coal. For natural gas and LPG, the marginal emissions are identical to the average emissions. Table 3 Greenhouse gas emission factors, Victoria 2005-2015 (averaged) At point of final use Indirect Fuel cycle kg CO 2 - e/gj kg CO 2 - e/gj kg CO 2 - e/gj kg CO 2 -e/ kwh Electricity Average, Victoria (a) NA 386.7 386.7 1.392 Electricity Marginal, Victoria (b) NA 307.4 307.4 1.107 (c) LPG Marginal and average, Australia (a) 59.4 7.8 67.2 0.242 Natural gas Marginal and average, Victoria (a) 51.9 11.7 63.6 0.229 Source: (a ) Greenhouse Challenge Factors and Methods Workbook, Australian Greenhouse Office, Version 4, 2004. (b) Australian Greenhouse Office, Marginal Intensity projections for use in Greenhouse Gas Abatement Program (GGAP) proposals, excel files dated June 2003 (downloaded Feb 2005). Includes allowance for regional loss factors (c) Average over period; range is from 1.027 to 1.163 WaterHeaterRunningCostsVictoria(GWA)V5 with results table 4

The Water Heating Task The quantity of energy delivered by a water heater depends on the quantity of energy in the hot water that is drawn off and the temperature rise between the cold feed water and the draw-off. Hot water use for personal washing would be expected to increase in proportion to the number of people in the household, all else being equal, but for uses such as cooking, clothes washing and dishwashing, consumption is not linearly related to the number of persons. Water heaters manufacturers estimate 50 litres per person per day, with extra bathrooms and hot-water using clothes washers counted as additional persons. Calculations of hot water energy requirements in Australian Standards assume a standard delivery temperature of 60 C at the water heater outlet and average household use of 200 litres per day. However, to test energy use in smaller and larger households than the average, deliveries of 120 litres and 300 litres per day are also examined. Table 4 indicates one way in which these various assumptions could be reconciled with the actual average Victorian household size of 2.53 persons in 2005 (ABS 3236.0). This would imply a weighted average hot water consumption of about 198 litres, very close to the medium household. Category of household Table 4 Indicative hot water use per person per day Litres/day hot water delivery Average Persons/HH litres hot water/person/ day Share of households Small 180 1.3 92 21% Medium 200 2.5 80 64% Large 300 4.4 68 15% Weighted average 198 2.53 78 100% Average cold water temperatures vary from place to place in Australia, and from month to month in a given location. There are several guides to the cold water temperatures to be used in calculating water heater energy consumption, especially for solar water heaters, the performance of which is particularly sensitive to the daily heating task. Some guides publish averages for larger regional zones and some for specific cities. AS 4234 Solar water heaters and the Office of the Renewable Energy Regulator (ORER) divide Australia into 4 main zones. Northern Victoria is in Zone 3 and Melbourne in Zone 4. ORER uses Adelaide water temperatures to represent Zone 3 and Melbourne data for Zone 4. AS4234 uses the same cold water temperatures as ORER for Zone 4, but quite different ones for Zone 3 (Figure 1). A calculation aid developed by the solar water heater manufacturer Solahart (SCF) uses specific town data, including Melbourne (Zone 4) and Mildura (Zone 3). 2 Figure 1 illustrates the monthly average cold water temperature curves relevant to Victoria in these three sources, and Table 5 summarises the annual average temperatures. There are considerable differences in the three estimates. The SCF set is selected for use in 2 SCF, or Solar Contribution Finder, Revision 1.2.141, Solahart 2003 (downloaded April 2005). WaterHeaterRunningCostsVictoria(GWA)V5 with results table 5

this study because the data are specific to Victoria (the ORER Zone 3 data are in fact based on Adelaide). The average cold water temperature difference between northern and southern Victoria (2.5 C) lies between the difference implied by AS4264 (3.2 C) and the smaller difference implied by ORER (1.3 C). The daily water heating tasks calculated from the average and extreme cold water temperatures in Table 5 and the standard delivery temperature of 60 C are summarised in Table 6. Figure 1 Cold water temperatures, Victoria 30.0 25.0 Degrees cold water temperature 20.0 15.0 10.0 Zone 3 - ORER Zone 3 (AS 4234) Zone 4 (AS 4234, ORER) Mildura (Z3) Melbourne (Z4) 5.0 0.0 Jan Feb Mar Apr May June July Aug Sep Oct Nov Dec Table 5 Annual average cold water temperatures by zone, Victoria AS4234 ORER (website) SCF Zone 3 (Mildura) 17.6 15.8 16.3 Zone 4 (Melbourne) 14.5 14.5 13.8 Difference 3.2 1.3 2.5 Lowest winter month avg water temp 8 8 8 All values C Table 6 Average daily water heating tasks, northern and southern Victoria 120 l/day delivery 200 l/day delivery 300 l/day delivery Zone 3 (Mildura) 22 37 55 Zone 4 (Melbourne) 23 39 58 Peak winter day (Zone 4) 26 44 65 All values MJ/day WaterHeaterRunningCostsVictoria(GWA)V5 with results table 6

