Nothing to do with encryption - it is always enabled, either with the default passphrase from the chip manufacturer, or with an individual one you set through the utility software, or a random individual one if you use the button pairing method.

Your speed drops are to do with either (A) outdated firmware that lacks reliability or (B) actual disturbances on your mains circuitry, like poorly designed electronics or strong motors in washers, dryers, fridges etc.

Peter, thanks for your reply. It's entirely possible you are right about my mains circuitry. It just occurred to me that one way to test that theory would be to connect a long power adapter from upstairs to my router and homeplug downstairs and completely turn off power on the 1st floor. There is a periodic drop in throughput which occurs every 10-15 seconds, which is suspicious.

On the other hand, I still wonder if encryption could be causing a problem. On WIFI, some people have reported considerable drops in throughput with security such as WPA (10-30%) and WEP (possibly even higher) and in some cases, loss of connection. Couldn't encryption cause similar problems for Homeplugs also?

I'm using wireless AC and I seem to be getting better throughput results, but encryption does reduce performance. My router was set to WPA + WPA2, I set it to WPA2 instead and the performance has noticeably improved.