Hot water as a service
There is a growing trend in new strata developments to setting up hot water as a service. Rather than an asset.
Traditionally the developer would install a centralised hot water system. The system would be part of the central building services. The system would be supplied by gas (typically), the hot water usage of each apartment would be sub-metered by the gas network, the gas network operator would calculate the gas usage to provide that hot water, and each apartment would be billed for the gas associated with its hot water usage.
Under this system each apartment can choose its gas retailer. They have freedom of choice. Apartments may have a gas account that includes both their hot water, and their gas used for cooking (or gas heaters). Apartments can switch between gas retailers to find the best deal available in the market. Apartments may also choose a carbon neutral gas product.
The building can upgrade the hot water system, for example more fro a gas hot water system to an electric heat pump centralised hot water system (these are cheaper to run).
Under a new system. The hot water system is installed and owned and operated by an energy provider. For example Seene (part of Energy Australia). The hot water usage of each apartment is sub-metered and the hot water operator will charge each apartment for its hot water usage (c/kL).
Apartments do not have freedom of choice, they are sold hot water by the hot water operator. They can not shop around for a better deal.
The apartment building may not have the freedom to upgrade their hot water system. And the apartment building may not be given any information on the efficiency of the system. Apartments are changed per kL, and there is no information given on the energy consumed to generate the hot water.
As energy consultants with 15 years experience in strata. It is clear that the way hot water is billed, with no information on energy usage, it is very difficult to determine if the site is getting a good deal.
There are some benefits to hot water as a service. However it appears that a developer setting up hot water as a service is primarily designed to help the developer and the energy provider. It can save the developer costs (if the hot water system is owned and installed by someone else), and give the energy provider (hot water service provider) a building of locked in customers. Some developers may even get some ongoing cost-benefit.
It is clear that the growing trend of hot water service is not primarily focused on helping apartments reduce their energy costs, or reduce their energy usage and greenhouse emissions.