Hot water accounts for about 30% of household power bills and controlling the times it’s switched off and on can make a big difference when it’s time to pay that bill.

Your water cylinder is like an electric jug with great insulation, it uses an element to heat water to a certain temperature. When you wash the dishes or take a shower the hot water you use is replaced by cold, this triggers a thermostat, activates the element and heats more water which is then stored until you use it. Most cylinders are switched on all the time and heat more water whenever the temperature drops.

But your hot water cylinder doesn’t need to be switched on all the time. As soon as you finish your morning shower it will start heating the water again, not super useful if you’re about to head to work. 

Because the cost and availability of electricity varies throughout the day, it makes sense to control your water heating to use electricity when it's less expensive, and take advantage of your cylinders insulation to retain the heat in between. 

Until now this sort of hot water control has only been used by network companies to reduce electricity demand at peak times using something called ripple control ¹ . This is usually connected to industrial heating and large appliances, like your hot water cylinder. Individual households haven’t been able to control their hot water without installing special equipment. 

We’ve been working with metering companies like Influx to remotely manage your hot water cylinder alongside your network operator using new smart meters that are being installed nation-wide.

For the past six months, we’ve tested hot water controls with a small group of Octopus employees and customers, and we’re excited to share some of the results.

By collecting information about cylinder sizes and hot water usage patterns we’re learning how much control is required to save our customers money without running low on hot water. 

We’ve turned off their heating at the most expensive times of the day; four hours in the morning, and four hours in the evening. 

Switching off the hot water for 8 hours a day sounds pretty scary, and the last thing we want is for our customers to have cold showers! So, we’re happy to report that out of 25 participants we’ve only had one household report ‘slightly lukewarm water’ once. Their hot water system ‘isn’t the newest’, and they had problems with it before they started our control trial. 

We pushed the boat out further with a smaller group of participants, and turned their hot water cylinders off for 18 hours a day! The good news — they haven't noticed a difference in water temperature either.

Currently about 3 - 4 kWh per day is being shifted away from peak periods when pricing is often around 10c per kWh more expensive than cheaper times of day. 

This alone equates to over $100 savings for an average household, and much more if we extend the time the cylinder isn’t drawing power.

This is just one way we can make the most of current technology to benefit consumers.

As new meters become widespread, there will be more benefits. Like on occasions when there are problems with the national grid, hot water cylinders and other domestic and industrial appliances that use a lot of power can be controlled to avert power outages with more accuracy and agility than the former ripple control system which is being phased out. 

We also think it would be great if we could switch off your cylinder for you to save power while you’re on holiday.

We want to put the control in your hands, and let you decide what level of savings you want. The more hours of control you can live with, the more savings you can make.

It’s part of our wider goal of ‘intelligent demand’. 

Energy systems are changing and as we move more and more towards renewably generated electricity like wind, solar and hydro,  we can continue using gas to manage variability which is both expensive and bad for the environment or we can start making our usage more intelligent, automating its usage to balance the grid. . 

We’re bringing technology to New Zealand that’s been trialled in the UK to allow us to remotely control other energy intensive devices, like EV charging and heat pumps. 

By combining these, our customers can have a significant amount of their energy ‘smartly controlled’, only using energy when they need it and saving money!

We’re keen to get more customers on this trial to help save, and figure out the ideal level of control, without cold showers! 

We’ll be rolling out the trial to eligible customers in coming months, but if you’re keen to know more please get in touch at 

¹ Ripple control is used by networks to reduce peak demand and manage network issues.

Hacking hot water to save money

Turn off the lights when natural light is sufficient and when you leave the room. It’s that simple!

Use the stairs as often as possible. Elevators consume electricity. You, on the other hand, do not.

Windows are wasteful, use them wisely! If your climate control system is on, shut them…if you need a little fresh air, turn off the heat or AC.

The less hot water you use, the less energy is needed to heat

Power your computer down when you’re away. A computer turned off uses at least 65% less energy than a computer left on or idle on a screen saver.

6) Unplug appliances that aren’t in use

Did you know that many electronics continue using energy even when powered down? This is true of any charger, television, printer, etc. Use a power strip to easily unplug electronics when not in use. Minimise plug load too, cutting down the number of appliances you are running will save a lot of energy.

Whether you have AC or a heat pump, keep your temperature system on a moderate setting while you’re in the room.

Only do full loads of laundry and use the bright colours, delicate, and cold cycles whenever you can.

Check and see how high the thermostat is set on your hot water cylinder. A couple of degrees can make a big difference to your power use without having to take a cold shower. However, do not reduce it below 60 degrees celsius to prevent the risk of harmful bacteria.

LED light bulbs use 90-95% less energy than incandescent and last up to 10 times longer.

Easy as resolutions for 2023 to reduce  your carbon footprint 

Rich Ellis is the co-founder The Marlborist, who directs the winemaking program responsible for creating some of the best wine the region has to offer.

Tell us a bit about yourself and your background 

I live in Marlborough with my wife and our two young kids. We moved here because I’m a winemaker and this is a fantastic climate for making wine - with crisp winters and long sunny summer days. I have worked in the wine industry both in NZ, and around the world, for 20 years and recently started my own wine company (

Tell us about some of your recent design projects that incorporated energy sustainability or solutions. 

My wife and I work from home and we have young kids so a priority for us has been a warm, dry home. After looking at a range of heating solutions we decided to install a Daikin ducted heat pump system.  It has been a game-changer, I’ve got an app for it so I can turn it on when I’m away from home. We’ve also found that with half price nights it’s a no-brainer to keep it running overnight during winters as it only costs a few dollars.

Tell us about your home, how would you describe the environment?

We live in a 1920’s bungalow, it used to be the mayor’s house and local rumour has it that the Queen Mother/ King’s Grandma had afternoon tea here when she visited the region!  When we bought it most of it was in original condition…in other words freezing! So we renovated extensively in 2017, packing the walls, underfloor and ceilings with insulation and replacing the joinery with double glazing. The difference in terms of livability is night and day compared to when we first moved in.

Have you incorporated sustainable energy solutions in your own home and lifestyle?

We now use a ducted heat pump which we try to operate during off-peak hours so the house is warm and toasty through the night and it retains this heat during the day.

What mindful approaches do you take to your energy consumption throughout the day? 

Although we work at home, we’re mindful to try and avoid using power-hungry appliances (e.g. washing machine, dryer, dishwasher and to some extent the heat pump) during the daytime, we load up the nights.

Do you have an idea of what you'll begin working on next?

With gas prices on the rise we’re investigating moving our gas hot water across to an electric heat pump system and potentially looking at solar too.

What are your top 5 tips for saving on energy costs?

Being conscious as to when you use appliances, it turns out lots of appliances have timers on which makes it easy to set them to come on at night.

Thick curtains make a difference, and in winter don’t forget to pull them as the sun goes down so you keep the heat in.

We’re also lucky in that we live close to town and our children's school so we try to walk or bike everywhere. This means we avoid the hit of rising petrol costs, but more importantly the best conversations happen on the walk to and from school.

With Octopus Energy you can keep your house toasty (or cool!) with our great 

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