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Many Australians want to go fully electric. But it’s often hard to know where to start. Solar? A home battery? Or quitting gas?

To find the best way to make the shift, we modelled three pathways for a three-bedroom house in Melbourne’s western suburbs.

These pathways show it’s important to do things in the right order. It’s best to start by lowering energy demand through better insulation and stopping draughts, and then switch from gas heating to an efficient reverse-cycle air conditioner. Home batteries should ideally be done last.

What did we do?

We used benchmark data to model a household with ducted gas heating, gas hot water and cooktop, common electric household appliances and a petrol car.

Each year this household uses 5,300 kilowatt-hours of electricity, just under 50 gigajoules of gas, and about 1,230 litres of petrol (to drive 11,100 kilometres). This costs $2,477 for electricity, $1,494 for gas and $2,255 for petrol. Total energy costs are $6,226 a year.

We modelled replacing these with a 10-kilowatt ducted reverse-cycle air conditioner, a hot water heat pump and an induction cooktop.

We also modelled two further options: one where the household switches to a mid-range EV with a battery of about 60kWh and another where the household keeps its petrol car.

Which pathway?

We tested three pathways to going electric. These don’t include rebates or the cost of the EV.

Pathway 1a – all electric, no battery, EV

Here, the household adds a large 11.76kW solar array, gets off gas and replaces its petrol car with an EV.

Although total electricity use rises, the grid electricity bill falls due to solar. The new electricity bill would be about $1,800. Because gas and petrol costs fall to zero, the household saves about $4,400 yearly.

Total cost: about $32,600.

Pathway 2a – all electric, medium home battery, EV

This pathway mirrors the first, but adds a 13.5kWh home battery at the end. The power bill falls to about $950. Savings would be about $5,300.

Total cost: about $48,100.

Pathway 3a – all electric, large home battery, EV

Here, the household doubles storage to 27kWh. The power bill drops to about $600. It doesn’t reach zero due to low solar over some periods and annual supply charges. Annual savings: about $5,900.

Total cost: about $56,400.

Stacking rebates

Governments offer a range of rebates and subsidies for households to go electric.

Federal incentives

Pathway 1: Applying a solar rebate means the cost falls to just under $30,000.

Pathway 2: Using solar and battery rebates, the cost falls to about $41,700.

Pathway 3: After both rebates, the cost falls to $47,800.

State rebates

In Victoria, the maximum possible state support comes to just over $6,000.

This includes $1,400 for solar, $1,400 for locally made hot water, and indicative discounts of about $2,500 to replace ducted gas with a 10kW reverse cycle air conditioner, $560 to switch from gas hot water to electric and $140 for induction cooktops. These are maximums, not entitlements, and there are eligibility requirements.

If the household was eligible for all federal and Victorian rebates, the total cost would fall to about $23,900, $35,800 and $41,800 for the three pathways, respectively.

Electrify in the right order

Our modelling suggests an optimal order for going electric.

1. Reduce demand

The first step is making the house more energy efficient by sealing gaps, boosting insulation and adding shading to stop direct sun. This can make it possible to install smaller appliances.

2. Go solar

Solar is a no-brainer almost everywhere. When choosing the size, it’s best to go bigger to power a future all-electric home.

In Melbourne, a 11.76kW array would produce about 15,400kWh a year. Set hot water systems, appliances and EV chargers to run during the day to maximise use of solar. Our modelled all-electric household with an EV uses 8,500kWh a year in total, including 1,800kWh for EV charging.

3. Get off gas

First, replace expensive older gas heaters with a correctly sized reverse-cycle air conditioner. This will bring immediate savings and can also cool in summer.

Next, replace gas hot water with a quiet, efficient heat pump.

Then replace gas cooktops with induction. These can be expensive, so consider trialling a portable induction hob. Finally, abolish the meter.

4. Consider a battery

Batteries should only be installed if they are useful. The most common use is releasing stored power from solar to avoid peak evening rates.

Home batteries are more valuable once gas appliances and petrol cars have been replaced and the home is fully electric. In our model, the first battery saves about $852 a year, while doubling storage saves only another $355 a year. This is why they should be done last if possible.

How quickly does this pay off?

Unlike other home improvements, householders can often recoup the cost of going electric. But payback time differs a lot. Quitting gas can rapidly pay itself off, while oversized home batteries can take much longer.

For our three pathways for a household with an EV, simple payback takes 5.4, 6.8 and 7.4 years respectively. Zero- or low-interest loans offered by some governments can reduce upfront cost, but will push payback time back roughly 2–3 years.

To optimise payback, it’s best to begin by improving the building to reduce energy use, shift away from gas to efficient electric appliances, use solar directly if available and then buy a home battery if warranted.

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