Homeowners in Victoria will be exempted from replacing broken-down gas heaters and hot water systems with electric models under watered-down rules.
Controversial state plans to force homeowners to replace busted gas appliances with electric models have been scaled back, as debate rages over future power bill impacts.
The Victorian government has ticked off sweeping appliance electrification regulations for homes and businesses.
Under a preferred draft policy from December, it would have been mandatory for residential homes to switch gas hot water and heating systems to electric versions at the end of their life.
Gas cooktops were excluded.
But the incoming rules have been altered to grant exemptions for electric hot water systems that are too expensive to install, cannot fit the space or require a switchboard upgrade for non-safety reasons.
Broken-down gas hot water heaters can also be repaired and systems removed and reinstalled during renovations.
In addition, those who own and live in their home will no longer be subject to gas heating replacement bans.
The changes were supposed to come into force in 2026 but have been pushed back to March 2027.
Premier Jacinta Allan denied it was a backflip, saying the softened rules were in response to stakeholder feedback.
“We’ve come back with a package that is about slashing household energy bills,” she told reporters at a home at Reservoir in Melbourne’s north on Tuesday.
All new homes and new commercial buildings – other than industrial, manufacturing and agricultural buildings – will still be required to be built all-electric from January 1, 2027, as previously planned.
Similar requirements are on the way for all residential and large commercial buildings and hotels in Sydney’s CBD from the start of 2026.
Minimum energy efficiency standards are also coming for Victorian rental properties and public housing from March 2027, including mandatory electrification of hot water systems and heaters at expiry.
The revised home and business regulation changes were announced alongside a Gas Security Statement to avoid shortages forecast for southeastern states by 2029.
The state government said its policies will save just under 12 petajoules (PJ) of gas each year by 2029 and 44PJ by 2035, enough to meet 85 per cent of Victoria’s forecast industrial demand.
However, fewer customers on gas will eventually push up network distribution costs for those left behind.
Energy minister Lily D’Ambrosio argued it wasn’t an immediate problem as state gas connections are rising and Victorian residents are predicted to still be using more gas than every other state combined by 2035.
“It’s a bit of scaremongering by those people who want to protect their interests,” she said.
“Everybody wins from this.”
The Victorian Chamber of Commerce and Industry chief executive Paul Guerra was unconvinced, describing the imposition on landlords as “class warfare” and disputing the government’s claim of cheaper power bills.
“The government’s writing cheques on electricity that it may not be able to cash,” Mr Guerra told Melbourne radio station 3AW.
The Australian Pipelines and Gas Association welcomed fewer blanket bans but argued the rules created a risk of unnecessary red tape and added pressure on households and regulators.
Opposition energy spokesman David Davis said the reforms were a continuation of the Allan government’s “war on gas” and consumer choice.
The Energy Efficiency Council, Environment Victoria, Rewiring Australia and Climate Council all hailed the changes for cost, pollution and health reasons.
Star Mail will look into a local case study to see the benefits of replacing gas heaters and hot water systems with electric models next week.
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