Disconnecting from gas and living in all-electric, solar powered homes could save Australian households thousands of dollars in energy costs, a new study has found – as much as $18,000 over 10 years for the millions of new-build homes expected to built around the country by 2030.
The report, published by the Alternative Technology Association, puts a question mark over the use of gas power in homes in almost every major city of Australia, and categorically rules it out as uneconomic in new-build homes anywhere in the country.
The research found that by choosing an all-electric home with a 5kW solar PV system, a new home buyer would be in the order of $9,000 to $18,000 better off over 10 years, than if they established that home as dual fuel – electricity and gas – without solar.
The shifting scale of financial benefit reflects the modelling for different locations around Australia. The worst return, for example, was found in Melbourne homes, thanks to the lower value of solar PV and “relatively low gas tariffs,” the report said.
But even in Melbourne, a new home owner would be almost $10,000 in front after 10 years, after establishing a gas-free, solar all-electric home.
“There is just no reason economically for new homes to be built with both electricity and gas,” said Dean Lombard, a co-author of the Household Fuel Choice in the NEM report and energy analyst at the ATA.
“This has been the case for many years in Australia’s north, but it’s now also clearly the case in colder climates like Victoria and Tasmania.
“Heat pump hot water and split system air-conditioning systems are just far more efficient than gas appliances and solar systems are cheaper than ever.”
The report, which was commissioned by Energy Consumers Australia, calls on new home buyers as well as the building and energy industries to be educated on the value of all-electric, solar-based homes.
Particularly in light of the rate that new homes are being built around the country. The ATA forecasts that new Class 1 dwelling approvals could total almost two million by 2030, based on 2015 statistics.
And very few of that number (one in 10) would be unable to install solar PV for technical reasons, the report says.
The ATA has also recommended a review of policies and programs that subsidised or supported the expansion of gas networks around Australia.
“Rolling out new gas infrastructure is simply not efficient and is not in the long-term interests of residential households. It locks people into higher energy costs in the long run,” Lombard said.
But the benefits of weaning households off gas, and of avoiding the costs of building out new gas infrastructure in new suburbs, is starting to catching on in some parts of the country.
In the ACT, Territory development laws have been amended to pave the way for a 350-home trial gas-free precinct – a joint venture between the government and local landowners, mostly farmers – as part of Ginninderry Estate, a new suburb being developed by Riverview Group.
And in Victoria, an all-electric, solar installed 230-dwelling housing estate has been established at Cape Paterson, on the state’s Bass Coast.
The ATA estimates that The Cape property development will save a total of $2 million over 10 years by not using gas.
“By eliminating gas from the whole estate and replacing with the highly efficient all-electric home operating systems and solar power, our householders avoid annual gas usage and gas connection costs, as well as the upfront construction costs of connecting to gas and running gas plumbing through homes that occur with gas-connected estates,” said The Cape’s director, Brendan Condon.
As for existing households, the study found that when a home had only one gas appliance, it was always better to replace it – at the end of its life – with an efficient electric one, “in all circumstances and locations.”
For existing households with more than one gas appliance, the equations got a little more complicated, particularly depending on where the house was located.
But in terms of adding solar power, the report confirmed that putting a PV system onto a roof with good solar access was “almost always a good economic decision.
“Even for a household that chooses to purchase new gas appliances, solar is a good investment,” it said.
In the cases where the running cost of gas was lower than for electric appliances, the report said this saving could be outweighed by the value of getting rid of the fixed charge of the gas connection.
Sophie is editor of One Step Off The Grid and deputy editor of its sister site, Renew Economy. Sophie has been writing about clean energy for more than a decade.
This post was published on June 6, 2018 11:14 am
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"But in terms of adding solar power, the report confirmed that putting a PV system onto a roof with good solar access was “almost always a good economic decision."
Did Josh Fredenburg write that?
That's a funny way of saying the best investment you can currently make
Yeah-with something like 25% ROI
The Joshua doesn't believe in home rooftop solar. He wont install it on his home rooftop.
If you have very low consumption and an export limit or low/no feed-in tariff then solar probably wouldn't be a good investment. A rare case, but enough to say it's "almost always" rather than "always" a good investment :)
Or for instance you get a quote from the muppet that quoted me $12k for a 5kW system.
