For many Australian households in 2026, transitioning from gas to an all-electric home is definitely worth it, offering substantial long-term savings and environmental benefits. While the upfront investment can range from a few thousand dollars for a single appliance to over $20,000 for a whole-home conversion, generous state and federal rebates, coupled with rising gas prices and increasingly efficient electric technology, mean payback periods are shrinking. Expect to save hundreds, potentially over a thousand, dollars annually on your energy bills, especially when paired with rooftop solar.
Historically, gas was often seen as the cheaper option for heating and cooking. However, that paradigm has shifted. Wholesale electricity prices have seen a 12% year-on-year drop across the National Electricity Market (NEM) in Q1 2026, averaging $73/MWh, though South Australia recorded a 33% increase to $88/MWh. Conversely, residential gas prices have continued their upward trend, with year-on-year increases ranging from +2.9% in Queensland to +5.1% in South Australia as of April 2026. This guide breaks down the real costs, potential savings, and available rebates for key household conversions in 2026.
The Cost of Staying with Gas in 2026
Before diving into conversion costs, it’s crucial to understand the financial burden of continued gas use. As of April 2026, average residential gas prices across major eastern states are:
| State | Avg Usage Rate (c/MJ) | Supply Charge ($/day) | Avg Annual Bill |
|---|---|---|---|
| Queensland | 2.45c | $0.80 | $1,090 |
| Victoria | 2.58c | $0.84 | $1,240 |
| New South Wales | 2.72c | $0.88 | $1,320 |
| South Australia | 3.05c | $0.96 | $1,480 |
| Tasmania | 5.471c | $0.817 | N/A (higher) |
Source: EnergyPlans research, April 2026, Aurora Energy Feb 2026 (Tasmania rates are for residential tariffs from Feb 2026 and include GST.)
Western Australia’s Synergy Home Plan A1 tariff has electricity at 32.3719 c/kWh, while natural gas has a supply charge of 26.52 cents per day and usage rates starting at 18.31 cents per unit. The fixed daily supply charge, often around $0.80 to $1.00 per day, adds $292 to $365 annually to your bill, regardless of how much gas you use. Eliminating this charge alone can provide significant savings.
Key Conversions: Costs, Savings & Rebates
1. Hot Water: Heat Pump Systems
Replacing an old gas storage or continuous flow hot water system with an electric heat pump is often the most impactful conversion. Heat pumps are typically three to four times more efficient than traditional electric or gas systems because they move heat rather than generate it.
Typical Installed Costs (2026, incl. Federal STCs & basic installation):
| State | Average Installed Cost (before state rebates) | Out-of-Pocket (after state rebates) |
|---|---|---|
| National Average | $4,527 | N/A |
| NSW | $4,815 | $4,073 (replacing gas) |
| Victoria | $4,366 | $2,807 (replacing gas) |
| Queensland | $4,035 | N/A |
| Tasmania | $6,118 | N/A |
Source: Solar Choice Heat Pump Price Index, May 2026 (Out-of-pocket costs vary based on specific system and eligibility.)
High-end models like Reclaim Energy or Sanden Eco Plus can cost $5,000 to $7,000 for the unit alone, while mid-range options such as iStore or Emerald Energy might be $2,000-$3,500. Expect overall installed costs for a quality system to be between $3,000 and $7,000 before state rebates.
Running Cost Savings: A heat pump can reduce hot water energy costs by 60-75% per year. For a family of four, this translates to annual savings of $600-$700 compared to an old gas system. Running costs can drop to as low as $150-$300 per year, or even $60-$160 per year if paired with rooftop solar set to a midday timer.
Rebates:
- Federal Small-scale Technology Certificates (STCs): An upfront discount applied by installers, typically $300-$800, depending on system size and zone.
- NSW Energy Savings Scheme (ESS): Upfront discounts of $800-$1,800 when replacing an existing electric storage unit, or $400-$800 when replacing gas. A minimum customer co-payment of $220 applies.
