You’ve probably noticed your gas bills creeping up. You’ve heard whispers about the state government’s plans to phase out gas connections. Or you’re tired of paying to heat your home with a system costing more each year.
Here’s what’s happening: Victoria’s phasing out gas, and the timeline’s tighter than most homeowners realize.
From January 1, 2027, all new homes and most commercial buildings in Victoria must be built all-electric. No new gas connections will be permitted. When your gas hot water system reaches end-of-life after March 1, 2027, you’ll need to replace it with an efficient electric alternative like a heat pump.
2026 is your window to plan, prepare, and make the switch on your terms.
What This Means for Your Wallet
Let’s look at what this transition costs you.
The average Victorian home saves around $2,230 per year by going all-electric when paired with an existing solar PV system. Without solar panels, you’re looking at around $1,900 in annual savings.
Gas heating costs for a typical Melbourne household range from $800 to $1,500 per year. Electric heating through reverse-cycle air conditioners runs between $500 and $900 annually. Add solar panels, and those costs drop even lower.
This isn’t a small difference. Over five years, you’re looking at potential savings between $9,500 and $11,150.
Victoria’s Gas Dependence Is Ending
Around 80% of Victorian homes are connected to gas. We’re the most gas-reliant state in Australia. We’re the biggest users of residential gas in the country.
The gas sector contributes about 17% of Victoria’s emissions. Before the ban, approximately 40,000 of the 50,000+ homes built annually would connect to the gas network.
That infrastructure is being phased out, and gas prices are rising as a result.
Gas in Victoria costs more each year. Projections show this trend will worsen over the next five years compared to electric. Maintaining a shrinking gas network means higher prices for fewer users.
Why Split System Air Conditioning Installation in Melbourne Makes Sense
When you complete a split system air conditioning installation in Melbourne, your new system will use inverter technology. Instead of turning on and off repeatedly, they adjust compressor speed to maintain your desired temperature.
This leads to lower power consumption compared to older systems or ducted gas heating.
You also get zoned climate control with split system air conditioning installation. Manage temperatures room by room without conditioning your entire house. This reduces energy consumption in ways traditional gas heating never could.
Pro tip: Split systems heat and cool, giving you year-round comfort from a single system. Gas heating only works one way.
Your Health Benefits from the Switch
Evidence is emerging about the potential health risks associated with gas in the home. A comprehensive 2023 study conducted by Asthma Australia revealed that the combustion of gas during cooking and heating produces harmful air pollutants that trigger asthma flare-ups and contribute to the development of asthma.
Modern electric heating systems eliminate these indoor air quality concerns entirely.
Gas heating systems also carry the serious risk of carbon monoxide poisoning. Faulty heaters, inadequate ventilation, or aging equipment can lead to dangerous carbon monoxide leaks. This colorless, odorless gas is potentially deadly. Electric split systems eliminate this risk completely.
If you have children, elderly family members, or anyone with respiratory issues in your home, these health considerations matter more than the cost savings.
The Government’s Making It Affordable
Victorian households and businesses meeting certain criteria qualify for VEU (Victorian Energy Upgrades) gas-to-electric rebates. Not sure if you’re eligible? Get in touch and we’ll tell you in minutes.
Access rebates through the VEU program for reverse-cycle air conditioning, with incentives of up to $8,000 for space heating replacements.
New home buyers save $4,600 before they move in through bulk rebates for heat pumps and efficient systems.
These programs won’t last forever. As more homeowners make the switch, funding priorities will shift.
What Happens If You Wait
Infrastructure supporting gas is shrinking and gas bills are increasing.
Fewer technicians will specialise in gas systems. Parts will become harder to source. Service calls will cost more.
When 2027 arrives, your options narrow.
Making the switch in 2026 gives you time to research systems, compare quotes for air conditioner installation in Melbourne, access rebates, and plan the installation around your schedule. Waiting until you’re forced to change means making decisions under pressure with potentially fewer incentives available.
Your Next Step
Start by getting quotes for split system air conditioning installation in Melbourne. Talk to electricians about your home’s capacity and whether upgrades are needed.
Add up your gas heating costs over the past year. Compare them to projected electric heating costs with a modern split system.
Check your eligibility for VEU rebates and other government incentives with an approved VEU installer. These programs make the upfront investment more manageable.
2026 is your year to make this transition on your terms, with support, and with time to get it right.
The phase-out’s happening whether you’re ready or not. Book a call with iPlug Green Energy for an obligation-free quote and find out what switching to split system air conditioning will cost for your home.