There is a 'special' in my weekend newspaper for a 6 kW JInko 300W panels, Goodwe inverter rooftop system, installed for....$4221.00. I fear it could be a con job at that 'special' price.
Ans still the new housing estates in SW Sydney 'must have the gas' also connected.
I'm sure you are more than me JOE ,but I thought it was now optional?
My brother built a new home in Bradbury ( Campbelltown ) about 10 years ago...had to have the gas. My sister just built a new home in Spring Farm ( Camden )...had to have the gas. Nothing has changed from what I can tell. And of course the gas users in those new estates are now complaining how their gas bills are going up on top of their rising electricity bills. But I tell my siblings to at least install solar atop the roof to cut the electricity bill side of things, as well as for the enviro goodness. They don't listen to me. I've had the rooftop solar ( no gas in my castle ! ) for 10 years now. I was the first in my neighbourhood to go rooftop solar and it has spread like an infection.....I'm pretty chuffed that I led the way around here, just sad that my siblings just refuse to follow my lead.
10Kw system here, and I paid my gas bill $415.00 yesterday from my change box! I throw everything in it everytime I arrive home!
Onya Rob!
Joe, tell your sibs about my story.
Power cost pre solar, Oct 10 2016 to May 3 17, $643.
Power cost post solar, October 2017 to May 10 2018, minus $420.
Despite the July 17 20% increase in power price.
So $643+20%=$771+$420=$1,191.
Repayments on system (8% interest) $80×14=$1,120. So, a profit of $70.
But the deposit was $1,110.
Loan period is 4 years. $1,110÷4=$277.50
Couple of reasons for October to May.
1. The feed in tarrif credit is calculated to 10th of the month. Not yet known for May/June 18.
2. RCAC installed May 4 18, with significant increase in power usage, mostly in dark hours. So May figures not comparable.
Other things to note.
5.3 kW system - 20× QCell panels, Fronius Primo inverter, fully installed, total cost $8,110, October 2017.
Today, I have called my supplier, and explained why I want to know what that system would cost today, but there's nobody except the receptionist in the office until Tuesday. She will find out then, text me, and I will pass the info on.
It is quite obvious that figures will vary with usage, but the higher the daylight usage, the better the return.
A big proportion of a system's cost now is the labour of installation, and stupid low quotes are likely to mean corners cut on the install, but crappy panels and possibly inverter too.
Hope this helps you convince your sibs, Joe.
Revenue neutral for four years, and a free ride thereafter. What's to decide?
Hello again Young Hettie. Well done to you on your Solar Factory. I'll definitely have another talk with my siblings and your story ( as well as mine ) might just finally get them to do the business. Go well young Hettie.
I'd like to see the numbers on this - our marginal cost of gas is $30/GJ (ie $108/MWh) with a daily charge of $1. We have gas HW and cooking, plus heating in the winter. So replacing gas cooking and heating (both at night) would cost $260/MWh for cooking and say $90/MWh equivalent assuming COP=3. HW during the day would cost the FiT of $70/MWh vs $300/MWh for heat pump, so you would have to be a family that uses a lot of hot water to overcome the upfront cost of the heat pump HWS ($3000 installed including stc - and that is only 5y warranty where my gas HWS is guaranteed for 50y and being all stainless will probably last longer than that).
It's complicated, isn't it Mike.
I've decided to keep the instantaneous gas hot water and the bottle ($90 year rental + about $6 month for the gas) because the capital cost of replacement is so high. But the switch from gas to RCAC for heating is another matter altogether.
Won't be able to say for sure until the beginning of May next year how it has all panned out, because as it gets colder the AC will have to work harder to maintain the same temp, but last year gas was costing about $3.00 a day from April to October. It will take a full year of data to be sure of saving on gas and increase on power.
Indeed - I can see for new builds, a mandatory "solar+storage+smarts+no gas+plug for the EV" makes sense! For the legacy sector, baby steps! I look forward to seeing your analysis when it comes.
I wish I had the money for a 5 kwh battery, but the RCAC has mopped up all I could spare for now, and I expect it to take about 5 years to pay for itself in savings cf gas.sounds good..