Electrification vs gas: Senate Inquiry examines long-term savings for households
The Senate Economics References Committee’s report on residential electrification highlights the need for better coordination, support for low-income households, and workforce development while acknowledging challenges such as grid integration and upfront costs.
A coalition led Senate Economics References Committee has released its final report on residential electrification, examining the economic opportunities, challenges, and policy options for increasing household use of electric appliances and renewable energy. The inquiry considered factors such as cost, energy security, employment opportunities, and the role of government incentives in facilitating electrification.
The report acknowledges that while many Australian households have already benefited from switching to electric appliances and rooftop solar, structural barriers remain for low-income earners, renters, and apartment dwellers. The committee recommends that federal and state governments provide targeted support to overcome these challenges, including investment in consumer energy resources such as rooftop solar, home batteries, and bi-directional electric vehicle chargers.
Managing Solar Uptake and Grid Stability
One of the report’s key concerns is the increasing strain on Australia’s electricity grid due to the rapid adoption of rooftop solar. More than four million solar systems have been installed on Australian homes, with their combined capacity exceeding that of coal-fired power stations. While this has lowered household energy costs and contributed to emissions reductions, it has also led to grid stability issues. Some network operators are now curtailing solar exports due to capacity limitations.
The committee found that better coordination is needed to manage the integration of rooftop solar and recommends prioritising investment in technologies that improve the grid’s ability to handle distributed energy generation. This includes increased support for home batteries and community battery projects to store excess solar power and make it available during peak demand periods.
Affordability and Consumer Choice
While electrification offers long-term cost savings, the report acknowledges that the upfront costs of switching remain a barrier for many households. It also warns against policies that restrict consumer choice, particularly for households that may find it more affordable to continue using gas in the short term.
“The committee notes that for many households the most affordable option in the short term will be to maintain their gas appliances,” the report states. It also raises concerns that some state and territory policies banning new residential gas connections could be based on ideology rather than a solid evidence base.
Workforce Shortages in the Electrification Transition
The success of residential electrification will depend on having a skilled workforce to install and maintain energy-efficient appliances and infrastructure. The committee heard evidence that Australia faces a shortage of electricians and other skilled workers needed to support the transition.
To address this, the committee recommends that governments work together to expand cost-effective local training options, particularly for electrical apprentices. “Australia will need, in particular, more qualified electricians, along with other skilled workers in the renewable and related manufacturing sectors,” the report states.
Rewiring Australia Welcomes Report’s Findings
Electrification advocacy group Rewiring Australia welcomed the report’s recommendations, particularly those supporting workforce development, community battery projects, and policies to assist with the upfront costs of switching to electric systems.
“We are pleased to see our research and policy asks for flexible loans to help people with upfront costs mentioned in this report,” Rewiring Australia CEO Francis Vierboom said. “We know what needs to be done, and we know many will need help with making the switch. But the long-term savings are hard to dispute.”
The report provides a roadmap for how electrification can be expanded while addressing affordability and grid integration challenges. However, the committee stresses that electrification policies must be implemented in a way that maintains consumer choice and ensures social equity in the transition to clean energy.