Water heater Characteristics The method for calculating the running costs and greenhouse gas emissions for each water heater type is straightforward: 1. Begin with the daily energy delivery task in Table 6; 2. Estimate the conversion efficiency, storage losses and/or solar contribution for each technology type 3. From (1) and (2) above calculate the delivered thermal energy 4. Add any ancillary electric loads, such as standby and combustion air fans (for mains-connected gas units) and pumps (for heat pumps and split solar designs) 5. Calculate total annual electricity and fuel (NG or LPG) consumption 6. For electricity, estimate the share of energy delivered in peak and off-peak time periods 7. Apply the price estimates in Table 1 8. Apply the marginal greenhouse gas factors in Table 3. The calculations are detailed in an accompanying file [Water Heating Costs VIC V4.xls.]. As there are 6 water heating tasks in Table 6 there are 6 sets of outputs, plus a composite output representing a whole of Victoria average. The following sections detail the technical assumptions regarding each water heater type, using Zone 4 energy consumption values for illustration. Electric The assumptions for electric water heaters (summarised in Table 7) are as follows: Capacities are selected to match the daily delivery (eg the storage capacity of offpeak units must be larger than the average daily load). The standing heat loss for each capacity is taken from AS/NZS 1056:2-2004, on the assumption that the model just meets the MEPS level in force from October 2005; The annual loss factor adjusts the actual standing loss to the tested standing loss, on the assumption that the average storage temperature of off-peak water heaters drops during the day and the heat loss is less than the tested heat loss; The electric element is assumed to operate at 100% conversion efficiency; Single element off-peak water heaters are assumed to operate entirely in the offpeak period (ie that the time clock or other means of control is accurate). Dual element units are assumed to operate 10% of the time within that period, so both types use day-rate as well as off-peak rate electricity and so face different weighted electricity prices.; The annual running cost is calculated by multiplying the kwh delivered to the water heater by the weighted average electricity price (last column in Table 7). WaterHeaterRunningCostsVictoria(GWA)V5 with results table 7

Household category Elements Delivery (litres) Table 7 Assumptions for electric water heaters (Zone 4) Daily use/ capacity kwh/24 hrs loss Annual loss factor kwh/yr loss kwh/yr delivered % efficiency Daily hrs Heating (3.6 kw) Peak rate % of energy(a) % of heat 7am- 11pm Weighted c/mj Weighted c/kwh Off-peak electric Small 1 250 0.5 2.44 0.90 802 3154 75% 2.4 0.0% 0% 2.06 7.43 $ 234 Medium 1 315 0.6 2.72 0.90 894 4815 81% 3.7 0.0% 0% 2.06 7.43 $ 358 Large 1 400 0.8 2.93 0.90 963 6844 86% 5.2 0.0% 0% 2.06 7.43 $ 508 Off-peak electric Small 2 250 0.5 2.64 0.95 915 3268 72% 2.5 10.0% 7% 2.29 8.24 $ 269 (dual element) Medium 2 315 0.6 2.92 0.95 1013 4934 79% 3.8 10.0% 7% 2.29 8.24 $ 407 Large 2 400 0.8 3.13 0.95 1085 6967 84% 5.3 10.0% 7% 2.29 8.24 $ 574 (a) share of electricity supplied during peak hours at peak rate, given time divisions in Table 2 Table 8 Assumptions for gas (NG and LPG) storage water heaters (Zone 4) Household category Delivery (litres) Daily use/ capacity Useful Energy (MJ) Combust Efficiency Maint rate MJ/hr Natural gas storage Small 90 1.3 8470 75% 0.64 16889 4691 50% $ 202 $ 587 $ 466 3 star efficiency Medium 135 1.5 14116 75% 0.74 25282 7023 56% $ 303 $ 879 $ 698 No electricity Large 170 1.8 21174 75% 0.81 35349 9819 60% $ 423 $ 1,229 $ 976 Natural gas storage Small 90 1.3 8470 80% 0.20 12326 3424 69% $ 148 $ 428 $ 340 5 star efficiency Medium 135 1.5 14116 80% 0.23 19653 5459 72% $ 235 $ 683 $ 543 No electricity Large 170 1.8 21174 80% 0.25 28679 7966 74% $ 343 $ 997 $ 792 NG LPG LPG (disc) Household category Table 9 Assumptions for gas (NG and LPG) instantaneous water heaters (Zone 4) MJ/yr kwh/yr Task efficiency Delivery (l/min) UE (MJ) Daily mins of flow Daily mins of fan op Burner Efficiency MJ/yr Gas kwh/yr Task efficiency (a) Standby kwh/yr Fans kwh/yr Total kwh/yr Natural gas instant Small 16 8014 13.3 20.0 80% 10587 2941 78% 44 49 92 15.15 $ 14 $ 127 $ 368 $ 292 3 star efficiency Medium 20 13356 22.2 33.3 80% 17645 4901 78% 44 81 125 15.15 $ 19 $ 211 $ 613 $ 487 No electricity Large 32 20034 33.3 50.0 80% 26468 7352 78% 44 122 165 15.15 $ 25 $ 317 $ 920 $ 731 Natural gas instant Small 16 8014 13.3 20.0 92% 9206 2557 89% 44 49 92 15.15 $ 14 $ 110 $ 320 $ 254 5 star efficiency Medium 20 13356 22.2 33.3 92% 15344 4262 89% 44 81 125 15.15 $ 19 $ 184 $ 533 $ 424 No electricity Large 32 20034 33.3 50.0 92% 23015 6393 90% 44 122 165 15.15 $ 25 $ 275 $ 800 $ 636 (a) Includes electricity for standby, fans etc. (b) Assuming 95% of operation between 7am and 11pm. c/kwh Elec (b) Elec only NG only LPG LPG (disc)

