Most of us – over 80% of Victorian households – use a mix of fuels at home, namely electricity and gas.
However, as the world transitions to renewable energy and electric appliances continue to become more efficient, households will move away from gas and become increasingly all-electric.
Households that plan for this transition and actively participate can benefit most. Yet the upfront cost of going electric can be significant. So having a plan that’s tailored to your home, and making the most of rebates and other financial options, is key.
In this article, we’ll look at the potential savings from electrifying your home, as well as the costs involved and the steps you can take to make the transition in the most cost-effective way.
Could you save money by electrifying your home?
The average annual gas bill in Victoria ranges from $2120-$2240. This is a combination of usage charges and daily supply charges.
The best time to consider upgrading to efficient electric appliances is during a home renovation or when your existing gas appliances are nearing the end of life and need replacing. Households that could enjoy the most significant long-term savings by phasing out gas include:
- Households with rooftop solar, who can swap their gas consumption costs for free solar power.
- Households with a lot of gas appliances and larger gas bills, who could stand to save more money on their bills.
- Households that can afford efficient electric appliances, which cost more upfront but less to run over the long term than inefficient appliances.
Households that only use a small amount of gas, for example for cooking only, could also benefit as most of their gas bill is likely the daily supply charge. This could be immediately eliminated by switching to electric cooking and removing the gas connection.
How much could you save by going all-electric?
Long-term savings from moving to electric appliances will depend on many factors, including how many appliances you replace, when you replace them, the efficiency of the new appliances, whether you have solar, how much energy you use, and more. However, most households will save money over the long term by going all-electric, particularly in Victoria.
Source: Getting off gas: why, how and who should pay?, Grattan Institute
The Victorian Government has produced an example scenario, breaking down the costs and savings for an existing solar home moving from electricity and gas (duel fuel) to all-electric. It says:
"Converting an existing home with solar panels from gas to electricity can save around $2000 a year on energy bills."
- Victorian Government, December 2024
Electrification is a long-term strategy for most people. Unless you’re renovating or building a new home, most people are unlikely to electrify the whole house in one go. But savings can start coming in from the first appliance you replace, so calculating which appliance upgrades will deliver the most significant savings is an important factor in deciding where to start.
Why will going all-electric save money?
- Gas prices are rising: Gas prices have increased by 22% in Victoria since July 2022, the largest increase of any jurisdiction in Australia.
- Gas network costs will increase as more people transition off gas: Gas distributors pass the (largely fixed) cost of maintaining the network onto consumers. As more households move off gas, there will be fewer customers to share these costs, increasing bills for the remaining gas customers. Energy Consumers Australia’s Stepping Up report shows gas bills will likely increase significantly from 2030 for this reason, more than doubling between now and 2050.
- Electric appliances are cheaper to run: These days, electric appliances are generally more efficient than their gas counterparts. This means they use less energy to do the same job, making them significantly cheaper to run.
- Even bigger savings with solar: If you have solar panels, you can power electric appliances using free solar energy from the sun.
Other benefits of going all-electric
- Reduce your carbon footprint: All-electric households generally produce less emissions than those that use gas. This is especially true for those with solar panels. In fact, to meet the Federal Government’s climate commitments, Energy Consumers Australia says “all of Australia’s households will need to decarbonise their energy use by 2050.”
- Electricity is better for your health: Gas stoves release pollutants that irritate the lungs. Cooking with gas has even been linked to childhood asthma. Gas ducted heating can also produce poorer air quality compared to electric split systems, which are safer and cost less to run.
How much does it cost to go all-electric at home?
While all-electric homes save money in the long term, there are upfront costs to weigh up when making the switch. These include:
- The cost of the appliances
- The cost of installation
- Any upgrade works required on your home
- The cost to disconnect your home from the gas network
Cost of electrification: Appliances & installation
Generally, efficient electric appliances cost more to purchase than their gas counterparts.
Induction stoves can be $400 more expensive than gas stoves and hot water heat pumps can be $1550 more than instantaneous gas systems. However they also cost less to run – heat pump hot water systems, for example, use up to 80% less energy.
When deciding on an appliance, it’s important to consider the purchase and installation costs as well as the longer-term operating costs to determine overall savings. Households that get efficient appliances stand to save more from electrifying their homes.
Source: Getting off gas: why, how and who should pay?, Grattan Institute
To help overcome the upfront cost, the Victorian Government offers several rebates and incentives on efficient electric appliances, as well as solar panel and battery systems.
While solar and batteries aren’t vital to electrification – you can still get off gas without them – they often make sense for all-electric homes as they can significantly reduce electricity bills and household carbon emissions.
As with appliances, the cost of these systems varies depending on the components, size and brands.
