How much could you save on hot water? A worked NZ example (2026)
Heating water uses about 30% of the average New Zealand household's energy, according to EECA. That makes your hot water cylinder one of the best places to cut your power bill. Here's how we estimate what a solar thermodynamic system could save a typical household.
The worked example
| Step | Figure | Source |
|---|---|---|
| Annual electricity use, typical household | 8,000 kWh | MBIE's modelled household (QSDEP) |
| Share used for water heating (30%) | 2,400 kWh | EECA |
| Solar thermodynamic system, family of four (0.5 kWh per person per day) | 730 kWh | Energie system performance |
| Electricity saved | 1,670 kWh (about 70%) | 2,400 − 730 |
| Electricity price, national average | 42.1c per kWh (incl. GST) | MBIE, 15 August 2026 |
| First-year saving | $703 | 1,670 kWh × $0.421 |
A solar thermodynamic system uses about 0.5 kWh of electricity per person per day to heat your water, because most of the heat comes from the sun and the surrounding air. That's why it can cut the electricity used to heat water by up to 80% compared with a standard electric cylinder. The exact saving depends on your household.
Savings over time
Power prices in New Zealand keep rising. Consumer NZ reports household electricity costs have gone up about 177% since 1999, nearly twice the rate of inflation. Our estimates assume a conservative 4.5% rise each year:
| Period | Saving that year | Total saved to date |
|---|---|---|
| Year 1 | $703 | $703 |
| Year 5 | $838 | $3,846 |
| Year 10 | $1,045 | $8,639 |
| Year 20 | $1,623 | $22,056 |
Why efficiency is the cheapest win
EECA has long argued that energy efficiency is the cheapest way to cut energy use: it costs less than building new generation, and households spend less on power. New Zealand's electricity is already mostly renewable (a record 92% in the June 2026 quarter). So using less of it to heat water saves money, and switching from gas cuts emissions too.
We also help homes hold on to that heat with high-performance Eurothane PIR insulation. See our sister site, insulation.kiwi.nz.
Get your own estimate
Your savings will depend on your household size, how much hot water you use, your power price and where you live. Contact us or call 03 540 3003 for a free estimate for your home. See also how it works and our domestic water heating range.
Savings are estimates based on average household electricity use, estimated water heating use, projected system performance, current electricity prices and a 4.5% annual price increase. Actual savings will vary.