Here's a simple project you might want to try if you have a backup generator or power your house with something other than utility power.
The goal is to level out the peaks in your power usage. Peak load is what you usually have to engineer your system for. What is your home's worst-case power load? For most of us, it's when the major power hogs in the house are both on at the same time. In this case, the hot water heater and the central air conditioner.
Why would you want to level your loads? Sometimes it might be to get away with a smaller generator, transfer switch or maybe your Prius generator. It also makes sense in other times too. Making your major appliances take turns lowers your effect on the power grid. Like you, the power companies have to engineer their system for the worst case. One or two homes doing load leveling won't save us from a new power plant. But if this concept is mandated for new homes, it could start to make a difference.
Let me make sure I don't over sell this concept. You won't save electricity. Your bills will NOT go down. Instead you'll be reducing the peak power your home is using at any given time. If you have a peak demand meter (rare in residential systems) then you might save money.
You're doing this for other reasons. For example, if you run your whole house on a generator, you might hear it slow down when the A/C kicks on. That's a peak. If your hot water heater happens to be on at the same time, that's a lot of work for your generator to do. To avoid these peaks, the project makes them take turns.
The key to this project you already own. Your central air conditioning system likely uses a thermostat that activates the compressor when your house is getting warm. When we're done, it will also tell your hot water heater to take a break for a few minutes.
You'll be adding a simple relay. It opens, or turns off, the 220 VAC going to your hot water heater whenever the air conditioner needs to run. Since a/c systems use low voltage (24 VAC) to control things, this makes the wiring very simple and safe. The 24 VAC that tells the compressor to come on will also tell the hot water heater to go off.
Skill level: A small part of this project will require you to work with hazardous voltages. Don't attempt this unless you're totally comfortable with things like changing circuit breakers wiring up a new stove. It's more risky than putting a new plug on a lamp, but easier than installing conduit. If you're not totally comfortable with this project, don't risk it. Get a licensed electrician to do the work for you.
Downsides: Every project to save power has some downside. In this case, your hot water heater is now a slave of your A/C. Some situations when you might notice this system doing its thing:
You come home after a long trip and want to take a shower. When you turn your A/C back on, its going to run a while. All that time the hot water heater will be wanting to come on but can't. You'll get the hot water that was in the tank, but not any more. Keep the shower short and you'll be fine.
Your A/C is getting old and it's having to run most of the day because it has lost its efficiency or has some problems. Save your money and get a new A/C instead. That WILL save you money.
If your A/C is working well, it may only be on 20% of the day, even on the hottest days. The other 80% of the time your hot water heater will be able to heat water.
Your new relay module will be powered by the compressor leads. You can connect in parallel in a few places. The air handler is where almost all the A/C wiring meets and that's where the transformer is. This is usually the best place. The two leads you need to connect to are also in the compressor unit outside. You can tap off there too. The best one for you will likely depend on where your A/C and HWH are located. The thermostat location may or may not work. While the switch for the compressor is there, the common lead may not be.
The relay is designed to be mounted in one of the 1/2" knockouts near the HWH. The leads all go into the box. The two for the 24 VAC control lead come out of the box and then run to where you're tapping into the A/C control leads. You can use conduit if you want to, but low voltage leads like these can be run in jacketed thermostat cable. Just protect it from damage.
You want to use the Normally Closed leads to open the one side of the 220 VAC going to the heater. Since it's 220, opening either lead kills the current flow. The relay will energize when the compressor comes on. That will break the power to the HWH. The red LED shows when the HWH has been inhibited. You might want to mark it as such or someone will think it means the HWH is on.
This relay breaks power to the HWH. It doesn't make it stay on, it just allows it to be on if it wants to be on because the water is getting cold.
I should mention that the relay uses power. It consumes .075 of an amp only when the A/C is on. Compared to what your A/C is using, .075 is next to nothing.
While you're doing this project, consider adding some protection for your compressor. Get one of these delay-on-make timers.
When the power blinks, this simple device keeps your compressor off for a few minutes. Compressors hate fast on-off-on cycles. Adding one of these can protect your compressor from damage when the power is getting shaky. This timer can be installed in the compressor outside or in the air handler. It goes in series with the compressor leads, so it breaks the connection for 5 minutes when the power comes back on. It's also great for generators. When you start up, it will let the generator stabilize with the other house loads. 5 minutes later the A/C load comes on.
If it's easy, put your HWH inhibit connection before this device. HWHs really don't care if the power bounces. They're not motors so they can handle a quick blink. While your A/C is taking a 5 minute time-out, you can get more hot water.