Bill shock is sweeping Australia this week as major gas retailers hike prices by hundreds of dollars a year.
But not everyone is feeling the pinch.
When Melbourne resident Elizabeth Lowe opened her latest utility bill she was surprised for a different reason – the charge was only $2.39.
“It was so remarkable that I took a photo of the bill,” Ms Lowe told The New Daily.
During COVID-19, Ms Lowe joined three million other Australians and installed solar panels on her property, while also switching to electric heating and appliances.
It was pricey – about $70,000 – although public subsidies reduced the family’s costs by about $10,000.
Ms Lowe also has an electric vehicle, and so no longer pays for petrol.
The household switched to electric after realising their gas heating and hot water would need replacing anyway, alongside concern about climate and its impact on future generations – including their grandchildren.
“We didn’t treat it as spending money, but more like an investment in the house that reduced our bills at the same time,” Ms Lowe said.
“The thing to watch is where things are getting older and can be replaced with alternatives.”
Appetite for ditching gas
Although the upfront cost of switching from gas to electric can be daunting, the economics of the decision are becoming more attractive as increased utility bills hit households hard.
Major retailers like Origin, AGL and EnergyAustralia are passing on at times double-digit price increases to some of their clients, with Victorian customers the worst affected.
Even the cost of electricity from the grid is soaring and is forecast to rise by more than 50 per cent over the next 18 months.
Carl Tidemann, a senior researcher with the Climate Council, said households want to access savings by switching to electric and installing solar panels, but that “financial ability” was still reducing uptake – partly because gas heating and water systems are often cheaper upfront.
“The upfront costs vary enormously,” he said, noting house location is a “big” factor to consider.
“For people who already have solar, switching to electric appliances is a no brainer,” he said.
However, Climate Council research shows that even smaller financial decisions, such as switching to an induction stovetop over gas, can still save households on their utility bills.
And for those willing to switch all their household appliances, savings can vary between $688 a year (in New South Wales) to more than $1100 (Victoria).
The Climate Council has an online calculator that works out how much families could save based on location and their existing appliances.
There are some hidden costs to consider, including possibly upgrading wiring or paying removal fees for existing systems, Dr Tidemann said.
“Nevertheless people are making the switch because the savings can be so big,” he said.
Ms Lowe said those considering a switch should work to their own budget and not do everything at once if it’s going to break the bank.
“You can just do what you can afford as your systems deteriorate,” she said. “Or if you can afford it you can knock it all over together.”
“If I was building a new home I’d go this [electric] way every time.”
Push for more government help
With the upfront costs of switching from gas to solar remaining the biggest barrier for families to make the switch, Dr Tidemann said governments must step in to ease the burden on people.
This should take the form of low (or no) interest loans, he said, which allow households to invest in electric and solar panels without having to pay so much out of pocket.
“Ideally the savings you’re making are more than the interest, if there is even interest on the loan, and you can enjoy some of the savings while still paying off the loan,” he said.
Such green loan programs already exist in the ACT, where households can claim loans up to $15,000 without interest to install solar panels or switch their appliances from gas to electricity.
Tasmania is now implementing a similar program, with loans of up to $10,000 available for a range of energy-efficient products including solar panels, electric heating and even insulation.
