Rising energy tariffs set to hit homes with gas the hardest

Independent not-for-profit Renew has conducted the first major analysis of how rising tariffs are set to affect homes with gas and all-electric appliances.

Federal Treasury has projected tariffs will rise by 56% for electricity and 44% for gas by 2024 without government intervention. This means households will pay up to $1939 more on annual energy bills, according to the new report.

“Both electricity and gas tariffs are set to rise – but it’s homes that use gas that face the biggest bill increases” said Rob McLeod, Renew Policy and Advocacy Manager.

“Our findings show that households using gas for heating, cooking and hot water could face bill increases of up to $1900 over the next two years. Efficient all-electric homes with solar face more limited increases of $550 to $741.

“All-electric homes with solar can already cut about 75% off energy bills, but rising tariffs mean the gap between all-electric and gas is going to grow even more.

“By 2024 a household in Melbourne will save more than $2700 a year by switching from gas to all-electric.

“Government action is needed urgently to prevent Europe-style bill spikes – and part of that action should be getting homes off gas.”

The report finds that renters are dangerously exposed to rising tariffs.

“The cost to renters of heating is set to shoot up by $200-$500 a year, and up to $900 a year if you are using a gas heater in Hobart. Installing insulation and efficient heating is critical to reducing bills; if landlords won’t do that voluntarily, then governments need to step in and make them do it.”

Renew has also analysed the carbon emissions of household gas.

“All-electric homes already reduce emissions. Our findings show that as more renewables enter the grid those emissions will reduce even more. Meanwhile, high emissions are locked in for the life of a gas appliance,” said McLeod.

The report, ‘Limiting energy bills by getting off gas: All-electric homes after the 2022 energy crisis’, uses detailed energy modelling using Renew’s Sunulator platform and tariff projections used by Treasury in the 2022-23 Federal Budget.

The Federal government has suggested it will announce a policy response to rising household energy tariffs by the end of the year.