Table 10 Assumptions for solar-electric water heaters (Zone 4) Household category Delivery (litres) Solar Panels kwh/yr delivered (heat) kwh/yr delivered (pump) kwh/yr Total Task efficiency (a) Peak rate % of energy (b) Weighted c/kwh Elec Electricity Thermosyphon Small 180 1 1278 0 1278 184% 18% 9.46 $ 121 - Minimum efficiency (c) Medium 220 2 1844 0 1844 213% 18% 9.46 $ 174 Large 300 3 2448 0 2448 240% 18% 9.46 $ 232 Thermosyphon Small 180 1 892 0 892 264% 18% 9.46 $ 84 - High efficiency Medium 220 2 1350 0 1350 290% 18% 9.46 $ 128 Large 300 3 1445 0 1445 407% 18% 9.46 $ 137 Split system Small 180 2 1190 88 1278 184% 18% 9.46 $ 121 - Minimum efficiency (c) Medium 220 3 1757 88 1844 213% 18% 9.46 $ 174 Large 300 3 3209 88 3297 178% 18% 9.46 $ 312 Heat pump Small 270 NA 0 1278 1278 184% 36% 11.49 $ 147 - Minimum efficiency (c) Medium 270 NA 0 1844 1844 213% 36% 11.49 $ 212 Large 270 NA 0 2353 3297 178% 36% 11.49 $ 270 (a) Useful energy/electricity delivered (includes pumping) (b) Share of electricity supplied during peak hours at peak rate, given time divisions in Table 2 (c) A unit just meeting the regulated performance requirements in Table 14 but supplying the delivery task in Table 6. Table 11 Assumptions for solar-gas (NG and LPG) water heaters (Zone 4) Household category Delivery (litres) Solar Panels MJ/yr Delivered (gas) kwh/yr delivered (pump) kwh/yr Total Task efficiency (a) Weighted c/kwh Elec (b) Electricity Split system Small 260 2 7999 89 2311 106% 15.15 $ 13 $ 96 $ 278 $ 221 - Minimum efficiency (c) Medium 260 2 11062 94 3167 128% 15.15 $ 13 $ 132 $ 385 $ 305 Large 260 3 18774 88 5302 113% 15.15 $ 13 $ 225 $ 653 $ 518 Preheat with instant. Small NA 1 0 1278 1278 307% 15.15 $ 22 $ 26 $ 77 $ 61 - high efficiency Medium NA 2 0 1844 1844 393% 15.15 $ 23 $ 34 $ 100 $ 79 Large NA 2 0 2353 3297 183% 15.15 $ 29 $ 111 $ 321 $ 255 (a) Useful energy/energy delivered (includes pumping) (b) Assuming 95% of operation between 7am and 11pm (c) A unit just meeting the regulated performance requirements in Table 14 but supplying the delivery task in Table 6. Table 12 Scaling assumptions and energy use for solar-electric, solar-gas and heat pump water heaters (Zone 4) NG only LPG LPG (disc) WaterHeaterRunningCostsVictoria(GWA)V5 with results table 10

Type of water heater MJ/yr Conven -tional MJ/yr 120 l/day delivery 200 l/day delivery % of Pass at Scaling MJ/yr Conven % of Conven 120 l? Factor -tional Conven -tional MJ/yr -tional Pass at 200 l? Scaling Factor MJ/yr at 300 l/day (c) Solar-electric thermosyphon (minimum efficiency) 4600 11500 40.0% Yes(a) 1.12 6640 16600 40.0% Yes(a) 1.37 8812 Solar-electric thermosyphon (higher efficiency) 3211 11500 27.9% Yes 1.00 4860 16600 29.3% Yes 1.00 5204 Solar-electric split system (minimum efficiency) 4600 11500 40.0% Yes(b) 0.75 6640 16600 40.0% Yes(b) 0.75 12185 Heat pump (minimum efficiency) 4600 11500 40.0% Yes(a) 1.36 6640 16600 40.0% Yes(a) 1.18 8470 Solar-gas split system (minimum efficiency) 8320 20800 40.0% Yes(a) 1.02 11400 28500 40.0% Yes(a) 1.07 18774 Solar preheat to gas instantaneous (higher efficiency) 2735 20800 13.1% Yes 1.00 3418 28500 12.0% Yes 1.00 9937 (a) Boost energy consumption of actual model scaled up to meet limit (b) Boost energy consumption of actual model scaled down to meet limit (c) Large delivery units are only required to met Guideline criteria at medium delivery (corresponds to peak winter hot water energy load of 42 MJ/day, or about 200 litres/day) Table 13 Scaling assumptions and energy use for solar-electric, solar-gas and heat pump water heaters (Zone 3) Type of water heater MJ/yr Conven -tional MJ/yr 120 l/day delivery 200 l/day delivery % of Pass at Scaling MJ/yr Conven % of Conven 120 l? factor -tional Conven -tional MJ/yr -tional Pass at 200 l? Scaling factor MJ/yr at 300 l/day (c) Solar-electric thermosyphon (minimum efficiency) 3546 11500 30.8% Yes(a) 1.12 5061 16600 30.5% Yes(a) 1.37 6681 Solar-electric thermosyphon (higher efficiency) 2495 11500 21.7% Yes 1.00 2797 16600 16.9% Yes 1.00 7230 Solar-electric split system (minimum efficiency) 3241 11500 28.2% Yes(b) 0.75 4724 16600 28.5% Yes(b) 0.75 7082 Heat pump (minimum efficiency) 4352 11500 37.8% Yes(a) 1.36 6282 16600 37.8% Yes(a) 1.18 8014 Solar-gas split system (minimum efficiency) 6483 20800 31.2% Yes(a) 1.02 8726 28500 30.6% Yes(a) 1.07 14168 Solar preheat to gas instantaneous (higher efficiency) 2211 20800 10.6% Yes 1.00 2669 28500 9.4% Yes 1.00 7581 (a) Boost energy consumption of actual model scaled up to meet limit (b) Boost energy consumption of actual model scaled down to meet limit (c) Large delivery units are only required to met Guideline criteria at medium delivery (corresponds to peak winter hot water energy load of 42 MJ/day, or about 200 litres/day) WaterHeaterRunningCostsVictoria(GWA)V5 with results table 11

