Home owners in Victoria will no longer be forced to replace broken gas heating systems or cooktops with electric alternatives, following changes announced by the state government to its electrification policies.
Originally, the government had proposed a mandatory switch from gas to electric heating and cooking appliances when existing units failed. Under the revised plans announced this week, the requirement has been abandoned.
Gas hot water systems will still be phased out, but on a delayed timeline and with added flexibilities.
From 1 March 2027, broken gas hot water units must be replaced with efficient electric alternatives, a shift the government said will save households roughly $330 per year, or $520 when combined with solar. Exemptions will be available if the replacement process is too costly or impractical due to site constraints.
The changes form part of Victoria’s broader Gas Security Statement, announced by Premier Jacinta Allan and Energy and Resources Minister Lily D’Ambrosio, which aims to secure gas supply for Victoria’s industries, protect jobs and reduce long‑term energy costs.
“We are not just making sure Victoria has the gas it needs – we are reserving it for industry,” said Premier Allan. “Families will pay less on their energy bills, industry will get the gas it needs – and Victorian jobs are protected.”
The statement outlines steps to unlock nearly 12 petajoules (PJ) of gas per year by 2029, rising to 44 PJ per year by 2035, enough to cover roughly 85 per cent of Victoria’s anticipated industrial gas demand.
From 1 January 2027, new homes must be fully electric, potentially saving owners up to $1,820 per year when combined with solar. New commercial buildings (other than those for industrial, manufacturing or agriculture) must also be all‑electric from that date.
“The new building regulations and the housing and building standards will provide certainty for households and businesses, improve energy efficiency, and help to keep bills low,” said Housing and Building Minister Harriet Shing.
Additional Minimum Energy Efficiency Standards will apply to rental properties and public housing from 1 March 2027. These include mandatory electric heating and hot water, ceiling insulation, draught sealing, and the installation of efficient shower heads, making homes more comfortable and reducing energy costs for tenants.
“This is an important step towards making rental properties safer, more comfortable and more energy efficient — giving renters peace of mind for both winter and summer and driving down their bills,” said Consumer Affairs Minister Nick Staikos.
To support the shift towards electric alternatives, Victoria is investing $9.5 million in an Industry Diversification Program to help businesses adapt to rising demand for electric hot water appliances.
“We’re prioritising our gas supply for Victorian manufacturers and helping to boost our appliance manufacturing capabilities — so we can keep up with demand for efficient electric appliances,” said Industry and Advanced Manufacturing Minister Colin Brooks.
Rewiring Australia, a clean energy advocacy group, backed Victoria’s approach, citing long‑term cost savings and health benefits.
“Gas forces households to pay higher energy bills and leaves them at the mercy of volatile global energy markets. Electric heat pumps and space heating systems are more efficient, more reliable, don’t pollute your home and significantly reduce energy bills,” said Saul Griffith, Rewiring Australia Chief Scientist.
Rewiring Australia’s analysis found that the average fossil‑fuelled Victorian home can save $5,100 over 15 years by going fully electric, including solar and an electric car.
“By requiring landlords to electrify their investment properties when gas hot water units need to be replaced, Victoria’s new standards will crucially reduce energy bills for renters,” said Francis Vierboom , Rewiring Australia CEO.
“This is vital because renters have little choice in how their home is powered and cannot as easily benefit from cheaper electric alternatives as homeowners. Victoria’s efficiency standards are nation‑leading and we strongly encourage other states to urgently take similar steps to reduce household bills.”
Meanwhile, the City of Sydney has announced its own electrification measures, requiring new residential developments to be fitted with electric cooktops, ovens and space heating/cooling from 1 January 2026, with gas hot water still permitted for now.
The council will consult the public on extending these rules to cover new residential buildings (including hot water) and large office buildings, hotels and serviced apartments from 1 January 2027.
“Gas is a dirty fossil fuel that has no place in homes. Stopping new gas connections is a no‑brainer for cutting emissions and making sure our homes aren’t making us sick,” said James Conlan, Electrify Your Council Campaign Manager at 350 Australia.
“Doctors for the Environment Australia thanks City of Sydney for putting the health of residents first. Gas used in the home also releases nitrogen dioxide, benzene and formaldehyde, which are known to trigger childhood asthma. The City of Sydney has set a great precedent for other councils in NSW to follow,” said Shaun Watson, neurologist and Doctors for the Environment board member.