Victoria phasing out gas in new homes from 2024

2nd November 2023

General News Sustainability Before You Buy

The Victorian government has banned natural gas connections in all new homes that require a planning permit in the state from the beginning of next year. That means no gas heating, hot water or cooking for some new homes.

With the Victorian government setting a target to reach net zero emissions by 2045, the gas ban is part of the state's shift towards clean energy. While the motivation is towards reducing fossil fuel consumption, the change is expected to benefit consumers with reduced home energy costs.

Around 50,000 new homes are built in Victoria each year. Over 40,000 of those connect to the gas network. Victorians are the biggest users of residential gas in the country. So, changing to electricity as a primary energy source is a big step.

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New Victorian homes are going electric

The Victorian government announced the transition away from natural gas in July 2023. Planning permits for new homes and residential subdivisions after 1 January 2024 will only allow electrical connections.

For anyone thinking of building a new home, having an all-electric power supply means using electric appliances for hot water, cooking, heating and cooling. This is a departure from the traditional hybrid model of gas and electricity in many Victorian homes.

Existing homes are not affected

If your current home is connected to gas, there's nothing you need to do. The new rules do not cover existing homes.

The new policy will not affect:

  • New homes that don't need a planning permit
  • Residences with existing planning permits or those approved before 1 January 2024
  • Homes that already have gas connections
  • Renovations and extensions to existing homes
  • Using bottled gas for outdoor BBQs

Why is the government phasing out gas?

The Victorian government says moving to electricity will cut carbon emissions, help the state reach its emissions reduction targets and reduce reliance on high-polluting fossil fuels.

Natural gas is a fossil fuel. It's also a key contributor to Australia's greenhouse gas emissions, which contribute to global warming and climate change. The gas sector contributes about 17% of the state's emissions.

New technology means cleaner, more efficient options are available that can also save households money.

Victorian Energy Minister Lily Ambrosio said that uncertainty of gas supply and rising global gas prices meant a new approach was needed to home energy.

"Clean energy produced by household solar panels combined with modern, energy-efficient electrical appliances is now the most cost-effective way to warm Victorian homes in winter, cool them in summer and power our households throughout the year," she said.

Evidence is also emerging about the potential health risks of gas in the home, including asthma and other respiratory issues. The combustion of gas during cooking and heating produces air pollutants that can trigger asthma flare-ups and contribute to the development of asthma, according to a 2023 study by Asthma Australia.

Victoria's Gas Substitution Roadmap

Victoria's Gas Substitution Roadmap (GSR) is the document guiding the gas phase-out with the aim of moving to renewable energy faster.

It outlines how the transition will take place, including:

  • Government policy changes
  • Support for industry
  • Household support for upgrading to efficient electric appliances
  • Changes to government gas use
  • How the government will help Victorians cut energy bills
  • Maintaining supply reliability

The roadmap includes the new 7-Star Standard for new homes, which takes into consideration home energy appliances and the thermal shell of the building to ensure more efficient home designs.

It also outlines the legal changes needed to introduce all-electric homes to Victoria. Current laws require new houses to connect to gas. The government has committed to changing those laws as part of the GSR, as well as phasing out existing incentives for purchasing gas appliances.

What phasing out new residential gas connections means for your new home

If you're planning to build a new home in Victoria, it will now need to be powered by electricity.

While much of the transition will be managed by builders in the home design process, it's worth spending time understanding the changes and considering the following aspects of your build.

  • Short and long-term energy needs and costs
  • Options that will save you money over the long term, such as solar panels and batteries
  • The types of appliances that will suit you and your family, especially if you're used to gas
  • What this means for home heating. For example, comparing a ducted reverse-cycle inverter system with reverse-cycle air conditioning.
  • Cooking needs and whether a standard or induction electric stove will work for you
  • Cost savings by including energy-efficient measures now versus retrofitting later.
  • Understanding new 7-star energy efficiency requirements required for new home builds in Victoria from May 2024 as part of changes to the National Construction Code.

Henley has been building all-electric homes since June 2022. As a leader in this space, we have researched the best systems and solutions for modern all-electric homes. Our All-Electric Solar Powered Homes include electric heating, cooling, cooking and hot water, with upgrade options for electric vehicle chargers and getting battery-ready.

We’re here to answer your questions and find the right system and appliances for your new home.

What about existing homes?

There are no penalties for Victorian households with existing gas connections. Existing homes can continue to use gas and install new gas appliances. This includes major renovations. However, complete knockdown rebuilds will be subject to the all-electric requirements.

Incentives for buying gas appliances have either ended or will end on 31 December 2023.

Savings for all-electric homes

The change to all-electric should save homeowners money. The price of gas continues to rise sharply while renewable electricity costs are falling.