Natural Gas and LPG Two types of gas water heater are examined storage (Table 8) and instantaneous ( Table 9). For each type there is a lower efficiency variant (just meeting 3 stars on the AS 4552/AG 102 scale) and a high efficiency variant (just meeting 5 stars). It is assumed that the efficiency and hence energy consumption of natural gas (NG) and liquefied petroleum gas (LPG) variants are identical, so differences in running costs are due solely to differences in fuel price. For storage water heaters, the delivery capacity has been matched to the daily delivery, to avoid the effect that task efficiency declines as the load on a storage water heater of given capacity falls, because heat loss (made up by the gas maintenance rate ) is largely fixed. Under the assumptions shown the task efficiencies (in Zone 4) range from 50% (small household, 3 star rating) to 60% (large household, 5 star rating). Instantaneous gas water heaters have high conversion efficiency (typically 80% for 3 star and 92% for 5 star). Many models also use mains electricity for ignition (NAEEEP 2004), as well as fans for blowing combustion air and then for cooling the heat exchanger. The electricity consumption of instantaneous gas water heaters is estimated on the following assumptions: standby consumption is 5W (44 kwh/yr). fan energy is 20W fan run time is 1.5 times total water flow time (allowing for post-cooling) daily flow time (minutes) is derived from the daily delivery (litres) and a flow rate of 9 l/min. With electricity use included, task efficiencies for instantaneous gas water heaters in Zone 4 range from 78% (3 star rating) to 90% (5 star rating). Solar The performance of solar and heat pump water heaters has been calculated with reference to both the physical performance of actual models and the maximum energy consumption prescribed under the Guidelines for compliance with the Plumbing (water and energy savings) Regulations 2004 (SEAV 2004) (Table 14). Table 14 Maximum energy consumption in Guidelines (Zone 4) House size Peak winter hot Electric Gas (includes LPG) water energy load (MJ/day) Conventional: nominal MJ/yr Solar-electric: max MJ/yr (a) Conventional: nominal MJ/yr Solar-gas: max MJ/yr (a) 1 or 2 bedrooms 25.2 11,500 4,600 20,800 8,320 3 or more bedrooms 42.0 16,600 6,640 28,500 11,400 Source :SEAV (2004): Maximum values for solar apply in Zone 4, and for units installed after June 2005 (a) Maximum energy allowance must cover pump and other auxiliaries, if present The Guidelines prescribe maximum boost energy limits, in Zone 4, for solar water heaters installed in two categories of dwellings (1-2 bedrooms and 3 or more bedrooms). However, energy consumption and hence running costs depend on the

number of persons in the household and other factors, not number of bedrooms. For simplicity, it is assumed that all small category households occupy dwellings with 1 to 2 bedrooms, and all medium and large households occupy dwellings with 3 or more bedrooms. The running costs for minimum efficiency electric- or gas-boosted solar water heaters (including heat pumps), just meeting the minimum Zone 4 solar contribution standards in the Guidelines, can be calculated directly from Table 14 For example, a minimum efficiency solar-electric water heater installed in a 3 bedroom dwelling may consume no more than 4,600 MJ (1,278 kwh) of electricity per year, so all that is needed to calculate the cost of the electicity is to estimate the ratio purchased in peak and off-peak times. However, this does not indicate the energy consumption or running cost of the same model of solar water heater installed in the Zone 3 part of Victoria, where solar contributions and cold water temperatures are higher, and running costs are lower. Nor does it indicate the energy use at different daily deliveries. The following procedure was adopted: For the following solar water heaters, the boost energy requirement was calculated at Mildura and at Melbourne for the delivery tasks summarised in Table 6, using the SCF predictive model Thermosyphon configuration, selective surface collector panels, electric boost Thermosyphon configuration, higher efficiency selective surface collector panels, electric boost Split configuration, electrically-boosted storage tank Split configuration, gas-boosted storage tank Solar preheat to unboosted storage tank, then to instantaneous gas water heater It was generally assumed that there was one solar panel panel for smaller water using households, 2 for medium and 3 for large, but in the split configurations an extra panel was assumed if the solar contribution was very low. For heat pumps, the electricity demand was calculated on the basis that the Coefficient of Performance (COP) was just high enough to meet the minimum efficiency requirement. The above procedure produced a boost energy value for each type, which could be tested against the limit constraints in the Guidelines. The modelled boost energy of each system type in Zone 4 was then compared with the regulated maximum boost energy. Where the modelled boost energy exceeds the maximum allowable, it is scaled down (indicated by a scaling factor of less than 1 in Table 12). For example, the modelled boost energy consumption of the solar-electric split system serving a small household was 6103 MJ/yr, well over the regulated limit of 4600 MJ (40% of 11,500 MJ for a 1-2 bedroom home). Therefore the boost energy was scaled down (and hence the solar contribution scaled up) in order to match the limit. This created a virtual solar water heater for which running costs could be calculated in Zone 3 as well as Zone 4. WaterHeaterRunningCostsVictoria(GWA)V5 with results table 13

