Gas vs. Electric: Cut Your Energy Bills by 70%

Rising energy costs are pushing Australian households to rethink their energy consumption. With gas prices continuing to fluctuate and electricity increasingly sourced from renewables, many are asking: Is switching to an all-electric home a smarter financial move? 

According to the 2024 AEMC Residential Electricity Price Trends Report, households that fully transition from gas to electricity could reduce their total energy costs by up to 70%. This comprehensive guide explains why making the switch could be a game-changer for your household budget, while also benefiting the environment. 

The Shift Away from Gas: What’s Driving It? 

1. Rising Gas Prices 

Gas prices in Australia have surged in recent years due to a combination of global demand, export contracts, and domestic supply constraints. According to the Australian Energy Regulator (AER), wholesale gas prices in 2023 were 40% higher than in 2020, leading to steeper household gas bills. 

2. Electricity is Getting Cheaper 

While gas prices are rising, electricity prices are projected to decrease by 13% over the next decade, per the AEMC’s 2024 report. This is largely due to the expansion of renewable energy sources like solar, wind, and battery storage, which are driving down wholesale electricity costs. 

3. Government Incentives for Electrification 

Federal and state governments are actively encouraging households to go all-electric, offering rebates and incentives for electric appliances, solar panels, and battery storage. Programs such as the Solar Homes Program (Victoria) and Energy Efficiency Grants (NSW, QLD, SA, and VIC) help cover upfront costs for switching. 

How Much Can You Save by Going All-Electric? 

Estimated Savings Breakdown 

Switching from gas to electricity affects multiple aspects of household energy consumption, including heating, cooking, and hot water. Here’s how the savings stack up: 

These figures are based on estimates from Renew (an Australian non-profit energy research group), showing that a typical household could save over 50% by switching. Households that add rooftop solar could increase savings up to 70% or more by further reducing electricity costs. 

Electric vs. Gas Appliances: Cost & Efficiency Comparison 

1. Heating: Reverse Cycle Air Conditioners vs. Gas Heaters 

• Reverse cycle air conditioners (electric): 300-400% efficiency (1kWh input = 3-4 kWh heat output) 
• Gas heaters: 70-90% efficiency (1kWh input = 0.7-0.9 kWh heat output) 

A high-efficiency reverse cycle air conditioner can heat a room four times more efficiently than a gas heater, making it the cheaper and more effective option. 

2. Hot Water: Heat Pumps vs. Gas Storage Water Heaters 

• Electric heat pump hot water: Uses 1kWh to generate 3-4 kWh of heat 
• Gas storage hot water: 60-80% efficient 

Electric heat pumps consume 75% less energy than traditional gas hot water systems, providing significant savings. 

3. Cooking: Induction Stoves vs. Gas Stoves 

• Induction cooktops: 85-90% efficiency, faster cooking times, safer 
• Gas cooktops: 30-50% efficiency, slower cooking, higher heat loss 

Induction stoves are twice as efficient as gas stoves, using less energy and improving kitchen safety. 

The Environmental Impact: Lower Emissions, Cleaner Air 

Going all-electric isn’t just about saving money—it’s also a win for the environment. 

1. Lower Carbon Emissions 

According to the Australian Renewable Energy Agency (ARENA), households that switch from gas to electricity can reduce carbon emissions by 50-80%, especially if they use solar power. 

2. Better Indoor Air Quality 

Studies from Harvard University found that gas appliances contribute to indoor air pollution, increasing exposure to nitrogen dioxide and other harmful pollutants. All-electric homes improve air quality, reducing respiratory risks. 

What About the Upfront Costs? 

Transition Costs & Government Rebates 

Switching to an all-electric home requires investment in new appliances, but government rebates and long-term savings offset these costs. 

Is It Worth Switching Now? 

Yes—especially if your current gas appliances are nearing the end of their lifespan. The combination of rising gas prices, falling electricity prices, high-efficiency electric appliances, and government incentives makes 2024 the best time to go all-electric. 

Final Thoughts: Should You Make the Switch? 

Switching from gas to electricity is a smart financial and environmental move. With savings of up to 70%, improved home efficiency, and cleaner air, it’s an investment that pays off in both the short and long term. Plus, with rebates available, the initial transition cost is more affordable than ever. 

Key Takeaways: 

• Gas prices are rising, while electricity costs are falling. 
• All-electric homes save 50-70% on energy bills. 
• Government rebates reduce appliance upgrade costs. 
• Heat pumps, induction stoves, and solar power improve efficiency. 
• Lower carbon footprint and improved air quality make going electric the sustainable choice. 

Ready to switch? Start by comparing energy plans and finding rebates in your area today!