The one simple change you can make to cut household bills

Almost half of Victorian householders could slash their annual energy bills by two-thirds by switching from ducted gas heating to reverse-cycle, split systems, with the investment paying for itself within as little as a year.

Switching from ducted gas to three reverse-cycle split systems would cut household bills in a home built before 1991 almost $2000 a year in most parts of the state, a new report has found. About 44 per cent of Victorian homes are heated by a ducted gas system that has no cooling component.

Julie Mulhauser and husband John retrofitted and electrified their home, reducing their annual bills down to $300 a year.Credit: Justin McManus

While the environmental benefits of switching from gas to electric are well known, a new report by not-for-profits Environment Victoria and Renew has mapped the financial benefits to Victorian households of switching from gas to electric heating.

The report’s authors tested a range of scenarios, including different heating systems and levels of investment, and found that in every scenario, switching to electricity rather than installing new gas systems was cheaper up front or paid for itself within a year.

For older homes, it would take just 10 to 15 weeks to pay off the cost of installing an efficient reverse-cycle split system in bill savings, Environment Victoria said.

“Our analysis shows that whatever your budget, there is an efficient electric option that will leave you much better off,” said senior climate and energy adviser Kat Lucas-Healey, the report’s author.

“The best time to plan a heating and cooling upgrade is now – before the old gas system needs replacing.”

Julie Mulhauser and her husband, John, spent three months completing an extensive retrofit and electrification of their Canterbury home in 2020.

The couple bought their 1970s brick veneer home, built by architect Graeme Gunn, in 2000.

“They were built in the ’60s and ’70s where insulation was not a thing and there’s glass everywhere,” Mulhauser said.

Julie Mulhauser in her energy-efficient kitchen in Melbourne’s eastern suburbs.Credit: Justin McManus

“It was all single [glazed] glass, and the glass didn’t quite fit the frames. My husband used to joke that the cockroaches didn’t even have to duck their heads to come in.”

Mulhauser said the principles of improving a home’s thermal performance with insulation in the ceilings and walls, upgrading windows and fixing gaps applied to every home: “It just can be more or less difficult.”

Having driven their annual energy bills down to $300 a year, Mulhauser said she couldn’t put a price on the improvements to comfort and warmth within their home.

“We simply could not heat our home to a point that we were comfortable … The major benefit is the comfort and health benefits. And then if you do it in a particular way, so you get it all working together, you make really significant cost savings.”

On a more modest level, Electrify Boroondara committee member Philippa Sholl has added insulation, draught-proofing, solar panels and secondary glazing to her Kew home.

While she waits to replace her gas cooktop with induction, she has placed wooden covers over the cooktop and uses portable induction units to cook from daily. “There are all kinds of workarounds,” she said.

The main benefit had been switching to reverse-cycle air-conditioners, running off solar during the day, and bolstered by better insulation, Sholl said.

“Heating our house used to be roughly $30 a day [during winter] in gas in the current prices ... probably in winter now we’re spending about a couple of dollars on the cold days when we run it longer.”

Report author senior climate and energy adviser Kat Lucas-Healey said 27 per cent of Victorian homes already had reverse-cycle split systems that weren’t being used to heat the home.

If households stopped relying on gas to heat these homes and used the split system instead, they could cut their annual energy bills by between half and two-thirds with no upfront investment, Lucas-Healey said.

“Efficient electric homes are cheaper to run, healthier and more comfortable.

“Gas space heating is an old technology that accounts for a massive 71 per cent of residential gas use in Victoria. It’s an incredible waste, wildly expensive and a disaster for the climate.”

Get to the heart of what’s happening with climate change and the environment. Sign up for our fortnightly Environment newsletter.