Conversely, if the modelled water heating energy in Zone 4 is less than the minimum in the Guidelines, it is scaled up by applying a scaling factor of more than 1. This creates a virtual model for which running costs could be calculated in Zone 3. No adjustment was made to the modelled performance of the higher-efficiency solar water heater types (indicated by a scaling factor of 1.0 in Table 12). The Guidelines state that for electric boosted systems, the peak (day rate) boost energy used must be less than 25% of the reference conventional system energy use. 3 This has been simulated in the spreadsheet by specifying that 25% of boosting occurs within the 7am to 11pm period each day, including weekends. As only weekday energy consumed in this time period is charged at day-rate, it means that the total day-rate share of boost energy over the whole week is 18%, so it falls well within the Guideline limits. For the heat pump it is assumed that 50% of electricity is consumed within the 7am to 11pm period, so the total day-rate share of boost energy over the whole week is 36%. Models serving large water user households (300 l/day), still only have to meet the regulated limits of performance at a delivery of 200 l/day. A solar water heater meeting the limit criteria at 300 l/day will clearly also meet the criteria at the lower delivery. However, water heaters which fail the criteria at 300 l/day may meet them at 200l/day, so further analysis had to be carried out on some large delivery solar units to determine the scaling factor at a 200 l/day delivery. This factor (if less than 1) was then applied to the higher delivery task. 3 The Guidelines do not define reference conventional system, but is is assumed that for a solar-electric unit the rfence is a convetional day-rate system, since a pure single-element off-peak system would use no day-rate boost energy, so the comparison would be 25% of zero, wihch is zero. WaterHeaterRunningCostsVictoria(GWA)V5 with results table 14

Results The results are presented as a series of tables and bar graphs in the accompanying spreadsheet. There are groups of graphs for small, medium and high water using households, and for a weighted or composite household, in each of the two Zones. For the time being the shares of small, medium and large households in the composite have been set so that the weighted average hot water consumption is 198 litres/day, but this can be easily changed if better data on hot water use become available. For each group there are three graphs the annual energy consumption of each mode of water heating (the kwh graph), the annual energy cost of each, (the $ graph) and the annual greenhouse gas emissions of each (the CO2 graph). The final group of graphs is a weighted average for the whole of Victoria. At present the weighting is set at 35% Zone 3 and 65% Zone 4, but this can be easily changed. The graph contents and identifiers (marked on the tabs in the spreadsheet) are summarised in Table 15. The data tables from which the graphs are derived are at tables Calcs(3) and Calcs(4). Zone 3 Zone 4 Table 15 summary of output graphs and titles Small household (120 l/day) Medium household (200 l/day) Large household (300 l/day) Weighted average (198 l/day) 3S-kWh 3M-kWh 3L-kWh 3Av-kWh 3S-$ 3M-$ 3L-$ 3Av-$ 3S-CO2 3M-CO2 3L-CO2 3Av-CO2 4S-kWh 4M-kWh 4L-kWh 4Av-kWh 4S-$ 4M-$ 4L-$ 4Av-$ 4S-CO2 4M-CO2 4L-CO2 4Av-CO2 Zone-weighted (198 l/day) Av-kWh Av-$ Av-kWh As a sample of the outputs, the zone-weighted diagram groups are shown at Figure 2, Figure 3 and Figure 4 following. For water heater types using more than one energy form, the consumption, cost and emissions of each energy form are separately indicated by colour. As Figure 2 shows, natural gas and LPG variants are all assumed to be of equal efficiency and hence use the same amount of delivered energy. As Figure 3 shows, however, the energy costs are quite different because of the differences in energy price in Table 1. The greenhouse emissions of natural gas and LPG water heater variants are quite similar, as indicated in Figure 4, and below that of all electric and solar-electric water heaters. The lowest emissions by far are from preheat-type natural gas (or LPG) -boosted solar water heaters: as a matter of interest, over 40% of the emissions of this type come from the electricity used in the circulating pump and in the instantaneous gas unit. In the areas of Victoria not served by natural gas, the only practical water heating options are electric, solar-electric, LPG and solar-lpg. Table 17, Table 18, Table 19 and Table 20 summarise the annual running costs and related greenhouse gas emissions from these options and compare them with electric off peak and minimum efficiency solar-electric. The relative ranking of running costs for electric and LPG water heaters depends on the Zone, and whether the LPG is full price or discounted. In general: WaterHeaterRunningCostsVictoria(GWA)V5 with results table 15

the energy costs of conventional LPG water heaters are much higher than those of off-peak electric water heaters; for minimum efficiency solar water heaters (ie just meeting the Guideline requirements), the energy costs of LPG boosting are significantly higher than of electric boosting; and for high efficiency solar water heaters, the energy costs of LPG boosting are comparable to those of electric boosting (ie + $25 is within the bound of uncertainty) These are running costs only. Comparison of the life cycle costs of alternatives, and hence the costs of greenhouse gas abatement via different water heating options, would also require estimates of capital costs, which are not covered by this study. Table 16 Comparison of LPG and electric boosting costs for solar water heaters Zone 4 Zone 3 (disc) (disc) Solar-electric (Min efficiency) 174 174 133 133 Solar-LPG (Min efficiency) 398 319 305 245 LPG boosting compared with electric 223 144 172 112 Solar-electric (High efficiency) 128 128 74 74 Solar-LPG (High efficiency) 123 102 97 81 LPG boosting compared with electric -5-25 23 8 Source: Table 17, Table 18, Table 19 and Table 20 Figure 2 Annual consumption of delivered energy Zone-weighted average household, Victoria (198 l/day) 8000 7000 kwh per year delivered energy 6000 5000 4000 3000 2000 1000 0 Continuous electric OP electric Dual-element OP Gas storage (3*) - NG Gas storage (3*) - LPG Gas storage (3*) - LPG (disc) Gas storage (5*) - NG Gas storage (5*) - LPG Gas storage (5*) - LPG (disc) Gas inst (3*) - NG Gas inst (3*) - LPG Gas inst (3*) - LPG (disc) Gas inst (5*) - NG Gas inst (5*) - LPG Gas inst (5*) - LPG (disc) Solar-elect TS (min eff) Solar-elect TS (high eff) Solar-elect Split (min eff) Heat pump (min eff) Solar-gas Split (min eff) - NG Solar-gas Split (min eff) - LPG Solar-gas Split (min eff) - LPG (disc) Solar-preheat (high eff) - NG Solar-preheat (high eff) - LPG Solar-preheat (high eff) - LPG (disc) WaterHeaterRunningCostsVictoria(GWA)V5 with results table 16

