Aussie Homes Could Slash Energy Bills Up to 90%

Experts urge focus on efficiency, not just generation, to cut costs.

Amidst debates over coal versus renewables, experts say energy efficiency improvements in Australian homes are a largely untapped opportunity. A new report indicates households could slash power bills by over 90%.

Dramatic Savings Potential

The Institute for Energy Economics and Financial Analysis (IEEFA) report, released Wednesday, found savings of 82% to 94% are possible with solar, home batteries, and efficient appliances. These include heat pumps, air conditioners, and electric induction cooktops.

Savings could be even greater with government incentives, according to the report. Federal and state policies could help halve household energy bills within a decade.

Jay Gordon, an energy finance analyst at IEEFA, noted that the energy price debate has largely focused on rebates and power generation, missing the potential of energy efficiency.

Government Initiatives and Expert Opinions

The Albanese government launched a $2.3 billion home battery program last week, offering discounts around 30%.

Last month, experts commended the Victorian government for banning gas heating and hot water systems in new homes starting in 2027.

Simple Steps, Big Impact

According to the IEEFA report, households can achieve major savings by:

• Installing an 8kW rooftop solar system and a 10kWh battery.
• Using reverse-cycle air conditioning instead of gas or electric heaters.
• Switching to heat pumps for water heating.
• Replacing gas cooktops with electric induction.

The modelling didn’t consider further gains from improving homes’ thermal efficiency, which can enable more effective use of daytime solar energy. Thermally efficient homes allow residents to pre-heat or pre-cool homes ahead of peak evening hours.

Efficiency vs. Generation Debate

Luke Menzel, CEO of the Energy Efficiency Council, said energy source discussions have overshadowed the role of energy efficiency. He described the debate as “comic-book death battle between coal and renewables.” He added that “there’s a whole other conversation we need to be having. And that’s about how we are using energy.”

While technologies such as heat pumps and solar are well established, Menzel acknowledged that encouraging their adoption remains a challenge. He believes “it’s a heavier lift, but it’s where we need to go.”

Wider Benefits of Energy Efficiency

Australian homes consume about a quarter of the country’s electricity and account for over 10% of greenhouse gas emissions. Reducing gas use in homes could also alleviate supply pressures on the east coast, said Menzel.

Reports from the Climateworks Centre at Monash University advocate for a “renovation wave” for Australian homes, particularly those built before 2003. Upgrading windows, insulation, and appliances could save households up to $2,200 annually.

Dr. Gill Armstrong, the centre’s buildings program manager, stated: “There’s a growing awareness that homes can be improved quite quickly. It’s a no-brainer for the federal government.”

Notably, upgrading to energy-efficient appliances can also reduce strain on the power grid during peak demand, potentially preventing brownouts or blackouts during heatwaves, according to a report by the U.S. Department of Energy (Energy.gov).