Worked Examples and Comparison Checklists
Gas vs all-electric home: what happens to your energy bills (worked example)
An illustrative worked example of how household gas and electricity bills change when you go all-electric in Australia — supply charges, MJ to kWh, tariffs and timing.
When an Australian household replaces all its gas appliances with electric ones, three things happen to the bills: the gas usage charges disappear, the gas daily supply charge disappears once the account is closed, and the electricity bill rises by the extra kWh the new appliances use. Whether you come out ahead depends mostly on how efficient the new appliances are, which electricity tariff you are on, whether you have solar, and the cost of the switch itself. Removing only one gas appliance keeps the supply charge, which is why a partial switch often saves much less. This guide looks only at the bill side with illustrative numbers. Equipment choice, sizing and installation costs are separate decisions; get written quotes from licensed trades.
Step 1: Find your current gas costs
From a year of gas bills:
| Item | Example (illustrative) |
|---|---|
| Gas usage | 30,000 MJ a year |
| Usage rate | 4.0 c/MJ average |
| Supply charge | 95 c/day |
| Appliances | Ducted heating, storage hot water, cooktop |
Annual gas cost: 30,000 × $0.04 = $1,200 + 365 × $0.95 = $346.75 → $1,546.75
Many gas plans use stepped rates (a higher rate for the first block each billing period). Use the actual average from your bills. Gas bills show energy in MJ, converted from the metered volume using the heating value and pressure factor on the bill.
Step 2: Convert gas use to useful energy
1 kWh = 3.6 MJ. Illustrative split of the 30,000 MJ and appliance efficiencies:
| Use | Gas MJ | Gas efficiency (illustrative) | Useful energy |
|---|---|---|---|
| Space heating | 20,000 | 80% | 20,000 × 0.8 ÷ 3.6 = 4,444 kWh |
| Hot water | 9,000 | 70% | 9,000 × 0.7 ÷ 3.6 = 1,750 kWh |
| Cooking | 1,000 | 40% | 1,000 × 0.4 ÷ 3.6 = 111 kWh |
Step 3: Electricity needed by replacements
Illustrative efficiencies for efficient electric appliances:
| Use | Electric option | Efficiency (illustrative) | Electricity needed |
|---|---|---|---|
| Heating | Reverse cycle air conditioning | COP 3.5 | 4,444 ÷ 3.5 = 1,270 kWh |
| Hot water | Heat pump water heater | COP 3.0 | 1,750 ÷ 3.0 = 583 kWh |
| Cooking | Induction cooktop | 85% | 111 ÷ 0.85 = 131 kWh |
| Total | 1,984 kWh |
Step 4: Price the extra electricity
The answer depends on when the new loads run and on what tariff.
| Scenario | Rate applied | Extra electricity cost |
|---|---|---|
| A: Flat rate 32 c/kWh | All 1,984 kWh at 32 c | $634.88 |
| B: Time-of-use; heating mostly peak (46 c), hot water timed off-peak (22 c), cooking peak | 1,270 × 0.46 + 583 × 0.22 + 131 × 0.46 | $584.20 + $128.26 + $60.26 = $772.72 |
| C: Free-midday plan; hot water timed to free window, heating peak (48 c), cooking peak | 1,270 × 0.48 + 0 + 131 × 0.48 | $609.60 + $0 + $62.88 = $672.48 |
| D: Solar; hot water and some daytime heating covered by own solar (forgone 4 c FiT) | 700 kWh solar × 0.04 + 1,284 kWh × 0.32 | $28.00 + $410.88 = $438.88 |
Step 5: Compare totals
| Scenario | Gas removed | Extra electricity | Annual change |
|---|---|---|---|
| A | $1,546.75 | $634.88 | $911.87 saving |
| B | $1,546.75 | $772.72 | $774.03 saving |
| C | $1,546.75 | $672.48 | $874.27 saving (free-midday plan's other rates also change your base bill; compare the whole plan) |
| D | $1,546.75 | $438.88 | $1,107.87 saving |
Now the partial switch: replace only the hot water and keep gas heating and cooking.
- Gas still used: 21,000 MJ × $0.04 = $840 + supply $346.75 = $1,186.75 (saving $360 on gas)
- Extra electricity: 583 × $0.32 = $186.56
- Net saving: $360 − $186.56 = $173.44 a year
Keeping the gas supply charge cuts the saving to a fraction of the full switch. That fixed charge is often the deciding factor.
Costs that are not on your bill
- Equipment and installation: get several quotes; there may be state or federal incentives for heat pumps and reverse cycle units.
- Electrical upgrades: a switchboard or circuit upgrade may be needed.
- Gas disconnection or abolishment: your gas distributor may charge to remove the meter or abolish the connection. In Victoria, new homes needing a planning permit have not been able to connect to gas since 1 January 2024, and rules on abolishment fees have been under review; check with your gas distributor and the ESC.
- Timing: replacing appliances when they fail is usually cheaper than replacing working ones.
You can test the payback of the upfront cost against the yearly saving with the payback calculator (enter the net upgrade cost as the cost and the saving from Step 5).
Choosing an electricity plan after the switch
All-electric homes use more electricity, so the plan matters more. Compare plans with your new expected profile using the step-by-step comparison, and test time-of-use and free-midday options with the flat versus time-of-use worked example. The pricing overview explains gas and electricity bill structures.
FAQ
Is gas always more expensive to run than electric?
No. It depends on gas and electricity prices where you live, appliance efficiency and timing. Efficient heat pumps and reverse cycle systems often cost less to run at common tariffs, but an old, inefficient electric system can cost more than gas.
Should I close the gas account as soon as I stop using it?
If you have no gas appliances left, closing the account stops the supply charge. Ask your retailer and distributor about final reads and any disconnection or abolishment fees first.
What about bottled LPG?
LPG is priced per cylinder with rental fees rather than a daily supply charge. The same efficiency comparison applies, but the cost structure differs.
Sources
- Energy Made Easy — compare gas and electricity plans
- Victorian Energy Compare — Victorian gas and electricity offers
- Essential Services Commission — Victorian gas connection and retail rules
- Department of Climate Change, Energy, the Environment and Water — household energy upgrade information
