Electric water heaters, just like air conditioners, can be controlled by utilities to cut peak power demand.

But unlike air conditioners, pool pumps, clothes dryers or refrigerators, water heaters can also store energy in the form of hot water – and that could make them additionally useful in storing renewable power from such intermittent sources as wind farms.

Those are some of the conclusions of a new report from the Peak Load Management Association, a group representing utilities, smart grid, demand response and energy companies.

About 53 million homes in the United States, or 42 percent of the total, use electric hot water heaters, the report found. Added up, they account for 13 percent to 17 percent of nationwide residential electricity use, the report found.

Controlling water heaters to shave peak demand is not new. Several million homes in the country are hooked up with such controls by utilities as Portland General Electric, Great River Energy and others – a smaller share than those with remote-controlled air conditioners, but still a sizeable piece of today's demand response market.

But if only a quarter of the remaining electric water heaters could be fitted out to turn off at peak demand times, that could save the country about 5.3 gigawatts of peak power demand – and that equates to a $424 million savings in costs of producing that peak power, the report found.

That's the first and most obvious benefit to turning off water heaters during peak electricity demand times. Because most water heaters store their heat with a high degree of efficiency, customers in pilot programs haven't reported any widespread negative effects of losing hot water over the one-hour curtailment the report assumed.

Going to longer periods of curtailment, as is done in programs from Minnesota utility Great River Energy, does require larger and more efficient water heaters to avoid losing hot water when it's wanted, but can save even more peak electricity and money, the report found.

That ability to store energy makes water heaters a good candidate for storing renewable energy generated during off-peak hours, the report said.

The most obvious application would be storing power from wind turbines, which tend to be most productive at night, the report found. That could be beneficial to a state like Texas, which has the largest share of wind power in the U.S. and has already seen some trouble finding ways to put it to use (see Texas Wind Farms Paying People to Take Power).

But to do that more effectively, water heaters would need to run hotter than the standard 120 degrees Fahrenheit, which would require additional controls to mix cold water with that hotter-than-usual water to avoid scalding people in the shower or other such mishaps, the report noted.

It would also require some kind of utility-to-home communication, such as through smart meters or through so-called "direct load control" switches that give utilities the ability to turn them on and off.

Direct load control is how most demand response for home appliances is handled today. But of course, most of the utilities deploying tens of millions of smart meters around the country intend to extend communications from those meters into homes to interact with a new generation of "smart" appliances that could give customers more control – and thus, expand the pool of people willing to use them.

Those could be set by customers to power down during peak hours, or perhaps programmed to automatically power down when peak energy prices rise – though such variable pricing systems are still in their infancy.

"Smart" water heaters are already being produced by General Electric, which rolled them out last month (see New York Times' Green Inc. blog).

More smart appliances are to come – Whirlpool intends to make one million smart clothes dryers by 2011, and GE has a line of appliances it wants to bring to consumers in the coming years (see Whirlpool Plans 1M Smart Dryers by 2011 and GE's Smart Appliances: Smarter With GE Home Energy Manager).

But just how these smart appliances will integrate with different utility-to-home communication systems being contemplated by utilities remains an open question (see Green Light post and Utilities Mull Price Points, Policies for Home Energy Management).

Duke Energy is also looking at hot water heaters as one of many means to balance out more moment-to-moment changes in power produced fromsolarpanels, David Mohler, the utility's chief technology officer, said.

"What I could do is come up with an algorithm to vary the power draw on the heating element on the hot water heater and use that to balance the fluctuation of the solar panel output," he said. "We're still grappling with how to orchestrate that."