How to shrink a $5,000 annual energy bill to $500

How to shrink a $5,000 annual energy bill to $500

This is the story of how we seriously cut our family’s energy bills. We’re a regular suburban family that enjoys our mod cons. There was no way we were heading off to live in a self-sufficient mud hut – not that there’s anything wrong with that. So how did our family shrink our annual energy bill to under $500?

I’d like to share my journey to show how you can take control of your energy and reduce costs dramatically without having to make major sacrifices to your lifestyle. It’s very doable. Yet surprisingly, you don’t hear a lot about this. But it’s happening more and more.

“We started with a longer-term perspective, always looking for efficient and cost-effective ways to save energy, from the little things to the biggest things.”

The little things

We moved to our current location on the outskirts of Sydney in 2004 and lived in a fibro house with wooden floors throughout. The housing had literally no insulation from outside temperatures of below 5C in winter and above 40C in summer. Inside the house, temperatures would drop under 10C on the coldest nights and be well over 30C on the hottest days.

Because the house cladding was full of asbestos we weren’t keen to renovate. We’d always talked about knocking it down and building a decent house when we could afford to. So, we treated the house a bit like a rental. We changed light fittings to compact fluorescents (LEDs were too expensive and too dim), strung up blankets against the windows in all the bedrooms and only heated the bedrooms and bathrooms in winter. The extra insulation in the bedrooms helped in winter and in summer but we still had heaters running all night in winter in the bedrooms and went to the local shopping centre or spent time with family in summer to avoid the hottest days.

The bigger things

As a one car family with both my partner and myself working, I’d been riding a 600cc motorbike to work for a few years. The bike was fun on the twisty roads but as a commuter bike, it was overkill. I was also working in the city, so catching the train was cheaper and more relaxing. It was an obvious choice to sell the sports bike and buy a scooter to ride the 4km to the local train station. So I bought an electric Vectrix scooter and used that for short trips for 5-6 years. A bigger purchase no doubt but after selling the sports bike and the savings on petrol and more particularly maintenance, the electric scooter paid itself off after 3-4 years.

Over time, appliances started to wear out and we had the opportunity to take advantage of better technologies. We installed our first heat pump hot water systems in around 2010. It cut our off-peak hot water bills in half. Not too much later our power-hungry dryer packed it in. As a result, we made the investment in a heat pump dryer with a six-star energy efficiency rating. The new dryer reduced the running costs by more than half. In less than 5 years we got the additional upfront cost back from electricity saved.

The biggest things

In 2012, after 8 years in our fibro home, we finally had some savings to build a home.

We wanted the new home to fix the biggest problems with the old home. It was too hot in summer and too cold in winter. Our budget meant we could afford a package home with a little bit of money left over for some “upgrades”. After wandering around Home Display centres, we found a few designs that we could make work. It was a big challenge orientating the house to the north, but we were able to swap some rooms around to make it work. We installed double glazing on every window in the house and R4.0 insulation in all the external walls and in the ceiling. While it may not be an 8 star rated architect-designed eco-home, it is still carbon negative thanks to a massive north facing roof.

The house took 9 months to build and that’s when the fun started. We wanted to make the house comfortable with low energy costs right from the outside so we:
– installed an 11kW solar system
– installed three phase air conditioning
– installed induction cooktop
– installed 3 phase 32A power to the garage for charging electric vehicles (EV)
– installed thick curtains throughout the house
– built a deck on the northern side providing shade to the level below
– installed an energy monitoring system to understand our electricity consumption and generation
– moved to a Time Of Use tariff as we had plenty of “shiftable loads” including the hot water, EV charging and air conditioning

Seeing the results inspired more changes

Our electricity bills dropped dramatically and we were getting credits in the summer months. Over the next four years, we replaced our gas car and electric scooter with a Nissan Leaf (EV), Mitsubishi Outlander Plug-in Hybrid (PHEV) and a Zero SR electric motorcycle.

Even after all those changes, we were exporting twice as much electricity as we imported. Our electricity bill was under $400 per year. And since July 2017 despite the 20% electricity price increases in NSW, our electricity bill actually fell by $150 p.a. due to the increased solar feed-in tariffs from our large solar export.

There are plenty of other savings from the choices we’ve made including lower servicing costs for EVs and only having to visit a service station every 2 or 3 months. And the social and environmental benefits from these choices are great as well – no loud noise from petrol garden tools, no smoke from fireplaces and a dramatic reduction in our family’s carbon footprint compared to our old home and lifestyle.

The seven energy-saving actions that matter

To wrap up, here are some of the key steps we took:
1. add solar panels
2. better insulate your home
3. buy high-efficiency appliances
4. use reverse cycle air conditioners for climate control and heat pump water heaters and dryers
5. replace petrol powered machines with electric (start with the mower, trimmer hedger, blower etc trust me you won’t go back)
6. consider an EV as a second car or if you have the budget for a longer range EV, your primary family car
7. replace compact fluorescents, halogens and incandescent globes with LEDs (they’re much more affordable these days and easy to find at supermarkets and hardware stores)
Each of these actions has a very real pay off, and we can attest that they make a difference. I know that there are elements of our journey that you could implement into your own lifestyle to achieve similar savings in money, energy and pollution.

The pay off to our energy saving journey

So it’s been a ten-year journey to run a household which offsets more carbon than we create. Now, our energy bills are well under $500 and we enjoy a comfortable four bedroom home, two cars, a motorcycle and use air conditioner up to six months of the year. If we had petrol vehicles, used gas for cooking and heating, along with inefficient appliances the energy costs would be at least $5000 p.a. That’s a 90% reduction in cost and even greater reduction in CO2 emissions.

There are no wild claims. Just solid economics. It’s fair to say that it won’t happen overnight (unless you have a significant amount of idle savings) but if you take a longer-term view and make the right decisions along the way, you will find yourself with all the energy you need and very small bills. Sure, there are investments along the way, but the accountant in me knows that all the choices we made will pay for themselves with a very safe tax-free return. And you’ll be enjoying the benefits of a comfortable home and low energy costs for many years to come.

I’m obsessed about energy saving. Over the last decade I’ve cut my families energy bill from $5000 to under $500 per year. I’m an EV enthusiast, racing electric motorcycles and developing fast battery chargers.