Gas is now the expensive way to run a Victorian home

What you can save switching from gas to electric

A new home built all-electric costs about $990 a year less to run than the same home with gas — and that's without solar panels. Add solar and the saving rises to about $1,920 a year.

An existing home that moves off gas entirely saves about $1,900 a year, or $2,230 with solar.

These are just the averages, so your exact savings will depend on your specific home and appliances.

Heating: gas ducted vs reverse-cycle

Heating is where most Victorian homes use their gas, and because electric alternatives are now so efficient — this is where you can get the biggest savings.

A reverse-cycle air conditioner doesn't make heat by burning anything, it moves warmth from outside to inside. So for every unit of electricity it uses, it puts out four or five ‘units’ of heat (you might see this referred to as 500% efficiency). Even the best gas heaters lose some of their heat through the flue and the ducts (so they are less than 100% efficient).

Victorian Government figures for heating a 220-square-metre home:

• gas ducted heating (6-star): $3,036 a year
• a reverse-cycle multi-split system (2.5-star): $1,269 a year

That's more than $1,700 a year, and the electric system in that comparison isn't even a high-efficiency model.

Hot water: gas vs heat pump

Hot water is the second-biggest gas cost in most homes, and the simplest one to change.

A heat pump hot water system works like a reverse-cycle air conditioner, but for water. For a household of four it costs $35 to $275 a year to run. Gas hot water for the same household costs $555 to $820.

A heat pump system costs around $3,800 installed, but rebates bring that down to about $1,500 for a typical household. With savings of up to $400 a year compared with gas, it pays for itself in around four years.

If you're on Victoria's Midday Power Saver (or the Solar Sharer offer in NSW, SEQ, and SA), you can put the heat pump on a timer when your electricity is free.

Cooking: keeping your gas cooktop is an option

You don't have to give up your gas cooktop. Some people prefer cooking with gas, and cooktops make up a tiny part of your gas bill — about 98% of the gas a Victorian home uses goes on heating and hot water.

However, the reason to consider switching to an electric or induction cooktop is because once nothing in the house runs on gas, you can stop paying to stay connected to it. That alone is worth hundreds of dollars a year. Here's how much you might be paying just to be connected.

Rebates for switching from gas in Victoria

The Victorian Energy Upgrades program can take a big bite out of the upfront cost:

• up to $5,530 off replacing ducted gas heating with ducted reverse-cycle
• up to $1,610 off replacing a non-ducted gas heater with a split system
• up to $140 off an induction cooktop

On government figures, replacing ducted gas heating saves up to $1,140 a year, so it pays for itself within a few years. Swapping a single room's heater saves up to $460.

You don't have to switch everything at once

The cheapest way to do this is to replace each gas appliance when it wears out, not while it still works. Start with heating and hot water, since that's where the money is. Leave the cooktop till last, or keep it.

The one thing that doesn't make sense is buying a new gas system when your old one dies. You'd be paying gas prices on it for as long as it lasts. Gas prices aren't coming back down.

Our paper on the cost of gas has the full evidence.

The more of your home that runs on electricity, the more the free hours are worth to you. Our check takes about a minute and tells you whether you can get them.

Check if you can get free electricity from 11am to 2pm →