Give up the gas: switching to electric appliances could save Australians up to $1,900 a year, report

Climate Council shows energy bill and emissions savings in each capital city for substituting hot water, cooktops and heating

The cost of buying new electric appliances such as induction stoves could be recouped in as little as five years, the Climate Council says. Photograph: Westend61/Getty Images

Switching gas-fuelled home appliances such as cooktops and water heaters to electric versions could save Australians between $500 and $1,900 a year in energy bills, a new report says.

The cost of buying new electric appliances would be recouped in as little as five years depending on location, according to the report from the not-for-profit Climate Council.

The council says state governments should incentivise the switch from gas with low- or zero-interest loans, as upfront costs of new appliances are stopping families from going electric.

“Whether it’s on emissions, savings on your bills, or for your health, we hope Australians will realise [switching from gas] is a win, win, win,” said Dr Carl Tidemann, the lead author of the report.

Wholesale prices for gas and electricity have been rising sharply due mostly to the increasing costs of gas in international markets, pushed higher after Russia’s invasion of Ukraine.

Those wholesale price rises have started to translate into large jumps in residential bills.

The Climate Council looked at the cost of hot water, space heating and cooking using gas compared to electrical alternatives like heat pumps, solar hot water, split-cycle air conditioners and induction cooktops.

Using the average retail prices for gas and electricity in each capital city in August, the report presents the annual cost savings for people switching all their appliances, or just select ones.

For example, a home in Melbourne that switched its cooking, heating and hot water from gas to electric appliances would pay $943 a year less in energy bills.

Buying more expensive appliances, including solar hot water with an electric boost, would save $1,207. Calculations did not account for any future rises in either gas or electricity.

As well as saving on gas bills, the report also included the average annual standing charges for supply of gas that are as little as $77 in Perth and as much as $280 in Melbourne.

Families in the colder climate of Hobart would save between $1,594 and $1,899 each year – the highest savings of any capital, just ahead of Canberra.

Yearly bill savings based on total gas bill vs electricity bills with lower and higher priced appliances and payback periods for appliance costs and potential electrical upgrades.

The cost of purchasing all new electric appliances, including three split-cycle air conditioners for space heating, was $7,818 for cheaper less efficient alternatives and $14,936 for the most efficient.

In Hobart, it would take between five and eight years to recoup the cost of appliances through savings on bills. In Sydney it would take between 13 and 16 years and in Melbourne between eight and 12 years.

The report also calculates the impact on greenhouse gas emissions from a hypothetical switching of all appliances.

Savings over a decade were highest in Canberra (45 tonnes of CO2 per household) and Hobart (33 tonnes), where the electricity supply is already renewable.

Households in Melbourne would save 15 tonnes of CO2, followed by Sydney (13 tonnes), Adelaide (13 tonnes), Perth (nine tonnes) and Brisbane (seven tonnes).

The report made several recommendations for state and federal governments, including providing free electric home upgrades for very low income households, banning gas connections for new homes, and investing in Australian manufacturing of heat pumps and other all-electric equipment.

Tidemann said “kicking gas out of homes” would shield Australians from future price spikes, as well as lower greenhouse gas emissions and reduce health concerns from burning gas indoors.

Dr Kari Dahlgren, a research fellow at Monash University who looks at social aspects of energy use, said people interested in making a switch would usually start small.

Households were already experimenting, she said, through buying small standalone induction cooktops that they used beside their gas stoves, or using their conditioners as space heaters.

Dahlgren, who was not involved in the Climate Council report, said while many people were motivated to switch because of cost savings or climate benefits, some thought it was wasteful to get rid of an appliance before it broke down.

She said some households had attachments to cooking or heating with gas – preferring the sensation of cooking with gas, for example – and this could also be a barrier to them switching.

But she said ongoing research with more than 70 Australian households was showing that improving air quality inside homes – an issue that became more important after the Black Summer bushfires and during the pandemic – could be “a big motivator” for people to get rid of gas appliances.

“Cost savings do motivate people, but there are sensory elements and people want to provide a safe and healthy home,” she said.

“Encouraging people [to switch] for a healthy safe home might be more effective than just the cost reductions.