Victoria’s planned gas phase-out is becoming a key election issue, with the Coalition and One Nation pledging to wind back plans to stop new homes being connected to the gas pipeline.
But research and local examples show switching from gas to efficient electric appliances can cut household energy bills.
What’s the plan? Introduced in 2022, the Victorian government’s Gas Substitution Roadmap, will require new homes to be all-electric from January 1 2027.
From March 1 2027, if an existing household gas hot water system fails and cannot be repaired, it must be replaced with an efficient electric alternative.
If you own a rental property, that extends to heating as well, should the system break and cannot be repaired.
Local savings: David Unwin lives in Creswick, and purchased his home in 2021. The house was built in the mid 1980s, and a large amount of appliances had been electrified - except the heating.
“I’m one of those people that researches everything to the umpteenth degree,” Unwin told the Brolga with a laugh. “It’s something I couldn’t do in rental properties, so basically when I bought the house it's a journey I wanted to start for myself.”
Environmental impact was another priority for Unwin, stating he “wanted to decarbonise where he could”, but the associated savings were also a big factor.
The costs: Unwin said when he first moved into his home, the gas bill was $1,200, bringing the total gas-electric combined bill to $2,500.
“In the Ballarat region, you’re running the heater for 6 months of the year,” he said. “I was just gobsmacked, and it really made me look at it urgently”.
Unwin elected to make the switch to a reverse-cycle air conditioning unit. Now, his bills are closer to $1,400 for the electricity of the entire home - savings of just over $1,000 per year.
“Upfront costs are the biggest obstacle, but the savings have been huge”, Unwin said, noting a low-interest green loan helped keep upfront costs for a new hot water heat pump system down.
Installing interest: The founder of electrification support company Powrhouse, Tim Johnston, said there was “definitely” an increase in the interest from homeowners and renters in replacing gas water heaters with electric heat pumps.
🗣️ “Everyone is interested in cheaper running costs … and reducing their bills,” he told the Eastern Melburnian.
Expert analysis: Grattan Institute energy and climate change program director, Alison Reeve, said its 2023 research found Victorian households could save between $1,200 and $1,400 a year by replacing gas cooktops, water heaters and heating with efficient electric alternatives.
“The result of unwinding the gas roadmap for Victorians will be a higher cost of living for more households, particularly renters,” she said.
Cost improvements: According to the Institute for Energy Economics and Financial Analysis, residential electrification initiatives in Victoria have reduced household energy bills by $185 million since 2023.
Environment Victoria senior climate and energy advisor, Kat Lucas-Healey said research showed replacing an old gas appliance with a new one “locks in high bills for another 15 to 20 years”.
What others said: The Victorian Liberals have promised to abandon the requirement for households to replace broken gas hot water systems with an electric alternative.
The Coalition’s spokesperson on energy and emissions reduction, David Davis, said “Labor’s gas ban will cost many families tens of thousands of dollars”.
The Eastern Melburnian contacted Davis to seek clarification on the basis of these claims, but his office did respond before publication.
One Nation has also pledged to scrap restrictions on gas connections in new homes, but has not detailed its position on existing gas systems.
What’s actually changing? Reeve said she believed the Coalition’s claim that replacing systems would cost families “tens of thousands of dollars” and represented a “gas ban” was “prone to misinterpretation”.
🗣️“No one is being forced to replace their cooktop,” she said. “The replacement [of gas water heaters] only has to be done when the existing water heater breaks. It can be repaired if it breaks down, and if you take a gas water heater out during a renovation, you can put it back in.”
Note: This story has been syndicated and localised from the Eastern Melburnian.