Update On Victorian Gas Phase Out For New Homes
The Victorian government banned natural gas connections in all new homes that require a planning permit in the state from 1 January 2024. That means no gas heating, hot water or cooking for some new homes.
The gas ban is part of Victoria's shift towards clean energy and goal to reach net zero emissions by 2045. Consumers are also expected to benefit, with lower home energy costs.
Victoria builds more homes than any other state, constructing 60,000 new homes from October 2023 to October 2024. Before the ban, 80% of these homes would be connected to the gas network. Now, the law requires many new homes to be powered by electricity.
Victorians are also the biggest users of residential gas in the country so changing to electricity as a primary energy source is a big step. What does it mean for you if you're thinking of building a new home? Read on to find out.
New Victorian homes are going electric
So, when will gas be phased out in Victoria? The phase-out is underway. The Victorian government announced it was planning to move away from natural gas back in July 2023 but the ban didn't come into effect until 2024. From January 1 2024, new gas connections are not available for new dwellings, apartment buildings and residential subdivisions requiring planning permits.
If you're building a new home in a location where a planning permit is required, your new home will now be all electric. That means using electric appliances for hot water, cooking, heating and cooling, a change from the previous model where gas and electricity could both be used.
More changes are expected, with the state government exploring the option to electrify more homes and commercial buildings by 2026. While there are several options on the table, details have not been confirmed.
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
There are no penalties for Victorian households with existing gas connections. Existing homes can continue to use gas and install new gas appliances.
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. Amendment VC250 to the Victoria Planning Provisions and planning schemes in Victoria was gazetted on 1 January 2024, introducing new requirements for the construction of new dwellings, apartments and residential subdivisions.
[Clause 53.03] of the provisions “prevents a permit being granted to connect to reticulated natural gas when constructing a new dwelling, apartment development or subdividing land for residential purposes.” It also prevents gas connections being constructed after the completion of a development.
This restriction covers reticulated natural gas connections only. It does not apply to bottled or reticulated Liquified Petroleum Gas (LPG).
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.
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. “Gas supplies are dwindling, and it is no longer a cheap and plentiful source of energy for Victorian homes and businesses,” she said.
On February 16 2025, Minister D'Ambrosio celebrated the largest year on record for Solar Homes, with more than 78,000 solar panels, hot water systems and batteries installed in 2024.
Residential Electrification Grants Program
Solar Victoria has committed almost $4 million to seven innovative electrification projects under the [Residential Electrification Grants Program](https://www.solar.vic.gov.au/electrification-grants). From upgrading existing gas appliances to installing solar PV systems for vulnerable customers, the program will will directly benefit homeowners, providing Victorians with more comfortable homes that meet the new 7-star building efficiency standards.
Accelerating the state’s transition to all-electric homes, the program will facilitate the delivery of bulk solar panels and hot water rebates for new estates with 50 or more homes. Individual homeowners in eligible 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 said 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
As of November 6 2024, the Solar Homes program provided around 350,000 rebates and loans to eligible Victorian households to support the installation of solar PV, heat pump or solar hot water systems and battery systems.
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. Customers who have previously received a rebate and are now building a new home can also apply. Interest free loans may also be available for an amount equivalent to the rebate.
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. More than 24,000 Victorians have switched to efficient electric heating and cooling, while more than 34,000 have upgraded from a gas water heater to a heat pump water heater.
FAQs about Victoria's gas phase-out
Is gas going to be phased out in Victoria?
The Victorian government has phased out gas for new homes that require planning permits. The gas abolishment in Victoria 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.
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 Victoria 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 had 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 stoves are a safe and efficient alternative to gas cooktops. Heating your pot or pan directly, rather than the heat being transferred from another source, they cook faster than old-style electric cooktops.
They are much more efficient than traditional cooktop appliances, up to three times more efficient than gas stoves and up to 10% more efficient than smooth top electric ranges. Induction cooktops are often a safer option for households with children as they cook without a naked flame.
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.
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.
What are the alternatives to gas hot water systems?
An ideal option is an efficient hot water heat pump with a solar PV system.
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.
