Although wind and solar energy are growing in popularity, storing that clean energy costs a lot of money. If consumers wanted to keep their green energy in Tesla’s Powerwall home battery, for example, they would have to shell out $3,500. That may be why Tesla discontinued sales of its largest Powerwall a couple weeks ago.

Instead of expensive battery storage, utilities are turning to a low-cost alternative: For a just few hundred dollars, your electric water heater can be made to work like a battery. That’s a fraction of the cost of a Tesla Powerwall. Here’s how it works.

Why water heaters?

If you’re a homeowner, you may have noticed a man-sized cylinder in your cellar. This is your water heater. Most of these heaters are powered by natural gas or electricity. In gas-fired heaters, a gas burner warms the water. In electric heaters, a pair of heated coils does the job.

A water heater might store 30 to 50 gallons of hot water that is warmed at intervals throughout the day. If you take a shower, the tank is topped up with cold water and must be heated. If you install a large water heater — 80 or more gallons — you can make the water very hot just once a day. You will have enough warm water to meet your needs, and if it’s too hot, you can mix in a little cold water to get the temperature right.

The advantage of a large electric water heater is that you can choose to heat your water when power is cheapest. The tactic was pioneered by rural electric cooperatives — consumer-owned utilities operating in some of the poorest parts of the country — a few decades ago. By controlling residential electric water heaters, co-ops could warm the water in the middle of the night, when demand dropped and the price of electricity was at its lowest, helping consumers save money. Now, co-ops are using water heaters to get the most out of renewable energy.

Making solar and wind work better

Wind and solar power are well on their way to edging fossil fuels out of the market. Renewables are cheap, clean, and impervious to the fluctuations in price that make oil and gas such a precarious investment. But fossils fuels still hold one key advantage: They can produce power at all hours of the day.

“Historically speaking…you have these really dependable resources — like coal or gas or nuclear energy — that you can make produce energy whenever want,” said Keith Dennis, an energy efficiency expert at the National Rural Electric Cooperative Association. “Right now, with renewable resources like wind and solar, the electricity is generated whenever the sun is shining or the wind is blowing.”

Wind turbines fall still when the wind doesn’t blow. Photovoltaic solar panels stop generating power after the sun goes down, just as residential demand is ramping up. For solar, the result looks something like this:

Image for post
Photovoltaic solar panels stop generating power after the sun goes down, just as residential demand is ramping up. Source: Nexus Media

There are two ways to fix this graph. One is to extend supply, storing surplus energy generated during day until it is needed at night. Scientists and engineers have made huge breakthroughs in battery storage. However, home batteries remain costly, and even a very large battery can only power a home for a few hours.

The second way to fix the graph is to reshape the demand line — shifting more of the demand to the middle of the day when solar output is at its highest. Water heaters account for 9 percent of residential energy use. That demand can be time-shifted to meet supply, by running the water heater in the middle of the day.

Image for post
Water heaters can shift more of the residential energy demand to the middle of the day when solar output is at its highest. Source: Nexus Media

In this way, a water heater works like a kind of battery, storing energy in the form of heat. According to Dennis, a 52-gallon water heater can store roughly 12 kWh of energy. The price? A new water heater costs around $1,000, though in many cases an existing water heater can be connected to the grid for $500. By comparison, a Tesla home battery stores just 7kWh of energy and costs more than $5,000 (when factoring in the cost of an inverter).

Cleaner, cheaper energy

Now, co-ops are using water heaters to extend the reach of community solar projects, heating water during the day when the sun is shining and energy is cheap. The savings are so large that many co-ops are offering rebates to consumers who buy water heaters. Steele-Waseca Cooperative Electric in Minnesota actually gave away electric heaters to customers who bought into a community solar array.

“When the wind is blowing or the sun is shining, large-capacity water heaters can be enabled to make immediate use of that energy to heat water to high temperatures,” said Gary Connett, director of member services at Great River Energy, another co-op in Minnesota. “The water heaters can be shut down when renewables are scarce and wholesale costs are high.”

Typically, when energy demand peaks, utilities turn to peaker power plants. These plants supply the most expensive electricity. Water heaters supplant peaker plants by reducing demand during peak hours, leveling out the gaps between supply and demand that would otherwise be filled by a gas-fired power plant. What’s more, cutting-edge grid interactivewater heaters are able to respond to minute fluctuations in supply, making them more efficient than peaker plants.

The result is cleaner, cheaper electricity. According to a report from The Brattle Group, each electric water heater could save the grid up to $200 per year, savings that may be passed on to the consumer in the form of lower energy bills.

“When you’re using hot water from a water heater, that water’s going to feel the same to you no matter how it was heated,” said Dennis. You could heat it with “expensive coal power or natural gas power, or you could be heating it in the middle of the night with wind power. What will be different is the cost to the overall system — and the results will impact your bill.”

Jeremy Deaton writes for Nexus Media, a syndicated news service covering climate, energy, policy, art and culture. You can follow him @deaton_jeremy.