Victoria’s planned gas phase-out is becoming a key election issue, with the Coalition and One Nation pledging to wind back plans to stop new homes being connected to the gas pipeline.
But research and local examples show switching from gas to efficient electric appliances can cut household energy bills.
What’s the plan? Introduced in 2022, the Victorian government’s Gas Substitution Roadmap, will require new homes to be all-electric from January 1 2027.
From March 1 2027, if an existing household gas hot water system fails and cannot be repaired, it must be replaced with an efficient electric alternative.
If you own a rental property, that extends to heating as well, should the system break and cannot be repaired.
Local savings: Canterbury resident Julie Mulhauser said her family electrified their 1977 home in 2020, adding insulation and rooftop solar alongside electric appliances and hot water.
🗣️ “We reduced our energy consumption by 80 percent, and half of that remaining 20 percent we produced from our panels,” she said.
Canterbury resident Julie Mulhauser said she and her family lived in the property since 2000.
Mulhauser said the family also electrified a Carlton North rental property, replacing its gas heater and hot water system, cutting their tenants’ energy usage down to seven kilowatt-hours per day.
🗣️ “It makes a difference to renters to ensure that their bills are as low as possible,” she said.
Installing interest: The founder of electrification support company Powrhouse, Tim Johnston, replaced the gas hot water heater at his family’s Balwyn home in February 2025 with an electric heat pump system.
After looking at 12 months of energy bills before and after the installation, he estimated the change had saved his household $580 a year.
Powrhouse founder Tim Johnston
Johnston said there was “definitely” an increase in the interest from homeowners and renters in replacing gas water heaters with electric heat pumps.
🗣️ “Everyone is interested in cheaper running costs … and reducing their bills,” he told the Eastern Melburnian.
Expert analysis: Grattan Institute energy and climate change program director, Alison Reeve, said its 2023 research found Victorian households could save between $1,200 and $1,400 a year by replacing gas cooktops, water heaters and heating with efficient electric alternatives.
🗣️ “The result of unwinding the gas roadmap for Victorians will be a higher cost of living for more households, particularly renters,” she said.
Cost improvements: According to the Institute for Energy Economics and Financial Analysis, residential electrification initiatives in Victoria have reduced household energy bills by $185 million since 2023.
Environment Victoria senior climate and energy advisor, Kat Lucas-Healey said research showed replacing an old gas appliance with a new one “locks in high bills for another 15 to 20 years”.
Left: Grattan Institute energy and climate change program director Alison Reeve. Right: Environment Victoria senior climate and energy advisor Kat Lucas-Healey.
What others said: The Victorian Liberals have promised to abandon the requirement for households to replace broken gas hot water systems with an electric alternative.
The Coalition’s spokesperson on energy and emissions reduction, David Davis, said “Labor’s gas ban will cost many families tens of thousands of dollars”.
The Eastern Melburnian contacted Davis to seek clarification on the basis of these claims, but his office did respond before publication.
One Nation has also pledged to scrap restrictions on gas connections in new homes, but has not detailed its position on existing gas systems.
What’s actually changing? Reeve said she believed the Coalition’s claim that replacing systems would cost families “tens of thousands of dollars” and represented a “gas ban” was “prone to misinterpretation”.
🗣️ “No one is being forced to replace their cooktop,” she said. “The replacement [of gas water heaters] only has to be done when the existing water heater breaks. It can be repaired if it breaks down, and if you take a gas water heater out during a renovation, you can put it back in.”
Thumbnail Image Credit: iamNigelMorris