All state and territory governments should introduce bans on gas connections in new homes and develop a clear plan to electrify existing properties and small businesses, according to an organisation representing energy consumers.
In a submission to a Senate inquiry examining Australia’s residential electrification efforts, Energy Consumers Australia urged the government to consider mandatory information disclosures to warn consumers about “the potential economic consequences” of buying a new gas appliance.
The organisation’s chief executive, Dr Brendan French, said its most recent consumer research found 22% of consumers were planning to decarbonise and make their homes all-electric, up from 16% in 2021.
But he said there were still too many barriers for making the switch, particularly for low-income households, renters and residents of multi-unit dwellings.
Recent modelling Energy Consumers Australia commissioned from the CSIRO found that even without solar panels and a battery, households could reduce their annual energy bills by $2,250 by 2030 if they swapped to electric appliances and an electric vehicle. Solar panels and a battery increased the projected saving to $3,500.
“While this is great news for many consumers, people who face barriers to going all-electric could be left behind and unable to access those savings,” French said.
“Governments must make sure those who can least afford to make the switch don’t end up shackled to a fossil fuel gas network that becomes more and more costly for fewer and fewer people.”
The organisation’s submission said the electrification of homes required national planning that involved all levels of government.
It recommended the Albanese government expand its household energy upgrades fund to support more homes and social housing. It also called for further grants and subsidies for low-income households and agreed with a recent Grattan Institute report that urged state and territory governments to set end dates for the use of gas in homes.
It points to Victoria and the Australian Capital Territory as jurisdictions with policies that gave “certainty and direction to both industry and consumers” as economies decarbonise.
In June, the ACT Labor-Greens minority government became the first Australian jurisdiction to introduce legislation prohibiting the use of fossil gas in new homes and businesses.
The Victorian Labor government announced it would phase out gas connections for new dwellings from 2024.
But in New South Wales, the Minns Labor government has ruled out a ban on new gas connections.
The Albanese government has identified energy efficiency in homes and other buildings as low-hanging fruit for reducing greenhouse gas emissions and taking pressure off energy bills.
Budget measures included $1.3bn to establish the household energy upgrades fund, $300m to support upgrades to social housing and $310m for tax deductions for small and medium business that spend money on electrification and energy efficiency. The government is also developing a national energy performance strategy.
The assistant minister for climate change and energy, Jenny McAllister, said the government’s approach to energy upgrades and efficiency was to “give Australians choices”.
“We are taking action to drive down household and business energy costs and make homes and businesses cheaper to run,” McAllister said. “The Albanese government has no plans to ban new gas connections to people’s homes. State and territories can consider the future of gas connections in their jurisdictions.”
The independent MP for Wentworth, Allegra Spender, said new modelling she had commissioned by the parliamentary budget office found more than 10,000 additional hot water heat-pumps, induction cooktops, and energy-efficient reverse-cycle space heating would be installed if landlords could immediately write-off the cost of the upgrades against tax.
Spender is proposing the tax incentive for landlords, which she said would flow on to renters in the form of energy savings of between $514 and $1,594 each year.
She said many renters were locked out of lower power bills because they were reliant on landlords to make energy upgrades.
“This tax break would substantially change the financial incentives facing landlords and ensure that tens of thousands switch their properties to cheaper, greener and healthier electrical appliances when old gas appliances need replacing.”