A common size solar panel system for a household of 3-5 people is 6.6kW (around 15 panels). As a benchmark, these systems often start from around $5000, however prices can vary depending on your installer. For example, RACV Solar offers 6.6kW solar systems from $3560*.
Add a battery and the price will increase: You can expect to pay around $1,000 - $1,200 per kWh of battery storage. So, for example, a 6kWh battery might cost around $7,200 ($1,200 x 6 = $7,200).
Cost of electrification: Electrical upgrades
Some households may need to upgrade their home’s electrical wiring and/or switchboard to accommodate the increased electricity load from moving gas-powered appliances onto electricity.
Households that have an older or smaller electrical switchboard may need an electrician to upgrade the switchboard to improve safety and/or allow for more appliances to connect to it. This could cost up to a few thousand dollars.
If the household's electricity usage is big enough, for example perhaps you need to charge an electric vehicle, you may need to upgrade from single-phase to three-phase power. This can cost between $4500 and $6000.
Installers will assess your home and inform you if any additional work is required. A good installer should also discuss your future electricity goals and work with you to prepare your home for the future.
Cost of electrification: Gas disconnection
Once you’ve replaced all your gas appliances with electric ones and your home no longer uses any gas, you can disconnect your property from the gas network altogether. This will mean you don’t have to pay gas supply charges and can eliminate your gas bill completely.
There are three options to disconnect your gas:
- Abolishment: This is the most comprehensive option for permanently disconnecting your home from the gas network. The gas meter will be removed and the service pipe permanently disconnected from the street. This usually costs a few hundred dollars.
- Disconnection: A less permanent option, disconnection involves locking and installing a plug in the gas meter outlet. Disconnection stops the flow of gas to the property but allows the connection to be re-used again in the future. This is commonly used during renovations and usually costs less than $100.
- Meter removal: Alternatively, the gas meter can be removed while the service pipe is left in place. This is more common in apartments where other occupants still require a gas connection. Depending on your network, this can be free of charge or cost up to a few hundred dollars.
How to offset the upfront cost of going all-electric
Whether you’re building, renovating or replacing appliances over the long term, have a plan to electrify in the most cost-effective way. Our top tips include:
- Replace appliances when it makes sense
- Get the most from rebates and incentives
- Investigate green loans and financing options
- Minimise the amount of energy your home uses
- Use free, renewable energy
Replace appliances when it makes sense
Unless you’re renovating, replacing multiple, good-condition gas appliances all at once can be costly and potentially wasteful. However, if you replace them over time as they reach their end of life, you effectively eliminate the additional costs associated with buying and installing a new system, as you’d have to do it anyway.
The key is to be prepared. Most people don’t have time to research their options when an appliance breaks down unexpectedly, so they end up replacing their gas appliances with a like-for-like equivalent that they’re then stuck with for another few decades.
Research your appliance options now so you’re prepared with the system(s) you’d like to put in when it comes time to replace.
Get the most from rebates and incentives
In Victoria there are several rebates, incentives and discounts available to help you replace gas appliances and install electric systems. These can help with the upfront cost of everything from solar systems to electric appliances. In some cases, you may even be eligible for multiple savings from different programs. In Victoria, these include:
- The Solar Homes Program, offering rebates and/or loans on solar panels, batteries and hot water systems.
- The Victorian Energy Upgrades Program, offering discounts on energy-saving products such as heating and cooling systems, cooktops, window glazing and more.
So do your research and make sure you ask your installers about the rebates available to you.
Investigate green loans and financing options
0% loans and other financing options are available for energy efficient products and systems, assisting with the upfront cost of the upgrades. This helps households access efficiency improvements sooner to start reaping the savings, which can be used to help pay off the appliance over time.
Minimise the amount of energy your home uses
Energy efficiency measures like insulation, draught proofing and window glazing go hand in hand with electrification as they reduce the amount of energy your home uses. The more energy efficient your home, the less energy it requires to stay comfortable. So you can reduce your bills, your carbon footprint and enjoy a more comfortable home.
Use your own free renewable energy
The most significant energy bill reduction comes by reducing the amount of energy you buy from the grid. Ensuring your home is energy efficient is a key step, however the best way to reduce your reliance on the grid is by using free solar energy from your roof instead.
Solar panels and a battery allow you to generate your own renewable electricity and store it so you can run your home on solar power day and night. It’s also the only way to run your home on 100% renewable energy, as the electricity you buy from the grid is a mix of renewable and non-renewable sources.
Households that transition off gas to all-electric with solar and a battery can come close to eliminating their energy bill entirely. Plus, with an electric vehicle charged with solar power, you can drastically reduce your car running costs too.
With over a third of Australian households already equipped with solar on the roof, and solar costs continuing to come down for those that are yet to install, it’s a huge advantage when electrifying and trying to reduce energy bills.