Those water heaters you install in customers' homes could be used for a lot more than hot showers, say some researchers.

There's a new movement calling for grid-interactive water heaters that could essentially act as energy storage units. As the Tesla Powerwall stores energy in a charge, hot water heaters store energy in heat. They can also be heated at night when power is cheap.

Grid-interactive water heaters (GIWH) are electric water heaters that the grid operator or the local utility can control in real time (or the customer, automated software, or a third party could control them in response to granular retail price signals from the utility). This controllability makes a GIWH valuable for more than just hot showers. For example, in addition to heating water when power is cheap, it can also shut down during yearly system peaks, help integrate renewables, and provide services to the electric grid like frequency regulation. Optimizing water heaters like this can significantly reduce carbon emissions and, as explained below, create billions of dollars in value.

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