The state government says using efficient electrical appliances will save Victorians up to $1,000 on annual energy bills. For homes with solar power, this saving could be up to $2,200.

As an example, with Henley solar all-electric homes, households can save up to 70% on their energy bills.

A report by Sustainability Victoria on our Good Friday Appeal Charity Home, the Electra 35, showed the annual energy cost for this home, including All Electric Solar + 10.08kWh battery running costs, was just $515 per annum.  A similar dual fuel (gas plus electric) system with no solar costs around $1531 a year.

Minister D’Ambrosio says the time is right to move away from gas.

“We know that with every bill that arrives, gas is only going to get more expensive. That’s why we’re stepping in to help even more Victorians get the best deal on their energy bills.”

Residential Electrification Grants Program

A new Residential Electrification Grants Program will deliver bulk solar panels and hot water rebates for new estates with 50 or more homes.

This means individual homeowners in applicable estates won't need to apply for rebates for solar power or heat pumps. It will all be done as part of the home-building process.

Minister D’Ambrosio says the program will make it “easier than ever for Victorians to install solar and energy efficient hot water, enabling households to run more cheaply and efficiently.”

“This program is helping to accelerate the household transition to all-electric homes on a scale not yet seen in Australia,” she said.

Support and incentives for going electric

Solar Panel (PV) Rebate - for new or existing builds

Solar panel rebates of up to $1,400 may be available towards installing PV systems for new or existing homes that meet the eligibility criteria.

Solar battery loans

Interest-free solar battery loans of up to $8800 can help reduce the upfront cost of installing a battery. Repayments are made over four years. Available for owner-occupied and new homes.

Victorian Energy Upgrades (VEU) program - for existing homes

The Victorian Energy Upgrades (VEU) program supports households to reduce energy costs by installing energy-efficient equipment. New incentives will be developed to help households replace gas hot water and gas heating.

FAQs about Victoria's gas phase-out

Is gas going to be phased out in Victoria?

The Victorian government is phasing out gas from 1 January 2024 for new homes that require planning permits. The gas phase-out covers brand-new homes, apartments, housing developments, public housing and social housing. New government buildings, including schools and hospitals that haven't reached the design stage, will be all-electric.

The ban is on new planning permits from the beginning of 2024, not new builds. So, new homes covered by existing planning permits will still be able to use gas.

What is the Victorian substitution roadmap?

The Gas Substitution Roadmap (GSR) sets out the plan to ban new gas connections in Victoria from 1 January 2024 as part of a goal to achieve net zero emissions by 2045.

Are gas appliances being phased out in Victoria?

Around 80% of Victorian households use gas for cooking, heating and hot water, so gas appliances aren't going away any time soon. The government is working with gas appliance manufacturers and the building industry to support transitioning from gas to electricity as the main power source for Victorian households.

New homes affected by the gas phase-out will only be able to install and use electrical appliances.

What happens to homes with planning permits lodged before 1 January 2024?

New estates that have planning approval before the end of 2023, as well as existing estates and knockdown rebuilds that don’t trigger a planning permit can include a gas connection.

What are the alternatives to gas cooking?

Induction cooktops offer advanced technology for fast, safe and efficient cooking. They’re more advanced and cook faster than the old-style electric cooktops as the energy transfers directly into the base of the cookware.

According to Choice, induction cooktops transfer heat with approximately 85% efficiency, while gas-powered cooktops operate at an efficiency of 32%.

An added bonus is that they cook without a naked flame, which can be a safer option for families with children.

Built-in electric ovens are known to distribute heat more evenly, cook food faster and are easier to install than gas.

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Will I still be able to install a gas BBQ in my new home?

Yes. The change does not impact the use of bottled gas for outdoor barbeques.

What are the alternatives to gas heating?

Electric inverter split systems are an option for heating and cooling master bedrooms and main living areas. These systems feature demand response to help reduce overall power consumption at peak load times.

Wall-mounted radiant electric panel heaters can be an alternative heating source for secondary bedrooms, studies and leisure rooms.

For a whole-of-home solution, a ducted reverse cycle inverter system provides year-round comfort with full temperature control.

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What are the alternatives to gas hot water systems?

An ideal option is an efficient hot water heat pump with a solar PV system.

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How is Henley managing the transition to all-electric homes?

We’ve partnered with some of the world's leading brands to introduce our All Electric Solar Powered homes - offering electric heating, air-con, induction cooking and hot water plus solar panels.

With the help of Sustainability Victoria and their Whole-of-Home Pilot Tool, our new home consultants can show you how to save up to 70% on your energy bills by going all-electric solar powered.

Enquire now

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