All-electric new housing – Villawood’s Redstone Estate, Sunbury

If you’re looking to build a new home, going all-electric may not be something that’s at the top of your wish list. However, it’s a smart choice that will save you money in the long run and reduce the environmental impact of your biggest investment.

In the past, using gas was cheaper and considered to be a more efficient, lower emissions fuel source for heating our homes and hot water. Advancements in heat pump technology, the rapid uptake of rooftop solar and the steady transition of the electricity grid to renewables means this is no longer the case. Victorian homes have the highest use of gas for heating and hot water in Australia, leaving their occupants vulnerable to the steadily increasing cost of gas. Mixed fuel homes built today, even if technically net zero for operational emissions due to offsets provided by onsite PV generation, will ultimately become emitters as the grid decarbonises and under a net zero scenario will be required to electrify in the future. If you’re building a new home, choosing to go all-electric in advance of it becoming mandatory is the smart choice. It will allow you to take control of your energy consumption, reducing household costs and protect your family from the negative health impacts of burning gas in the home.

What is an all-electric home?

An all-electric home isn’t much different to a mixed fuel home. The only thing you might notice daily is the speed and convenience of induction cooking and the lack of gas supply charges. An all-electric home is just as comfortable, healthier, and more affordable to live in. A typical new Victorian home built by a volume builder will have gas ducted heating, solar boosted gas hot water, a gas cooktop and either reverse cycle or evaporative cooling. An all-electric home will have reverse cycle heating and cooling, heat pump hot water and induction cooking. Heat Pump technology is key to the efficiency of an all-electric home. They shift heat rather than generate heat making them at least 4 times more efficient than their gas counterparts. Combining efficient electric appliances with on-site generation from Solar PV is the best way to take control of your energy use and ensure ongoing savings. All electric housing isn’t new or special. Several builders and land developers are already embracing electrification at scale. Villawood Properties 2500-lot Redstone community at Sunbury is completely gas-free and is one of many all-electric greenfield subdivisions in the state.

Policy settings to enable all-electric new homes.

Victoria has set ambitious targets to halve emissions by 2030 as we transition to a net zero emissions economy by 2045. To achieve these targets, we must cut emissions across the entire economy, including the gas sector, which contributes around 17 per cent of Victoria’s net greenhouse gas emissions. In the past there have been several regulatory barriers making it difficult for Victorians to build an all-electric new home. These include planning provisions requiring new subdivisions be connected to gas and a Victorian variation to building regulations requiring new homes install either a gas boosted solar hot water system or a 5000L rainwater tank connected to sanitary flushing systems if a gas connection is available. Under NCC2022, the Victorian variation has been removed to avoid conflicts with whole of home energy requirements and support voluntary electrification.

From 1 January 2024, planning permits for new homes and residential subdivisions will only connect to electricity, making all electric development the new normal. During the transition homeowners may still be faced with a choice if building in a subdivision approved prior to January 2024. To ensure homeowners can maximise the benefits of household renewable energy, the Government is investing $10 million in a new Residential Electrification Grants program. Grants will be available to volume home builders, developers and others to provide bulk rebates for solar panels, solar hot water and heat pumps to new home buyers up front.

For more information on the NCC2022 energy efficiency provisions including the new 7 star minimum and whole of home requirements, visit Victorian Government Department of Energy Environment and Climate Action (DEECA).

Case study

This case study looks at the 5 7 Star Homes Program homes located in Villawood Properties’ all-electric Redstone Estate in Sunbury and measures the impact of voluntary electrification over a 15-year period. Energy use for each home has been modelled using Sustainability Victoria’s Whole of Home Pilot Tool using 4 different appliance options as follows:

1. all electric with solar PV
2. all electric without Solar PV
3. mixed fuel with solar PV
4. mixed fuel without solar PV.

Appliances for this analysis have been selected based on 7 Star Homes Program Whole-of-Home data and represent entry level volume builder appliance options for both all-electric and mixed fuel homes. Appliance efficiencies for all 5 case study homes are:

SV's Whole-of-Home pilot tool uses FirstRate5 NatHERS thermal modelling to establish energy load requirements for heating and cooling as well as the efficiency information of the appliances to be installed to provide key information about a home’s operational energy performance. The tool calculates annual home energy use, cost, and greenhouse gas emissions figures.