Figure 3 Annual energy costs Zone-weighted average household, Victoria (198 l/day) $1,000 $900 $800 $700 $600 $500 $400 $300 $200 $100 $- Continuous electric OP electric Dual-element OP Gas storage (3*) - NG $ energy costs per year Gas storage (3*) - LPG Gas storage (3*) - LPG (disc) Gas storage (5*) - NG Gas storage (5*) - LPG Gas storage (5*) - LPG (disc) Gas inst (3*) - NG Gas inst (3*) - LPG Gas inst (3*) - LPG (disc) Gas inst (5*) - NG Gas inst (5*) - LPG Gas inst (5*) - LPG (disc) Solar-elect TS (min eff) Solar-elect TS (high eff) Solar-elect Split (min eff) Heat pump (min eff) Solar-gas Split (min eff) - NG Solar-gas Split (min eff) - LPG Solar-gas Split (min eff) - LPG (disc) Solar-preheat (high eff) - NG Solar-preheat (high eff) - LPG Solar-preheat (high eff) - LPG (disc) Figure 4 Annual greenhouse gas emissions Zone-weighted average household, Victoria (198 l/day) 6.00 5.00 t CO2-e per year 4.00 3.00 2.00 1.00 0.00 Continuous electric OP electric Dual-element OP Gas storage (3*) - NG Gas storage (3*) - LPG Gas storage (3*) - LPG (disc) Gas storage (5*) - NG Gas storage (5*) - LPG Gas storage (5*) - LPG (disc) Gas inst (3*) - NG Gas inst (3*) - LPG Gas inst (3*) - LPG (disc) Gas inst (5*) - NG Gas inst (5*) - LPG Gas inst (5*) - LPG (disc) Solar-elect TS (min eff) Solar-elect TS (high eff) Solar-elect Split (min eff) Heat pump (min eff) Solar-gas Split (min eff) - NG Solar-gas Split (min eff) - LPG Solar-gas Split (min eff) - LPG (disc) Solar-preheat (high eff) - NG Solar-preheat (high eff) - LPG Solar-preheat (high eff) - LPG (disc) WaterHeaterRunningCostsVictoria(GWA)V5 with results table 17

Table 17 Electric and LPG options Zone 4 (200 litres/day) t CO 2 -e/yr cf electric OP cf solar-electric t CO 2 -e/yr t CO 2 -e/yr Electric off-peak 358 5.3 NA NA 183 3.3 LPG storage (3*) 879 1.7 521-3.6 704-0.3 LPG storage (5*) 683 1.3 326-4.0 509-0.7 LPG instant (3*) 632 1.3 275-4.0 458-0.7 LPG instant (5*) 552 1.2 195-4.2 378-0.9 Solar-electric (Min efficiency) 174 2.0-183 -3.3 NA NA Solar-electric (High efficiency) 128 1.5-230 -3.8-47 -0.5 Heat pump 212 2.0-146 -3.3 38 0.0 Solar-LPG (Min efficiency) 398 0.8 40-4.5 223-1.2 Solar-LPG (High efficiency) 123 0.4-235 -5.0-52 -1.7 Table 18 Electric and LPG (discounted) options Zone 4 (200 litres/day) t CO 2 -e/yr cf electric OP cf solar-electric t CO 2 -e/yr t CO 2 -e/yr Electric off-peak 358 5.3 NA NA 183 3.3 LPG storage (3*) 698 1.7 341-3.6 524-0.3 LPG storage (5*) 543 1.3 185-4.0 368-0.7 LPG instant (3*) 506 1.3 149-4.0 332-0.7 LPG instant (5*) 443 1.2 85-4.2 268-0.9 Solar-electric (Min efficiency) 174 2.0-183 -3.3 NA NA Solar-electric (High efficiency) 128 1.5-230 -3.8-47 -0.5 Heat pump 212 2.0-146 -3.3 38 0.0 Solar-LPG (Min efficiency) 319 0.8-39 -4.5 144-1.2 Solar-LPG (High efficiency) 102 0.4-255 -5.0-72 -1.7 Table 19 Electric and LPG options Zone 3 (200 litres/day) t CO 2 -e/yr cf electric OP cf solar-electric t CO 2 -e/yr t CO 2 -e/yr Electric off-peak 339 5.0 NA NA 208 3.5 LPG storage (3*) 835 1.6 496-3.4 704 0.1 LPG storage (5*) 644 1.2 305-3.8 513-0.3 LPG instant (3*) 594 1.2 255-3.8 463-0.3 LPG instant (5*) 519 1.1 180-3.9 388-0.4 Solar-electric (Min efficiency) 131 1.5-208 -3.5 NA NA Solar-electric (High efficiency) 89 1.0-249 -4.0-42 -0.5 Heat pump 196 1.9-143 -3.2 65 0.4 Solar-LPG (Min efficiency) 319 0.7-20 -4.4 188-0.8 Solar-LPG (High efficiency) 119 0.4-220 -4.7-12 -1.2 Table 20 Electric and LPG (discounted) options Zone 3 (200 litres/day) t CO 2 -e/yr cf electric OP cf solar-electric t CO 2 -e/yr t CO 2 -e/yr Electric off-peak 339 5.0 NA NA 208 3.5 LPG storage (3*) 663 1.6 325-3.4 532 0.1 LPG storage (5*) 512 1.2 173-3.8 381-0.3 LPG instant (3*) 476 1.2 137-3.8 345-0.3 LPG instant (5*) 416 1.1 77-3.9 285-0.4 Solar-electric (Min efficiency) 131 1.5-208 -3.5 NA NA Solar-electric (High efficiency) 89 1.0-249 -4.0-42 -0.5 Heat pump 196 1.9-143 -3.2 65 0.4 Solar-LPG (Min efficiency) 256 0.7-83 -4.4 125-0.8 Solar-LPG (High efficiency) 99 0.4-239 -4.7-32 -1.2 WaterHeaterRunningCostsVictoria(GWA)V5 with results table 18

