July 31, 2024

Homeowners are increasingly thinking about swapping their gas appliances with electric and are increasingly considering removing their mains gas supply altogether. But while there are many households considering this switch, some might have hesitations.

In 2023, Energy Consumers Australia released Stepping Up, which used modelling by CSIRO to understand the long-term benefits households will receive by going all-electric. This article investigates what households should consider if they are thinking about switching to an all-electric home today.

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• The typical Australian household with mains gas spends around $1,600 per year on gas bills. A household’s actual gas bill will vary depending on their circumstances (e.g. number and nature of gas appliances, the thermal performance, etc.).
• Switching existing gas appliances to electric should reduce energy bills for most households. All-electric homes are also better for our health and the environment.
• The upfront cost of going all-electric will vary depending on individual circumstances. Households that only use gas for cooking would likely face much lower upfront costs to make the switch to an all-electric home than homes that use gas for heating.
• Long-term household savings will vary, after accounting for upfront costs. Households likely to see greater long-term savings are:
  • Households with rooftop solar;
  • Households that consume a lot of gas;
  • Households that replace gas appliances with efficient electric ones.

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The typical Australian household spends around $1,600 per annum on gas

Around half of Australian households say they have a mains gas connection.

Residential gas prices have increased significantly in recent years. Research from the St Vincent de Paul Society finds that households who consume 30,000Mj of gas per year now spend around $1,300 to $1,900 a year on gas. This nearly double what they were likely paying in 2009.

Estimated annual gas bill for a household consuming 30,000Mj of gas – 2009 to 2023

Source: St Vincent de Paul Tariff Tracker

Gas bills are a mixture of consumption and daily supply charges

Consumption charges make up most of a typical household’s gas bill. Typical consumption charges range from 2.5c to 4c per Mj.¹ A household that consumes 30,000Mj of gas in a year will pay around $750 to $1,200 in gas consumption charges.

The remainder the gas bill comes from daily supply charges. Daily supply charges in advertised offers in Victoria include a daily supply charge that is typically around $0.7 to $1 a day ($255 to $365 a year).² Advertised daily supply charges in New South Wales are around $0.5 to $0.8 a day ($183 to $292 a year).³

Gas usage charges will vary significantly depending on how consumers use gas

Gas appliances in the home largely determine the size of a gas bill.

There are three main purposes gas is used for in the home:

1. Space heating
2. Water heating
3. Cooking

Gas space heating is generally the most energy intensive use of gas for a home. It’s relatively common in Victoria, and a typical Victorian household consumes around 50,000Mj of gas per year.

In contrast, a household that only uses gas for cooking will consume significantly less gas per year. Typical households in Queensland only consume around 7,000Mj of gas per year, as they generally don’t use gas for heating.

As shown below, households that don’t consume much gas will generally spend most of their gas bill on daily supply charges.

Example of annual gas bill for different household types

Gas charges	Lower gas user (7,000Mj per year)	Medium gas user (30,000Mj per year)	Higher gas user (50,000Mj per year)
Daily supply charge	$292	$292	$292
Usage charge	$210	$900	$1,500
Total gas bill	$502	$1,192	$1,792

Gas consumption will also vary across households based on:

• How many people live in the household
• The efficiency of gas appliances
• The thermal performance of the home.

Households without mains gas spend less per month on energy bills than households with mains gas

Our Energy Consumer Sentiment Surveys find that Australian households with mains gas say they spend on average around $250 a month on energy bills (electricity plus gas).⁴ Australian households without mains gas spend on average around $150 a month on energy bills.

Average monthly electricity and gas bills for households with and without mains gas

Switching costs will vary significantly based on what gas appliances are used in the home

Individual electric appliance costs will vary depending on brand, size, features and quality.

Research from Choice finds that:

• Induction cooktops range from $515 to $6,349
• Heat pump how water systems range from $2,000 to $7,600 (not including installation)
• Air conditioning units range from $583 to $5,519 (not including installation)

These price ranges are exclusive of installation costs, which will likely vary significantly by household. Additional site-specific costs may also be required in order to go all-electric.

Grattan Institute estimates that a typical household that only uses gas for cooking would need to spend around $2,300 in appliance installation costs to switch to all-electric. In contrast, a household that uses gas for water heating, space heating and cooking could spend upwards of $16,000 on appliance installation costs.⁵

Estimated installation cost of efficient electric appliances

Source: Getting off gas: why, how and who should pay?, Grattan Institute

There are ways to reduce the upfront cost burden of going all-electric

These upfront costs could seem scary and unaffordable. In reality, the gas appliances a house currently uses will reach end of life at some point and will have to be replaced. One approach could be to replace gas appliances with electric when the current appliances are approaching end of life. This would spread the costs of going all-electric over numerous years, rather than incurring them all at once.

Appliance installation costs could be reduced if a household is eligible for government rebates. Various state governments provide rebates on electric appliances for households.⁶

The costs of going all-electric will also vary depending on where you live due to differences in disconnection costs

It’s important that when you switch your home to be all-electric, that gas is no longer supplied either. Your gas distribution network will need to undertake work to safely disconnect you from the network.

There are three ways your home can be disconnected from the gas network:

1. Abolishment: permanent disconnection from the gas network and removal of the gas meter.
2. Disconnection: locking and installing a plug in the gas meter outlet.
3. Meter removal: removing the gas meter but leaving the gas pipe. This method is mostly used in apartments, where other occupants wish to keep their gas connection.