Projected emissions factors for electricity are based on Victorian baseline scope one and 2 emissions from ‘Australia’s Emissions Projections 2022’ (DCCEEW 2022). Gas emissions factors are from ‘Australian National Greenhouse Account Factors" (DISER 2023) and are assumed to remain constant.
Cost data is based on SV's Whole of Home Pilot Tool with figures last updated in January 2022.

Summary of results

Costs

In all 5 homes, the all-electric options result in significant utility bill savings with an average saving of 56% for homes with solar (options 1 and 3) and 32% for homes without solar (options 2 and 4). The average saving between appliance option one and appliance option 4 is 69%. In the first year, homeowners who build an all-electric home with solar will save an average of $1721 compared to a mixed fuel home with no solar.

Across the 15-year assessment period, utility bill savings assuming 2022 energy prices range between $13,350 and $15,855 for homes with solar (options one and 3) and $10,890 and $13,035 for homes without solar (options 2 and 4). When comparing all-electric with solar (option one) to mixed fuel without solar (option 4), 15-year utility bill savings range between $24,285 and $27,465. Actual savings across the 15-year assessment period are expected to be considerably higher due to gas prices increasing more relative to electricity prices.

New all-electric homes don’t need to cost much more upfront than new homes connected to mains gas and electricity as they will have one heating and cooling system, instead of two separate ones (that is gas heating, electric cooling) and avoid trade and material costs associated with gas plumbing within the home. Research conducted as part of the Zero Net Carbon Homes Pilot determined that net savings for upgrades comparable to going from option 4 to option one begin at occupancy when the uplift costs are included on the mortgage. This means homeowners choosing to build all electric with solar PV will save money from day one due to the significantly lower energy bills making up for a slight increase in mortgage repayments due to any uplift costs. The payback in this scenario is zero years.

All electric precincts such as the Redstone Estate are also able to avoid the cost of building new gas mains and reticulating gas infrastructure, making new subdivisions cheaper to deliver. These savings can offset costs associated with upgrading electrical infrastructure and can also be passed on to consumers in lower land costs.

Emissions

In all 5 case study homes, opting to build all electric with solar PV (option one) was by far the lowest emissions option across the study period, with 15-year emissions ranging between -12.91 and -21.61 tonnes CO2-e. Mixed fuel with solar (option 3) was the next best case with 15 year emissions ranging between -6.75 and 9.88 tonnes CO2-e.

While option 1 emissions are trending down beyond the modelling period, option 3 emissions continue to climb with only two study homes still net zero over the 15-year period. Although initially building mixed fuel with solar PV appears to be the lower emissions option, over time this is not the case. The ability for the PV system to offset emissions associated with gas use reduces as the emissions intensity of the electrical grid declines over time. Although all 5 case study homes assessed as mixed fuel with solar PV were net zero for operational emissions at the time of construction, each home loses its annual net zero status between 2028 and 2030.

For the 5 case study homes, building all-electric without solar PV (option 2) will become a lower emissions option than building a mixed fuel home with PV (option 3) between 2030 and 2034. Under a zero emissions scenario, all new construction from 2030 will need to be electric.

Conclusions

As our electricity supply is decarbonised, the importance of all-electric new homes increases. By 2030 all new homes will need to be all-electric if they are to be net zero for operational emissions, with electric homes without solar becoming lower emissions than mixed fuel homes with solar that would be technically net zero emissions today.

For NCC2022 most new homes will require solar to achieve Whole of Home compliance. For the 5 case study homes across the 15-year assessment period, utility bill savings for the all-electric home with solar range between $13,350 and $15,855 compared to the mixed fuel with solar option.

The case to build all electric homes is clear, although emissions may initially be higher, over the life of the appliances, and home, the all-electric options are lower emissions and cheaper to run than the mixed fuel options.