Analysts say Australia should change how it uses hot water systems to make better use of its solar power. 

In the age of abundant renewable energy, Australia faces a paradox: despite generating substantial solar power, much of it goes to waste. 

This is particularly true during the middle of the day when solar panels operate at peak efficiency. 

To maintain grid stability, the Australian Energy Market Operator (AEMO) often has to instruct solar farms to disconnect from the grid, a practice known as “curtailment”. 

Curtailment prevents the oversupply of electricity when demand is low, but it also results in significant energy wastage. 

Recent analysis of the National Electricity Market (NEM) data indicates that the forced curtailment for 2023-24 amounted to approximately 4,000 gigawatt-hours (GWh), which is roughly 9.3 pe cent of the total annual wind and utility solar generation in Australia.

One potential solution to this issue lies in rethinking the operation of residential off-peak hot water systems.

Traditionally, these systems, which account for about 30 per cent of Australian household hot water setups, are programmed to use power overnight when electricity demand is low, and coal-fired generators continue to run.

However, the dynamics of energy supply and demand have shifted. 

With the advent of renewable energy, particularly solar power, off-peak times could be redefined to take advantage of the midday surge in solar generation.

Research by the Institute for Sustainable Futures at the University of Technology Sydney suggests that if off-peak hot water systems were adjusted to operate during the day, they could absorb approximately 4,000 GWh of electricity - the same amount that was curtailed in 2023-24.

Off-peak hot water systems were initially introduced in the 1950s as an innovative solution to help balance the electricity grid during times of low demand. 

The electricity system of the 2020s faces different challenges, but these systems could again play a critical role in addressing them. 

The concept is simple: shift the operation of off-peak systems to the middle of the day when renewable energy is plentiful. 

This adjustment could significantly reduce the need to curtail solar power, allowing more renewable energy to be utilised effectively.

Large commercial buildings have already begun shifting their heating and cooling electricity use to periods of high renewable energy availability. 

Similarly, residential off-peak hot water systems offer a significant opportunity to align household electricity demand with the availability of solar power. 

By moving off-peak hours from night-time, dominated by coal-fired electricity, to the daytime, when solar energy is most abundant, Australia could make better use of its renewable resources and reduce energy wastage.

The findings come from a recent Australia Institute discussion paper (PDF).