22 May 2024

Here's the maths on gas versus electricity costs: the numbers may surprise you

| Dione David
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pot of water on a stove

Gas cooktops have about a third of the energy efficiency of electric. Photo: Bill Oxford.

There’s a lot of talk about the financial benefits of switching from gas to electricity – but have you crunched the numbers?

Huglo Solar co-director Lee Hindley has, and he reckons the right system can slash your energy bills by up to 60 per cent.

Savings can vary greatly, and while online deals for solar power systems might look good on paper, the economics only work in your favour if you can figure out what you use and how you use it. Lee says it mostly boils down to three main appliances – cooktop, hot water system and heating system.

Gas cooktops are perhaps the most tangible test subjects.

“When you cook with an open flame, only about 30 per cent of the heat generated by burning that gas is transferred to the pan, and the rest heats the air around. With induction cooktops, it’s about 90 per cent,” Lee says.

“It’s a clear winner in terms of efficiency, the environment and your hip pocket, but also possibly your health, as open burning of natural gas in your home has also been shown to be a trigger for asthma sufferers.”

As for hot water systems, electrical heat pumps are up to four times more efficient than their gas counterparts according to Lee.

He says gas at best provides a “coefficient of performance” of 0.8 per cent, meaning only 80 per cent of the potential energy gas provides actually heats the water. Hot water heat pump systems on the other hand have a coefficient of performance of up to four.

“That means 1 kW of electrical energy can provide up to 4 kW of heating energy, making them incredibly efficient,” he says.

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The two options for gas are gas storage tanks and instantaneous hot water systems. A storage tank costs a family of four about $650 a year, while an instantaneous costs about $500.

Using a heat pump on the standard electrical tariff would cost that same family of four about $300.

“Gas water systems were great when they first came out and definitely cheaper than electrical alternatives. But the technology has changed and now people using renewables are better off,” Lee explains.

“With a heat pump tied to the right solar system, a hot water system can run almost entirely on green energy and effectively reduce your water heating bill to $0.”

The usage rates alone make a compelling case before you factor in gas supply charges, which Lee says come to roughly $1 a day simply to have gas connected to your home.

Whether this is worthwhile depends on the number of gas appliances you’re using.

“If you’ve mostly switched to electric and only have gas connected for your hot water system, then you’re paying $650 in usage a year plus an extra $1 per day just to keep the connection for that one appliance. So you’re paying a thousand bucks a year just to heat your water,” Lee points out.

group pf people outside a warehouse

To work out the systems that’ll work best for you, get help from reputable professionals. Photo: Thomas Lucraft.

Household heating systems, which Lee says likely account for the biggest energy expense for most Canberrans during winter, have the potential to save people thousands.

He says reverse-cycle air heating systems are about half the cost of gas-powered ducted systems.

If you’ve invested in a battery, you can further offset your costs by still allowing your solar power to continue powering these appliances through the night. With the right system, you can heat your water through the day, cook your meals at night and keep cool in the summer and warm in the winter, all powered by your own renewable energy.

The economics only work in your favour if you’re exporting your excess energy.

“What providers give you for the energy you export is about a third of what they charge you. So make sure you’re only selling energy you don’t need,” he said.

“If you combine all of this with a time-of-use electricity plan, you can aim to only draw the small amounts of power you need from the grid to be at the cheapest possible price.”

“Remember the goal is to be self-sufficient, so always consume your own energy directly first.”

READ ALSO Watch out, time of use and peak demand billing have some serious pitfalls

Government discounts can save you hundreds on installation costs, and incentives like the Sustainable Household Scheme, which offers eligible ACT residents 10-year interest-free loans of up to $15,000, are helping residents get off the gas.

Lee says even if you don’t require financing, it’s a “no brainer” to keep the money in your own pocket as long as possible, but many residents put it off due to the cumbersome application process.

It’s one way Huglo sets itself apart.

“Our team can run through the customer’s usage and all the requirements to apply for the scheme and do paperwork on their behalf,” he says.

“I underwent the application process myself when I installed a heat pump in my home, and it was awful. Our team does it several times a day, so it’s like clockwork and takes the headache out of the process.”

For more information, contact Huglo.


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What a stupid, and completely irrelevant, question!

Capital Retro12:02 pm 31 May 24

Maybe you could send an email with the same comment to the author of this paper:


Capital Retro6:32 pm 30 May 24

Just noticing in the pic of the Huglo people that there are 11 men and 1 woman.

Are we to assume that this is the gender ratio throughout the entire renewables industry?

@Capital Retro
“Are we to assume that this is the gender ratio throughout the entire renewables industry?”
Is there a point to your inane comment, CR?

If you (mistakably) think your comment is relevant, perhaps you’d like to share the gender ratio for the fossil fuel industry?

Capital Retro10:18 am 31 May 24

Well all the counter staff in the fossil fuel energy station I go to are female so there’s a clue for you.

And if you think my comment was irrelevant why are you even responding?

Why don’t you criticize me for breathing while you are at it?

@Capital Retro
Oh wonderful, CR, your survey of one, i.e. yourself, is a clue to the whole fossil fuel industry.

Despite your lack of relevance, your falsehoods and fabrications still should be called out.

Capital Retro6:25 pm 30 May 24

Not just my experiences, JS.

And they conclusions the “scientists” make are actually just “links”.

@Capital Retro
Yeah it’s ok, CR, we understand that you have trouble accepting actual published science over your denialism, but feel free to continue in your delusion.

