In this article, Canstar Blue explains centralised hot water systems for multi-dwelling homes and how bulk hot water is utilised to provide individual apartments with hot water.
What is bulk hot water?
A centralised, or bulk hot water system, is used to provide large apartment complexes with hot water, allowing individual apartments to save space. Apartments are individually metered and charged accordingly. This is what happens if you have moved into an apartment and you need to pay for hot water.
Bulk hot water is typically powered by natural gas, where having a gas hot water system in individual apartments is infeasible.
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Here are some sponsored deals from the retailers on our database that include a link to the retailer’s website for further details. These are products from referral partners†. These costs are based on the Ausgrid energy network in Sydney but prices may vary depending on your circumstances. This comparison assumes general energy usage of 3900kWh/year for a residential customer on a single rate tariff. Please use our comparison tool for a specific comparison in your area and to see other products in our database that may be available. Our database may not cover all deals in your area. As always, check all details of any plan directly with the retailer before making a purchase decision. Here are some sponsored deals from the retailers on our database that include a link to the retailer’s website for further details. These are products from referral partners†. These costs are based on the Citipower network in Melbourne but prices may vary depending on your circumstances. This comparison assumes general energy usage of 4000kWh/year for a residential customer on a single rate tariff. Please use our comparison tool for a specific comparison in your area and to see other products in our database that may be available. Our database may not cover all deals in your area. As always, check all details of any plan directly with the retailer before making a purchase decision. Here are some sponsored deals from the retailers on our database that include a link to the retailer’s website for further details. These are products from our referral partners†. These costs are based on the Energex network in Brisbane but prices may vary depending on your circumstances. This comparison assumes general energy usage of 4600kWh/year for a residential customer on a single rate tariff. Please use our comparison tool for a specific comparison in your area and to see other products in our database that may be available. Our database may not cover all deals in your area. As always, check all details of any plan directly with the retailer before making a purchase decision. Here are some sponsored deals from the retailers on our database that include a link to the retailer’s website for further details. These are products from our referral partners†. These costs are based on the SA Power network in Adelaide but prices may vary depending on your circumstances. This comparison assumes general energy usage of 4011kWh/year for a residential customer on a single rate tariff. Please use our comparison tool for a specific comparison in your area and to see other products in our database that may be available. Our database may not cover all deals in your area. As always, check all details of any plan directly with the retailer before making a purchase decision.
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$2,036
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How much does bulk hot water cost?
Similar to electricity or gas accounts, bulk hot water costs are calculated from usage and supply charges. Because most centralised systems are powered with gas, bills and individual meters will be presented in megajoules (MJ). Gas costs vary from state to state, but due to bulk purchasing power, centralised systems can deliver savings to the end user.
While Origin has been the long-term provider of bulk hot water, smaller providers such as Savant Energy also offer bulk hot water. While there may be different suppliers on a case by case basis, you usually don’t get a choice of provider. Either your apartment complex is with Origin or another provider such as Savant Energy. This means that you probably cannot switch energy providers, so you will need to set up an account with whichever provider supplies the complex you live in.
Pros and cons of bulk hot water
Similar to embedded electricity networks, apartment blocks that purchase ‘hot water’ in bulk can deliver potential savings for the individual resident. Rather than having residents individually choose their electricity or gas provider, centralising the system and then metering apartments can be convenient and cost efficient.
Convenience versus choice
If you prefer to choose your energy provider then bulk hot water may be an adjustment. However, if you like having one less thing to worry about, then it may be perfectly convenient for you. It’s important to weigh up the value of having property management liaise with the energy provider on your behalf, with the freedom of choosing and controlling it by yourself.
Metering
The potential issue with metering for a large apartment complex may be incorrect meter readings. You could be charged as someone in a different apartment who has greater hot water usage. Though if this happens, it can be rectified by communicating with the property management group or body corporate.
Tenancy
If you’re entering a lease in an apartment complex, ensure the previous tenant has finalised their account. Centralised hot water systems work smoothly but can be disrupted by a tenant ending a lease, as well as a new lease beginning in the same apartment. Check that you have set-up a new billing account with the apartment’s bulk hot water provider. You don’t want to pay for the previous tenants’ water usage, and the old tenant does not want to be billed for something they no longer use.
How does bulk hot water benefit body corporate, property managers or owners?
Body corporate and property managers or owners significantly benefit from utilising communal hot water through more convenience and risk aversion.
Origin Energy has outlined further potential benefits for those managing a multi-dwelling home with a tenancy agreement:
- Automated billing: The provider usually manages the billing of hot water and individually sends out bills to each apartment. This saves the management group or body corporate dividing up the total bill
- Metering service: Each apartment is individually metered, making for easy usage calculations
- Space-saving: Space within an apartment can be minimal, so having a centralised system means hot water can be supplied without each apartment needinhg a hot water tank
- Lower risk of leaks: Individual hot water tanks can cause serious issues if they spring a leak. Having a bulk hot water tank makes it easier to address any leakage problems, while avoiding water damage for individual apartments.
Is communal hot water a good deal?
Ultimately, communal hot water systems are convenient but remove the tenant’s choice of provider. Bulk hot water is convenient for managers but relies on the tenant activating their account. Even one tenant not activating their account could disrupt the smoothest billing system.
If you are determined to avoid bulk hot water systems and are struggling with your choice of provider, keep an eye out when applying for apartments and avoid any that use centralised hot water systems.
If you wish to compare electricity providers, click on the Canstar Blue link below.
Image Credit: Grand Warszawski/Shutterstock
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