- Victorian Energy Upgrades (VEU) Program & Solar Homes Rebate: Stackable incentives. VEU provides an upfront discount based on energy savings, while Solar Victoria offers up to $1,000 (or $1,400 for Australian-made systems like Rheem, Dux, Rinnai) off the purchase price.
- Queensland Climate Smart Energy Savers: Rebates of $300-$1,000 for 4-star+ rated heat pump or solar hot water systems.
- South Australia Retailer Energy Productivity Scheme (REPS): Discounts on heat pump hot water systems are offered by energy retailers. Benefits are now more targeted towards Priority Group households.
2. Heating & Cooling: Reverse Cycle Air Conditioners
Modern reverse cycle air conditioners are highly efficient, providing both heating and cooling from a single unit. They are 300-600% efficient, meaning for every 1 unit of electricity consumed, they can move 3 to 6 units of heat into your home. This makes them significantly cheaper to run than gas ducted heating.
Typical Installed Costs (2026):
| System Type | Unit Cost (approx.) | Installation Cost (approx.) | Total Installed Cost |
|---|---|---|---|
| Single Split System | $600 - $2,600 | $600 - $1,200 | $1,400 - $4,800 |
| Multi-Split System | $2,500 - $5,000 | $1,700 - $3,000+ | $4,200 - $8,000 |
| Ducted System | $5,000 - $10,000+ | $3,000 - $10,000+ | $8,000 - $20,000 |
Source: hipages, SolarQuotes, CB Climate Control, Thomas Airconditioning, 2026 (Costs vary significantly by brand, size, complexity, and location.)
Popular brands include Daikin, Mitsubishi Electric, Fujitsu, Carrier, Midea, and Panasonic.
Running Cost Savings: For most Melbourne households, running a reverse cycle split system now costs significantly less than a gas ducted system for the same warmth. Upgrading to a VEU-approved air conditioner can lead to up to 40% lower energy bills.
Rebates:
- NSW Energy Savings Scheme (ESS): Upfront discounts are available for installing new energy-efficient air conditioners or replacing old ones. Discounts can be up to $550 for a new 6kW system or up to $560 for replacing an old 6kW split system.
- Victorian Energy Upgrades (VEU) Program: Provides discounts for high-efficiency heating and cooling systems.
- Queensland Climate Smart Energy Savers: Offers $300 for 4-star+ rated air conditioners. Additional benefits may be available for PeakSmart air conditioners from Energex or Ergon Energy.
- South Australia Retailer Energy Productivity Scheme (REPS): Retailers offer discounted energy-efficient reverse-cycle air conditioning upgrades, with higher benefits for Priority Group households.
3. Cooking: Induction Cooktops
Induction cooktops offer precise temperature control, faster cooking, and improved safety compared to gas. They are also significantly more energy-efficient, transferring 85-90% of energy to the pot, compared to 40-50% for gas.
Typical Costs (2026):
| Item | Estimated Cost (AUD) |
|---|---|
| Induction Cooktop Unit | $500 - $5,000 |
| Gas Line Disconnection | $250 - $400 |
| Electrical Work | $500 - $2,000 |
| Benchtop/Cabinet Mods | $500 (if needed) |
| Total Conversion | $2,000 - $8,000 (before rebates) |
Source: Homes To Love, The Good Guys, Winning Appliances, Home Upkeep, 2026 (Costs vary by brand, features, and installation complexity.)
Popular brands include Bosch, Westinghouse, Electrolux, Smeg, Miele, and Fisher & Paykel.
Running Cost Savings: An induction cooktop typically costs $60-$110 per year to run, compared to $120-$220 for a gas cooktop. If you primarily cook for less than an hour a day, the annual running cost difference is under $100, meaning the biggest savings are in heating and hot water.
Rebates:
- Victorian Energy Upgrades (VEU) Program: Offers rebates of up to $140 off an induction cooktop. Eligibility requires a current gas/LPG connection and the home to be at least two years old.
- Other States: As of May 2026, specific state-level rebates for induction cooktops are not widely available in NSW, QLD, SA, WA, or TAS. South Australia’s REPS program does not currently offer appliance rebates for induction cooktops.