Each of these methods have varying associated costs, which vary by location, as shown in the table below.

Disconnection charges by gas distribution networks

State/territory	Network	Abolishment	Disconnection	Meter removal
VIC	AusNet	$220	$65	–
VIC	MultiNet	$220	$58	$70
VIC/Albury	AGN	$220	$81	$115
NSW	Jemena	$1,500	$145	–
ACT	Evoenergy	$870	$170-$270	–

Most households could be better off by going all-electric, but the amount they save will vary

If you are considering going all-electric at once, then you would be considering whether the longer-term cost savings will outweigh the upfront costs. Research to date finds that for most households, the benefits of going all-electric will exceed the costs, with the level of net benefits varying depending on household circumstances.

The Victorian Government estimates bill savings for going all-electric would vary from $375 to $1,790 per year, depending on the household type and the appliances that are replaced. Climateworks Centre has estimated annual savings from $1,033 to $1,845 for a house that switches to all-electric appliances (plus some thermal performance improvements).

Modelling by Acil Allen in 2020 assessed the net savings achieved from switching to electricity for 12 indicative household types. Acil Allen found that most households reduced costs in the long run by switching to all-electric. There was significant variation in the level of net savings depending on the household circumstance.

But which households will save the most?

Households modelled to save the most money by switching to all-electric are:

• Households with solar panels. These homes could replace gas consumption with free energy from their solar panels
• Households that could afford to replace gas appliances with efficient electric ones (specifically heating appliances). Efficient appliances, while more costly upfront, were cheaper to run in the long-term than cheaper energy inefficient appliances.
• Households with large amounts of gas consumption. Households with gas heating will find it beneficial to switch to efficient reverse cycle air conditioning units.
• Households who only use gas for cooking. A household that only uses gas for cooking will be mostly paying daily gas supply charges. These costs could be immediately avoided by going all-electric.

Two of the twelve household types that switched to all-electric were modelled to be worse off. These households couldn’t afford the cost of efficient appliances and instead went for cheaper, less energy efficient appliances. In the long run, these houses were forecast to lose out due to higher ongoing running costs. All other household types were better off.

As discussed above, gas prices have increased significantly since Acil Allen’s analysis in 2020. Grattan Institute’s more recent analysis also found that most households would save money by going all-electric. See Grattan’s estimate of the total 10-year savings achieved from going all-electric (after accounting for installation costs) below.

Estimated range in savings from going all-electric over ten years by location

Note: Savings account for upfront cost of installation
Source: Getting off gas: why, how, and who should pay?, Grattan Institute

Cost savings will increase as households disconnect from the network

While it may not make sense for a household to switch off gas now, there will likely be a time in the future when it does make sense. All households should plan how they will go all-electric so they’re ready when the time is right.

Residential retail gas customer number growth has slowed in recent years, and this will likely continue. At some point, the number of customers requesting to disconnect from the gas network will exceed the number of customers connecting to it. This will mean overall customer numbers in a region will decline, which is already happening in the ACT gas network.⁷

Gas network costs account for around 33-62% of retail gas bills, depending on location. When customer numbers decline in a region, there are fewer customers remaining to pay largely fixed costs to maintain the gas network. Having fewer customers to share the costs means those who remain have to pay more. This increases network costs and retail bills.

Increased cost savings could create a self-reinforcing effect

Rising gas bills will make it more attractive for households to switch away from gas, creating a potential self-reinforcing effect. Acil Allen describes this effect:

As the number of customers using the gas network declines, so does the gas distribution network’s ‘revenue base’. However, assuming it will still be required to distribute gas to some customers, and that those customers are ‘scattered’ randomly through the ACT, the cost of distributing that gas would not decrease, or would not decrease to the same extent as the revenue base.

The only solution to this is to increase distribution tariffs, in turn making the business case for switching stronger and thus exacerbating the initial problem. This phenomenon has been described as the network ‘death spiral’ and would potentially be exacerbated by large scale efforts to switch customers away from gas.

Our 2023 Stepping Up report modelled long-term gas bills for a typical household that remains a gas customer until 2050 as customer numbers decline. It shows gas bills would increase significantly from around 2030.

Projected average annual household gas bill with decreasing customer numbers

Source: Stepping Up, Energy Consumers Australia

Other factors to consider if deciding to switch

Money isn’t the only factor to consider when thinking about going all-electric. There are other benefits to households switching away from gas:

• Households that are all-electric generally produce less emissions than households than consume gas.
• Research is finding that gas stoves release harmful particles that irritate the lungs, particularly in children.

Useful resources

Here are some useful resources for consumers navigating the decision to go all-electric:

• How Do I Get Off Gas? Factsheet
• My Efficient Electric Home Facebook group and related book
• The ACT Government’s Make your Next Choice Electric tool
• The Victorian Government’s Save with an All-Electric Home resources

References

1. Analysis of Victorian Energy Compare and Energy Made Easy, accessed 27 June 2025 ↩︎
2. Analysis of Victorian Energy Compare, accessed 27 June 2024 ↩︎
3. Analysis of Energy Made Easy, accessed 27 June 2024 ↩︎
4. Bills generally peak in winter due to the use of heating. ↩︎
5. If the house decided to purchase an electric ducted heating system. ↩︎
6. See for example Save with an all-electric home (VIC); Rebates, grants and schemes (NSW); Home Energy Support: Rebates for Homeowners ↩︎
7. Analysis of Gas Quarterly Disconnection Reporting, AER, 21 June 2024 ↩︎

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