New State Electricity Commission to give advice to Victorians on ditching gas

Even with cheaper power bills, it may take up to 50 years for some Victorian families to realise the savings after the costs of replacing all appliances are factored in.

It will take many Victorian households between 10 and 50 years – depending on property size and appliances – to pay for the cost of an all-electric transition in existing homes using the Allan government’s promised lower power bills, according to gas industry analysis.

SEC Minister Lily D’Ambrosio says going all-electric in new-home builds will cut $1000 off energy bills and, for homes using solar panels, an annual saving of about $2200 can be expected.

But the gas sector has warned that for the existing 80 per cent of Victorian homes connected to gas – about two million properties – a transition to all-electric would take years and, in many cases, decades to realise the savings after costs of replacing all appliances was factored in.

Gas Energy Australia chief Brett Heffernan said Victorians with larger family homes had this year reported some all-electric transition costs had risen to $50,000.

About 80 per cent of Victorian homes are connected to gas.

A 2022 report from Frontier Economics on the cost of switching from gas to electric appliances also found the total cost of replacement and fitting could be $40,000, while smaller home gas-to-electric costs have been put at about $11,000.

But Grattan Energy Program director Tony Wood said immediate bill savings could be realised by simply replacing individual gas appliances with electric as they expired rather than a full-home retrofit.

Even with rapid transition, Grattan Energy Program research found most households would save about $13,000 over a decade, including the cost of new electric appliances as gas versions expired.

Mr Wood said the benefit of the re-established SEC would help advise households on that transition and work with industry to shore up skills and efficient-appliance stock.

“We need to be planning for it now to do it over the next 20 years,” he said.

Australian Pipelines and Gas Association chief executive Steve Davies warned consumers could still lose money in the long run.

“Consumers often hear about forecast savings from electrification but never about the upfront costs because, more often than not, those upfront costs are larger than the total savings over the life cycle of appliances,” he said.

Ms D’Ambrosio on Thursday spruiked the shift to all-electric as the government launched its 10-year strategy for the return of the SEC.

“The average existing home, detached home, going all electric and getting solar energy bills will come down by 60 per cent, every year,” she said.

“Without solar, but you do all the other electric upgrades, the savings will be 30 per cent.”

When asked on Friday if rebates would be increased to help ease the burden on struggling households to go solar and electric, Premier Jacinta Allan said the programs in place were “great” already.

“We’ve already got, for example, the solar homes program, which is helping households to get solar panels on their roof,” she said.

“There is also the rollout of our key election commitment from last year of additional battery storage sites across the state.”

Ms Allan also pointed out the yet to be determined SEC support program.

“The SEC will not be a place where we just drive more investment into renewable energy,” she said.

“Not just a place where we make sure we are building up the workforce to be part of that renewable energy program.

“But also a place where households can get advice on going all electric.”

Ms Alln recognised families had been avoiding the shift, noting Victoria used more gas than any state.

“We know that many people have been put off electrifying their homes because of the complexity and the cost,” she said.

“The SEC will create a trusted one-stop shop that will take the guesswork out of the process.”