Gas vs Electric Homes: Why the Switch Is Coming and What It Means for Your Energy Rating

Where each state stands in 2026

• • Victoria: No new gas connections in new homes since Jan 2024. Major renovations under planning permit also push toward all-electric. Existing gas homes can stay on gas — for now — but appliance replacements increasingly trigger an electric switch.
• • ACT: No new gas connections from Dec 2023. Full phase-out targeted for 2045. Gas appliance replacement subsidies and home energy assessments funded by the territory.
• • NSW: No statewide ban, but BASIX 2023 made gas hot water and heating much harder to use compliantly in new builds. Many councils are signalling preference for all-electric.
• • QLD, SA, WA, TAS, NT: No bans announced, but NCC 2022 (7-star NatHERS + Whole-of-Home) effectively penalises new gas appliances on the energy budget.

Wherever you live, the direction of travel is the same: electric appliances powered by efficient buildings (and ideally solar). For NSW context, see our NatHERS vs BASIX guide; for Victoria, our Scorecard transition guide.

Why gas is being phased out

Three things have flipped the economics:

• • Gas prices have doubled since 2020 in eastern Australia, with no sign of reversing.
• • Heat-pump technology now delivers 3–5× more heat per unit of energy than burning gas — making electric cheaper per MJ delivered.
• • The supply charge on the gas meter is roughly $1/day (~$365/year) before you burn anything. On a low-use household, supply charges alone can outweigh usage.

Combined with grid decarbonisation and rooftop solar, electrifying a home is now the lower-cost, lower-emissions choice in every Australian climate zone — confirmed by independent modelling from the Australian Government Energy Department and CSIRO.

Switch 1: Hot water (the easiest win)

Hot water is roughly 21% of household energy use and is usually the first appliance to die. Replacing a gas storage or instant gas system with a heat-pump hot water unit typically cuts hot water energy use by 60–70%.

• • Cost: $4,500–$6,500 installed, dropping to $1,500–$4,000 after federal STC + state rebates.
• • Payback: Typically 4–7 years, faster if you have solar to soak up the daytime run cycle.
• • Bonus: Removes one major reason to keep paying the gas supply charge.

Find installers in our hot water directory and check available rebates by state.

Switch 2: Heating (the biggest energy slice)

Ducted gas heating typically runs at 60–80% efficiency. A modern reverse-cycle split or zoned ducted system runs at 300–500% effective efficiency (COP 3–5) — meaning 3–5 units of heat for every unit of electricity.

• • Cost: $3,000 (single split) to $12,000+ (whole-home zoned ducted) installed.
• • Running cost: Often less than half the cost of ducted gas in the same home.
• • Comfort: Reverse cycle gives you cooling for free in summer.

Crucially, insulation and draught sealing should come before — or alongside — a new heater. A leaky 2-star home with a brand-new reverse-cycle is still expensive to run. See how to improve your NatHERS star rating for the right order. Browse HVAC installers for quotes.

Switch 3: Cooking (the smallest, but the trigger to disconnect gas)

Cooking is only 2–4% of total household energy, so the bill saving from switching is small. The reason to switch is to kill the gas supply charge entirely — once cooking is the only gas appliance left, an induction cooktop pays back almost immediately on disconnection alone.

• • Induction cost: $800–$2,500 for the cooktop, plus electrical work if your switchboard needs an upgrade.
• • Indoor air quality: Gas cooktops emit NO₂ and ultrafine particles linked to childhood asthma — the Lancet 2023 review showed measurable health benefits from going electric.
• • Cooking performance: Induction is faster than gas to boil water and gives finer temperature control.

Once hot water, heating and cooking are all electric, you can ask your retailer to disconnect the gas meter and save the ~$365/year supply charge.

What this means for your NatHERS rating

NatHERS has two scores from 2024 onward:

• • Thermal performance (0–10 stars): Measures only the building shell — insulation, glazing, orientation, sealing. Switching appliances does not change this number.
• • Whole-of-Home score (0–100+): Adds heating, cooling, hot water, lighting, cooking and on-site solar/batteries on top of the thermal score.

Replacing a gas hot water system with a heat pump, or ducted gas with reverse cycle, can move the Whole-of-Home score by 20–40 points — sometimes the difference between failing and passing the new energy budget. For full background, see NatHERS star rating explained.

A NatHERS assessment models both scores for your home and shows the impact of each appliance swap before you spend the money — so you electrify in the right order, not the order things happen to break.

The right order to electrify

1. Seal and insulate first — every dollar on the building shell makes the appliances you buy next smaller, cheaper and faster to pay back.
2. Replace hot water when the existing tank is over 8–10 years old, or now if it's already gas instant.
3. Replace heating when the gas furnace is approaching end of life, or sooner if you want winter cooling for free.
4. Switch cooking to induction last — and disconnect the gas meter the same week.
5. Add solar (and a battery) to feed the new electric load on your own terms.