Traditional Storage Cylinder
Typically a thermostatically controlled electric element heats the water to at least 60°C then it switches off allowing the water to cool. When the temperature falls below a preset level the thermostat switches the element on again and the process repeats.

Standing Heat Loss
The main drawback of the design is that cyclically heating water to a preset level and allowing it to cool off and then reheating it again wastes a horrendous amount of energy. Standing heat loss is typically is in the order of 50% in older cylinders rising to about 85% in new versions.

Standing heat loss in older cylinders can be reduced by using a thermal blanket such as the eco-wrap system.

Mandatory Requirements
There are two requirements, which work against each other and contribute to inefficiency.

• Stored water must be heated periodically to at least 60°C to kill bacteria.
• The temperature must be reduced to 45-52°C before delivery, for safety reasons.

Matching
For maximum efficiency the hot water system chosen must be matched to the usage patterns of the occupants. Unmatched systems waste energy resulting in unexpectedly high power bills.

Example 1
Where a home is equipped with a very large tank but occupied by only one person who is paying to heat 180 Litres or more. Since the usage is only about 60 Litres of hot water per day the cost of maintaining the mandatory 60°C is artificially high.

To reduce energy costs either turn off the power to the heater periodically and use the stored energy over several days or install a more appropriate system

Example 2
Where a large family occupies a home equipped with a 135-180 Litre tank, the thermostat is often adjusted to maximum in order to get sufficient hot water for the whole family. The standing losses increase because heat escapes faster at higher temperatures causing the element to come on more frequently in order to maintain the higher temperature.

To reduce energy costs, install a more appropriate system.

Water Loss
Other than the obvious leaking water cylinder, which demands immediate attention there are other losses that may occur. These cause an increase in water usage and in extreme cases can cause the heating element to be ON all of the time.

• In low pressure systems a faulty or incorrectly set pressure relief valve does not shut off completely causing a continuous outflow of water through the vent pipe atop the roof or through the pressure relief valve.
  
  
• In cases where the temperature is set too high the water in the cylinder expands and since it must go somewhere it overflows. As the water contracts after being heated the pressure is reduced because the volume becomes smaller so the filling system adds more cold water. In the next heating cycle more water is pushed out of overflow and the cycle repeats.

The remedy here is to repair or replace any faulty valves and adjust the temperature setting to 60°C

Economics
Although the design is fairly cheap to install and maintenance costs are low the ongoing energy cost is very high being in the order of 40% - 45% of all household energy bills over the life of a system.

As stated above, standing losses can be as much as 50% which means that we end up paying for energy we never use.

Conclusion
Obviously, this 90-year-old, one-size-fits-all, standalone, energy-inefficient approach to hot water supply is ill suited to today's energy conscious consumers. Happily, alternatives such as solar hot water, on demand tankless electric systems and heat pumps are readily available.