References ABS (3236.0) Household and Family Projections Australia, 1996 to 2021, Australian Bureau of Statistics AS/NZS 1056:2-2004 Electric water heaters, Part 5: Energy labelling and Minimum Energy Performance Standard (MEPS) requirements AS 4234-1994 Solar water heaters domestic and heat pump calculation of energy consumption AS 4552-2000, AG102-2000 Gas Water Heaters GWA (2004a) NFEE Energy efficiency improvement potential case studies, residential water heating George Wilkenfeld and Associates for the Sustainable Energy Authority Victoria, February 2004 GWA (2004b) Regulation Impact Statement: Proposed National System of Mandatory Water Efficiency Labelling for Selected Products, George Wilkenfeld and Associates for the Department of the Environment and Heritage, Australia, May 2004 MMA (2005) Prices for fuels supplied to solar hot water systems, Report to the Sustainable Energy Authority Victoria, McLennan Magasanik Associates, April 2005 NAEEEP (2004) Standby Power Profile: Instantaneous Gas Water Heaters, National Appliance and Equipment Energy Efficiency Program, March 2004 SEAV (2004) Guidelines for approval of domestic solar water heaters for compliance to the Plumbing (water and energy savings) Regulations, July 2004, Version 1, December 2004 ***** WaterHeaterRunningCostsVictoria(GWA)V5 with results table 19

Summary of all results Zone 3 Small households Medium Households Large households Weighted by Household Size Energy $ CO2 Energy $ CO2 Energy $ CO2 Energy $ CO2 kwhpa $pa Tpa kwhpa $pa Tpa kwhpa $pa Tpa kwhpa $pa Tpa Continuous electric 2682 $406 2.97 4268 $647 4.72 6226 $943 6.89 4229 $641 4.68 OP electric 3028 $225 3.35 4603 $342 5.09 6527 $485 7.22 4561 $339 5.05 Dual-element OP 3141 $259 3.48 4722 $389 5.23 6650 $548 7.36 4680 $386 5.18 Gas storage (3*) - NG 4523 $195 1.04 6741 $290 1.54 9397 $405 2.15 6674 $288 1.53 Gas storage (3*) - LPG 4523 $566 1.09 6741 $844 1.63 9397 $1,176 2.27 6674 $835 1.61 Gas storage (3*) - LPG (disc) 4523 $450 1.09 6741 $670 1.63 9397 $934 2.27 6674 $663 1.61 Gas storage (5*) - NG 3266 $141 0.75 5195 $224 1.19 7570 $326 1.73 5146 $222 1.18 Gas storage (5*) - LPG 3266 $409 0.79 5195 $650 1.26 7570 $947 1.83 5146 $644 1.24 Gas storage (5*) - LPG (disc) 3266 $325 0.79 5195 $516 1.26 7570 $753 1.83 5146 $512 1.24 Gas inst (3*) - NG 2875 $134 0.74 4762 $219 1.20 7122 $325 1.78 4720 $217 1.19 Gas inst (3*) - LPG 2875 $362 0.78 4762 $599 1.26 7122 $896 1.87 4720 $594 1.25 Gas inst (3*) - LPG (disc) 2875 $291 0.78 4762 $480 1.26 7122 $717 1.87 4720 $476 1.25 Gas inst (5*) - NG 2512 $118 0.66 4157 $193 1.06 6214 $286 1.57 4120 $191 1.05 Gas inst (5*) - LPG 2512 $317 0.69 4157 $524 1.11 6214 $782 1.65 4120 $519 1.10 Gas inst (5*) - LPG (disc) 2512 $255 0.69 4157 $420 1.11 6214 $626 1.65 4120 $416 1.10 Solar-elect TS (min eff) 985 $93 1.09 1406 $133 1.56 1856 $176 2.05 1385 $131 1.53 Solar-elect TS (high eff) 693 $66 0.77 777 $74 0.86 2008 $190 2.22 944 $89 1.04 Solar-elect Split (min eff) 988 $93 1.09 1400 $132 1.55 2055 $186 2.27 1412 $132 1.56 Heat pump (min eff) 1209 $139 1.34 1745 $201 1.93 2226 $256 2.46 1705 $196 1.89 Solar-gas Split (min eff) - NG 1799 $87 0.49 2418 $114 0.63 4023 $183 1.00 2529 $118 0.66 Solar-gas Split (min eff) - LPG 1799 $227 0.51 2418 $305 0.66 4023 $506 1.05 2529 $319 0.69 Solar-gas Split (min eff) - LPG (disc) 1799 $183 0.51 2418 $245 0.66 4023 $405 1.05 2529 $256 0.69 Solar-preheat (high eff) - NG 614 $42 0.27 741 $48 0.30 2106 $110 0.64 919 $56 0.34 Solar-preheat (high eff) - LPG 614 $81 0.27 741 $97 0.31 2106 $268 0.66 919 $119 0.35 Solar-preheat (high eff) - LPG (disc) 614 $69 0.27 741 $81 0.31 2106 $219 0.66 919 $99 0.35