Potential Additional Costs: Electrical Upgrades
Switching multiple gas appliances to electric may require an upgrade to your home’s electrical infrastructure, particularly if your switchboard is older or your existing capacity is insufficient. This is a common and necessary step for many all-electric conversions.
Typical Costs (2026):
| Upgrade Type | Estimated Cost (AUD) |
|---|---|
| Basic Switchboard Upgrade | $700 - $1,200 |
| Standard Switchboard Upgrade | $1,200 - $2,000 |
| Advanced Switchboard Upgrade | $2,000 - $4,500 |
| Adding New Circuits | $200 - $400 per circuit |
| Partial House Rewiring | $2,000 - $2,500 (incl. switchboard) |
Source: ServiceTasker, Allec Electrical Solutions, hipages, Erose Electrical, 2026 (Costs vary by complexity, location, and electrician rates.)
This investment ensures your home’s electrical system can safely handle the increased load and is a critical step towards future-proofing your energy setup.
Maximising Your Savings & Rebates
- Get Multiple Quotes: Always compare quotes from several licensed and accredited installers. This is crucial for all upgrades, especially for heat pumps and air conditioners, as rebate amounts can vary between providers. For more tips on this, see our guide on The Ultimate Guide to Switching Electricity Providers in Australia 2026: Save on Your Home Energy Bills.
- Stack Rebates: Where possible, combine federal STCs with state-specific programs like VEU (Victoria) or ESS (NSW) for maximum upfront savings. Always confirm eligibility with your installer.
- Consider Solar Power: If you don’t have solar, installing a system can dramatically reduce the running costs of your new electric appliances, effectively making your daytime energy use almost free. This is especially true for heat pumps and induction cooktops. Explore our guide: Are Australian Solar Panel Prices Rising in 2026? What Homeowners Need to Know About Costs and Rebate Changes.
- Optimise Usage: Utilise off-peak electricity tariffs and smart timers to run high-consumption appliances like heat pumps during periods of cheaper electricity, or when your solar panels are generating power. Learn more about optimising your appliance usage in our article: How Much Do Your Winter Appliances Really Cost to Run in Australia 2026? A State-by-State Guide.
- Check for Energy Bill Relief: While the universal federal Energy Bill Relief Fund for FY25-26 (offering $150 in two $75 instalments) has largely concluded by December 2025, state-based concessions remain available for eligible households. Consult our guide on Navigating Australian Energy Bill Relief and Utility Costs in 2026: Your Essential Guide for current state-specific support.
“The average Victorian household saves $400–$900 per year by switching to all-electric, with gas appliances typically costing 2–4 times more to run than their electric equivalents due to rising gas tariffs.”
Factors to Consider Before Converting
- Your Current Appliances: The age and efficiency of your existing gas appliances play a role. A very old, inefficient gas heater offers more significant savings potential when replaced than a newer, high-star-rated one.
- Local Regulations: Victoria, for example, is accelerating its gas phase-out plans, with new homes required to be all-electric from 2024, and from March 2027, failed gas hot water systems must be replaced with electric alternatives. Other states may follow suit.
- Property Type: Houses are generally easier to convert than apartments, which may face body corporate restrictions on appliance upgrades or outdoor unit installations.
- Your Energy Plan: Switching to an all-electric home makes choosing the right electricity retailer and tariff even more critical. Look for plans with good off-peak rates or solar feed-in tariffs if you have panels. See our guide: Best Electricity Plans in Australia 2026: A Comprehensive Guide for Households to Cut Costs.
Bottom Line
In 2026, converting your Australian home from gas to electric is overwhelmingly a smart financial and environmental decision. While the upfront costs can be significant, the combination of rising gas prices, decreasing wholesale electricity costs, and substantial government rebates creates a compelling case for electrification. The biggest savings are typically found in hot water and home heating, where efficient electric heat pumps and reverse cycle air conditioners can drastically reduce running costs. Factor in the potential to pair these with rooftop solar for near-zero energy bills, and the long-term value becomes undeniable. Start by targeting your oldest, most inefficient gas appliance, research the specific rebates available in your state, and get multiple quotes to ensure the best outcome for your household.