Victoria is planning to offer financial incentives to encourage households to switch from natural gas to electric cooktops as part of what Energy Minister Lily D’Ambrosio has described as imminent major changes to the state’s energy upgrade program.
The Allan government is expected to release an update to its gas substitution road map in coming days. It will provide greater detail about how the state plans to transition industry and more than 2 million households away from the use of natural gas.
Victoria wants to transition industry away from the use of natural gas.
Three people involved in discussions with the state government, speaking anonymously to detail confidential conversations, said financial incentives to households wanting to alter or replace cooktops running on gas were a key aspect of the planning of the program.
One option under consideration to speed up this transition is a reform of the Victorian Energy Upgrades (VEU) program to include electric cooktops and encourage discounted prices.
D’Ambrosio said new products and supplies for the VEU would be added “in due course”.
“We’re updating the Victorian Energy Upgrades program to move Victorians away from expensive gas and into more efficient electric alternatives, keeping Victorians’ bills as low as possible,” she said on Tuesday.
“Some of these changes have already come into effect, including new discounts for replacing gas heating with energy efficient reverse-cycle air conditioners and old inefficient hot water systems with efficient heat pumps.”
Under the VEU scheme, installers who replace ageing appliances with more energy-efficient or electric models receive carbon credits for every product they install in a home.
Electricity retailers are required to purchase thousands of these credits each year to help Victoria meet its emissions goals.
Businesses that earn these credits offer significantly cheaper installation prices to households because they can offset losses and make a profit by selling these credits on the open market. They are currently trading at $87 each.
Experts have called for the VEU to be expanded as it has becoming increasingly dominated by installers collecting credits for single energy-efficient light bulbs or cheap weather sealing strips to help control temperatures.
At an Energy Efficiency Council event on November 21, D’Ambrosio told industry representatives that “massive changes” were imminent for the VEU, according to two attendees speaking anonymously to detail what was said at the industry event.
Incentives to transition away from gas cooktops would work alongside the Allan government’s strategy for the State Electricity Commission.
A 10-year strategy for the SEC released in October details how it would become a “one-stop shop” for households to help them find the right rebates and appliances to install in their homes.
An induction cooktop.Credit: iStock
An SEC event held at parliament house last month with chef Helly Raichura, owner of restaurant Enter Via Laundry, spruiked induction cooktops by using them to prepare meals for MPs and staff.
Alison Reeve, deputy director of the energy and climate program at the Grattan Institute, said moving households off gas was a major challenge because Victoria needed to switch more than 200 homes a day from natural gas to reach the state’s target of net zero emissions by 2045.
“The other side of that is that about 400 Victorian households woke up this morning and found that one of their gas appliances was broken,” she said.
“It is actually possible to get there on the replacement cycle if you catch people at that point.
“You actually have to do a lot of work with people ahead of time, so that they’ve identified what their best option is, they know who to call, and they can get it done. You need to sort of consistently be communicating with people so that it’s in the back of their heads all the time.”
In an effort to move the state away from natural gas, connections for new homes will be banned by the state from January 1, 2024. The Allan government estimates all-electric households save $1000 from their energy bills compared to those using natural gas.
Reeve said the best way to push households towards electric appliances was to offer a discount at the point of sale, rather than a rebate that left people out of pocket for a time.
She said another missing piece was offering consumer finance so that people struggling with the cost of living could pay it off over time.
“The thing that takes the most gas in your house is the heating system, but the thing that people are most attached to is the cooktop,” Reeve said.
“You need to find a way for people to try before they buy, so that they can feel a lot more comfortable making that decision.“
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