Zone 4 Small households Medium Households Large households Weighted by Household Size Energy $ CO2 Energy $ CO2 Energy $ CO2 Energy $ CO2 kwhpa $pa Tpa kwhpa $pa Tpa kwhpa $pa Tpa kwhpa $pa Tpa Continuous electric 2809 $426 3.11 4480 $679 4.96 6542 $991 7.24 4438 $673 4.91 OP electric 3154 $234 3.49 4815 $358 5.33 6844 $508 7.57 4770 $354 5.28 Dual-element OP 3268 $269 3.62 4934 $407 5.46 6967 $574 7.71 4889 $403 5.41 Gas storage (3*) - NG 4691 $202 1.07 7023 $303 1.61 9819 $423 2.25 6953 $300 1.59 Gas storage (3*) - LPG 4691 $587 1.13 7023 $879 1.70 9819 $1,229 2.38 6953 $870 1.68 Gas storage (3*) - LPG (disc) 4691 $466 1.13 7023 $698 1.70 9819 $976 2.38 6953 $691 1.68 Gas storage (5*) - NG 3424 $148 0.78 5459 $235 1.25 7966 $343 1.82 5408 $233 1.24 Gas storage (5*) - LPG 3424 $428 0.83 5459 $683 1.32 7966 $997 1.93 5408 $677 1.31 Gas storage (5*) - LPG (disc) 3424 $340 0.83 5459 $543 1.32 7966 $792 1.93 5408 $538 1.31 Gas inst (3*) - NG 3033 $141 0.78 5026 $230 1.26 7518 $342 1.87 4981 $228 1.25 Gas inst (3*) - LPG 3033 $382 0.81 5026 $632 1.32 7518 $945 1.96 4981 $627 1.31 Gas inst (3*) - LPG (disc) 3033 $306 0.81 5026 $506 1.32 7518 $756 1.96 4981 $502 1.31 Gas inst (5*) - NG 2650 $124 0.69 4387 $203 1.11 6559 $301 1.65 4348 $201 1.10 Gas inst (5*) - LPG 2650 $334 0.72 4387 $552 1.17 6559 $825 1.73 4348 $547 1.16 Gas inst (5*) - LPG (disc) 2650 $268 0.72 4387 $443 1.17 6559 $661 1.73 4348 $439 1.16 Solar-elect TS (min eff) 1278 $121 1.41 1844 $174 2.04 2448 $232 2.71 1816 $172 2.01 Solar-elect TS (high eff) 892 $84 0.99 1350 $128 1.49 1445 $137 1.60 1268 $120 1.40 Solar-elect Split (min eff) 1278 $121 1.41 1844 $174 2.04 3385 $312 3.75 1956 $184 2.16 Heat pump (min eff) 1278 $147 1.41 1844 $212 2.04 2353 $270 2.60 1802 $207 1.99 Solar-gas Split (min eff) - NG 2310 $109 0.61 3160 $146 0.80 5302 $238 1.29 3303 $152 0.83 Solar-gas Split (min eff) - LPG 2310 $291 0.63 3160 $398 0.84 5302 $666 1.36 3303 $416 0.87 Solar-gas Split (min eff) - LPG (disc) 2310 $234 0.63 3160 $319 0.84 5302 $532 1.36 3303 $333 0.87 Solar-preheat (high eff) - NG 760 $49 0.30 950 $57 0.35 2760 $140 0.80 1181 $68 0.41 Solar-preheat (high eff) - LPG 760 $99 0.31 950 $123 0.36 2760 $350 0.83 1181 $152 0.42 Solar-preheat (high eff) - LPG (disc) 760 $83 0.31 950 $102 0.36 2760 $284 0.83 1181 $126 0.42 WaterHeaterRunningCostsVictoria(GWA)V5 with results table 21

Average Weighted by Household Size Energy $ CO2 kwhpa $pa Tpa Continuous electric 4365 $661 4.83 OP electric 4697 $349 5.20 Dual-element OP 4816 $397 5.33 Gas storage (3*) - NG 6855 $295 1.57 Gas storage (3*) - LPG 6855 $858 1.66 Gas storage (3*) - LPG (disc) 6855 $681 1.66 Gas storage (5*) - NG 5316 $229 1.22 Gas storage (5*) - LPG 5316 $665 1.29 Gas storage (5*) - LPG (disc) 5316 $529 1.29 Gas inst (3*) - NG 4890 $224 1.23 Gas inst (3*) - LPG 4890 $615 1.29 Gas inst (3*) - LPG (disc) 4890 $493 1.29 Gas inst (5*) - NG 4268 $197 1.09 Gas inst (5*) - LPG 4268 $537 1.14 Gas inst (5*) - LPG (disc) 4268 $431 1.14 Solar-elect TS (min eff) 1665 $158 1.84 Solar-elect TS (high eff) 1155 $109 1.28 Solar-elect Split (min eff) 1766 $166 1.95 Heat pump (min eff) 1768 $203 1.96 Solar-gas Split (min eff) - NG 3032 $140 0.77 Solar-gas Split (min eff) - LPG 3032 $382 0.81 Solar-gas Split (min eff) - LPG (disc) 3032 $306 0.81 Solar-preheat (high eff) - NG 1090 $64 0.38 Solar-preheat (high eff) - LPG 1090 $140 0.40 Solar-preheat (high eff) - LPG (disc) 1090 $116 0.40 WaterHeaterRunningCostsVictoria(GWA)V5 with results table 22