Victoria has announced new regulations to reduce gas usage for rentals, newly built homes and newly built commercial buildings, including schools and hospitals.
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All new residential and commercial buildings will require all-electric heating and hot water from January 2027, while rentals and public housing will shift to electric hot water and heating upon replacement from March 2027.
All existing owner-occupied homes can only replace gas hot water with electric systems. Space heating and gas cooking are not included.
IEEFA financial analyst Australian electricity Jay Gordon commented on the announcement, saying, “The Victorian government has taken some very significant steps towards lower-cost, more comfortable, efficient electric homes.
“Analysis by IEEFA and many others consistently shows that shifting to efficient electric appliances is one of the most effective ways to slash energy bills.”
“The days of cheap, abundant gas in Victoria are long gone. Victorians have been left at the mercy of high, volatile gas market prices, which are heavily impacted by geopolitical events. Meanwhile, efficient electric appliances like heat pump hot water systems use a fraction of the energy of their gas counterparts.”
“These regulations are good news for industry as well as households. Victoria is grappling with the risk of gas supply shortfalls. But by transitioning homes to efficient electric appliances that are cheaper to run, that gas can be freed up for industrial users who might not yet have the option to electrify.”
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“These regulations mean that all new residential, and most new commercial buildings built from 2027 will be all-electric, and cheaper to run. And when an existing home’s gas hot water system breaks down, it will be replaced by a modern, efficient electric alternative.”
