Victoria bans gas rebates and incentives for homes as shift to all-electric gathers pace

The Victorian government has banned gas companies from offering cash incentives or rebates to households that install major new gas appliances, or connect to the gas network, in the latest policy move to wean the state’s homes off the fossil fuel.

State energy minister Lily D’Ambrosio on Thursday gazetted an order under the Gas Industry Act to prohibit distribution networks from the practice, as part of the Allan government’s updated Gas Substitution Roadmap.

Already, the state has banned gas connections in new homes and government businesses, with planning permits for new homes and residential subdivisions only allowed to connect to all-electric networks from the first day of January this year.

But gas companies have continued to lure customers in the other direction, despite the overwhelming evidence that using gas for home heating, hot water and cooking is a higher cost, higher emissions and unhealthy option.

Last year, distribution company Multinet offered customers $500 off the price of “major” gas appliances such as hot water, home heating and pool heating, and a $100 rebate for “minor” appliances like cooktops and BBQs.

A $500 “Connection Bonus” was also on offer as a once-off payment to an existing property that connects to gas for the first time.

Jay Gordon, an energy finance analyst with IEEFA, says that encouraging consumers to buy new gas appliances exposes them to higher energy costs and the risk that, as other households get off gas, they will be left stranded when the network is wound down.

Gordon says that while it is sensible to ban gas companies from luring new customers and encouraging the connection of new appliances, the government it still sending mixed messages about the future of the reticulated gas network.

“While this policy is a sensible step, it also highlights the need to address the root cause of the issue, which is that our regulatory system currently encourages gas networks to grow at a time when we need them to start winding down,” said Gordon.

“Gas is no longer the cheap household fuel it once was. All-electric homes are the most cost-effective option for Victorians, and it’s increasingly clear that a managed phase-down of gas networks is in the long-term interests of consumers.”

Gordon says the gas company claim that their networks will be used to pipe renewable hydrogen into homes in the future should also be put to bed.

“It is not economically viable for households, and is not compatible with the appliances that are the target of these rebates,” he says.