Electricity seems to be much more expensive for heating. At our previous house we had ducted gas heating and it was pretty cheap. At our new house we have electric heating and the cost is more than double our old house. Although the houses are slightly different it isn’t an exact comparison (however, our new house has much better insulation), but for us using electricity for heating is significantly more expensive. We can no longer afford to heat the house as much and have to keep the heater off and be cold some of the day.

Perhaps it’s not only about the financial numbers or what’s right for the planet.

Interesting article from UNSW on health issues associated with gas cooking:

Capital Retro12:28 pm 30 May 24

Nothing new there JS. I have a range hood over my gas cooktop which also has a single electric hot plate. The fumes from the burning gas are expelled through the roof into the atmosphere. The same atmosphere where tonnes of toxic emissions are emitted from the methane gas that is burned at the MLRMC.

I know a few people who have asthma and none of them have cited gas as a problem.

“The same atmosphere where tonnes of toxic emissions are emitted from the methane gas that is burned at the MLRMC.”

Toxic emissions hey?

Please do give us some links around the “toxicity” and health impacts of these emissions from the Methane capture and power systems at the Mugga tip.

And while you’re at it, perhaps you can provide some comparisons to the health impacts from the “toxic” emissions of wood heaters in the ACT.

@Capital Retro
Oh, of course, CR your experience completely debunks the science of the studies therefore they are false. You denying science – nothing new there.

Capital Retro6:29 pm 30 May 24

“When you’re burning gas, you’re largely burning methane. And the problem with that is that you create toxic compounds as a result,” says A/Prof. Green.

This was in the report that you gave the link for and Methane is the same wherever it is so let’s see the spin you come up with to worm your way out of it.

Capital Retro,
Almost like health impacts can be different based on the gas concentrations and location that emissions occur. Weird huh.

I notice you haven’t answered my questions despite spewing more toxic emissions of your own.

Where are the numbers for how much money i can save converting my gas cooktop to induction? A bit of blah around efficiency but what about the amount of $? Given the straight jump to water heating intge article makes me think that I won’t make back the cost to change over anytime soon.
Does anyone have numbers on this?

Incidental Tourist7:35 pm 27 May 24

Most apartment residents miss out on solar energy as they don’t own roof space.

Incidental Tourist8:42 am 27 May 24

Most apartment residents do not own roof space and have no control as to what they can use.

It really depends if you have the cash upfront to invest.
You also have to factor in replacement of the devices when they fail.
Heat pump hot water and reverse cycle systems will not come near the life expectancy of a gas heater, or electric storage hot water system.
I have a gas ducted heater than will live another 20-30 years I reckon, and my mum replaced her 45 year old electric hot water system recently.
I installed a reverse cycle system in my place, primarily for the air conditioning. The price I pay per year for energy (gas and electricity) hasn’t changed, as any savings from heating in winter I spend on cooling in summer.

People need to be aware that heat pump hot water and reverse cycle systems are noisy and because they have to be external to the house, can annoy neighbours.

Now solar….. that’s a mixed bag. What’s the payback period now that the power companies are introducing charges for exporting to the grid. Batteries at this stage are just too expensive with a limited life, so there is no reasonable payback period.

Just don’t trust anyone selling you something with figures they concoct. Do your own sums to see if it’s worthwhile.

Gas is less likely to kill you if you have a pacemaker. Electricity is less efficient because most of it is from brown coal. That’s the thing that burns to make the electrons flow in our homes. Then with the vast network we will have there are transmission losses.

If you power your appliance with solar it’s not free as you are not getting the feed in tariff you otherwise get.

Artivle is full of half truths. You can’t use solar to recharge your water heater if you have showers at night. solar hot water may be cheaper than solar and electric.

Many inverter hot water heaters won’t work so well in the negatives and if they boost because they don’t get hot fast enough they are much worse than gas.

Maybe for articles you should get more than one source..

“Gas is less likely to kill you if you have a pacemaker. ”
How many people do you know with a pacemaker who use a gas-powered mobile phone, gooterz? It’s not electricity that is the issue with pacemakers but rather anything that produces a strong electromagnetic field such as mobile phones, e-cigarettes, appliances like microwaves, electric blankets, etc.

What was that you said about getting “more than one source”?

In the 90s the government incentivised all households to connect to natural gas as it was the clean and efficient energy. So I did and still use it. The capital cost of changing everything over to electric and calculating the payback simply isn’t worth it. Likewise it’s not very sound to only have one source of energy. I know the Greens are pushing it and if you don’t comply you’re the Antichrist but in the end gas is efficient and works well.

So the source of the “maths” was from a solar/electrical installer, surely the “maths” wouldn’t be fudged and totally unbiased

Capital Retro11:26 am 26 May 24

Heat pump HWS are certainly cheaper on electricity than a HWS tank storage running from the grid.

The problem is that unless they have stainless steel containers they need sacrificial anodes which have to be replaced at least every 3 years. This is expensive.

To avoid it you need a stainless steel one which is at least twice the price of a vitreous enamel tank. The capital cost is heavy.

I have used all types of water heater heaters and the best and cheapest to operate by far by far is the instant gas one.

I am happy (not surprised) to advise that designers of heat pump HWS display greater ability than Capital Retro, so the bit about replacing a sacrificial anode every three years is, of course, codswallop.

They are also cheaper, don’t stink, and even supply stored hot water during a blackout, unlike instant gas.

Capital Retro1:31 pm 30 May 24

Unless you have had a heat pump HWS it’s best you just keep quiet because you wouldn’t know if your bum was on fire.

Read some forums on the subject.

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