From Electricity Savings to Investment Growth: A Thought Experiment

The Device That Pays For Itself — And Keeps Paying

A Shelly Plug S Gen3 costs around €25. Connected to a 200-litre water heater and managed by Elewatt, it runs the heater exclusively during the cheapest hours of each day — typically 1am–5am, when Nord Pool spot prices in Estonia are lowest.

The math works out like this: a 2 kW water heater running for 3 hours costs roughly 2–3 times less per kWh at night than during morning peak hours. Over a full year, the difference in electricity cost for that single device adds up to €400–500. The device pays for itself in under three weeks. After that, it is generating pure savings every single day.

The Thought Experiment

Now here is the question this article is really about: what if, instead of letting those savings disappear into everyday spending, you treated them as a fixed investment budget?

€260 per year is €22 per month. On its own, that does not sound like much. But invested consistently over a long period, compound interest turns it into something that surprises most people.

The table below shows what €260/year grows to over time, assuming you invest it at the start of each year and leave it untouched.

Assumes €260/yr invested at the start of each year, compound growth, no withdrawals. 5% approximates a conservative balanced fund; 7% approximates a broad global equity index fund long-term average. Returns are not guaranteed.

The Estonian Advantage: III Sammas

For Estonian residents, there is an extra layer to this thought experiment: the third pillar pension (III sammas). Contributions to a voluntary pension fund are deductible from your taxable income — up to 15% of your gross annual income or €6,000, whichever is lower.

At Estonia's 22% income tax rate, investing €260 into a third pillar fund gives you approximately €57 back as a tax refund. Your net cost is just €203 — but your invested amount is still €260. That is a guaranteed 28% return on your first euro before your fund earns a single cent.

If you reinvest the tax refund as well, you are investing ~€317 per year for the out-of-pocket cost of €260. After 30 years at 7%, that grows to roughly €29,944.

Keeping It in Perspective

None of this is a recommendation. Whether to invest, where, and how much depends on your personal circumstances, income, existing savings, debts, and risk tolerance — things only you (and ideally a financial advisor) can assess.

What this exercise does show is that the compounding effect of a consistent, modest annual contribution is significant over long time horizons. And electricity savings are a real, recurring source of that kind of modest annual sum.

The first step is reducing the electricity bill. The second step — if and when it makes sense for you — is deciding what to do with the difference.

Start Here: Get the Savings First

Before any of the above becomes relevant, you need the €260/year in savings to exist. That starts with smart automation — connecting your water heater, EV charger, or other high-consumption devices to a system that acts on real electricity prices.