Gas hot water systems to be phased out of Victorian homes under new energy reforms
Gas hot water systems will be phased out of all Victorian homes as part of the state government's plan to wean households off gas and prioritise dwindling supplies for industry.
However, the government has explicitly said there will be no changes to gas cooking or heating for owner-occupiers, following concerns that the Labor government intended to ban all gas appliances.
From 2027, all newly built homes will be permitted to have only electric appliances.
The government said from March 1, 2027, gas hot water systems at "the end of [their] life" will need to be replaced with electric alternatives.
However, they can still be repaired if they break down and be reinstalled during renovations.
The reforms will also require all commercial buildings — excluding industrial, manufacturing and agricultural buildings — to be constructed as "all-electric" from the beginning of 2027.
Victorian Premier Jacinta Allan said the reforms would save families money and help redirect the state's gas resources to meet industrial demand.
"Families will pay less on their energy bills, industry will get the gas it needs — and Victorian jobs are protected," she said.
Some Labor MPs, including some ministers, had privately expressed concern that the government's gas transition plan was too prescriptive and had opened Labor up to a scare campaign from industry and the state opposition.
From January 1, 2027, rental properties will also be subject to higher energy efficiency standards under the new reforms.
Gas hot water systems and heaters in rental properties will need to be replaced with electric alternatives once they are beyond repair. Additionally, ceiling insulation must be installed if it is not already present at the start of a lease, and homes will require draught sealing at the beginning of each tenancy.
While living rooms in rental properties are already required to have heating, from March 1, 2027, they must also include an electric cooling system.
Victoria is facing a looming natural gas shortage because supply traditionally taken from Bass Strait is running out.
The government believes these changes will help the state avoid forecast shortages.
Victoria currently has the highest use of residential gas in Australia, at around 80 per cent of homes, according to the state government.
In 2021, the state government introduced its Gas Substitution Roadmap to encourage households to switch from gas to electric appliances.
The state's high gas use is at odds with its climate policy, with the state government hoping to hit its climate targets by supporting the "rapid electrification" of homes.
The state government said the gas sector contributed to 17 per cent of the state's emissions and the move to electricity was a key element of meeting Victoria's emissions reduction targets of 75 to 80 per cent by 2035 and net zero by 2045.
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