Electrification is a latest trend of making our houses all-electric by not installing gas appliances in new homes or converting old gas appliances to electric in existing homes. Our government supports electrification by introducing rebates on gas-to-electric conversions (see our rebate page at https://www.homelab.com.au/electrification). But is it really worth it? To convert everything to electric seems like a big expense and the result is not very clearly defined. People "in the know" say it is worth it, but internet also has stories of those who went all electric and their energy bill went up not down. Those who have solar power, sure, it's possible they are saving but if I don't have solar, isn't gas still cheaper to use?
Gas and electricity use different tariffs, units and different usage. The bills are issued for different number of days and different periods. The usage changes with season. Electricity is used by different appliances at different rates than gas. So how can we tell which is cheaper? There are many answers and opinions and most seem to have some merit. But to get a specific answer we must ask more specific question.
This article will show you how to work out the answer to a question: How much would I pay if I used electricity instead of gas? Converting gas units to electricity is simple enough. Gas energy is measured in MegaJoules (MJ) and electricity in kiloWatthours (kWh).
The conversion formula is simple, 1 kWh = 3.6 MJ
But we cannot just convert gas usage from our gas bill to kWh and multiply by electricity tariff to get an answer. Gas appliances use gas at different rates than electrical appliances. All appliances take input energy (gas or electricity) and convert it to some other energy (heating, cooling, mechanical, etc). The input energy is what we use and pay for, and it's the information we get on our utility bill. The output energy is what we get for our money. The ratio of output to input energy is a measure of each appliance's efficiency. And it is the output energy that is the base of comparison, what we want to know is how much would it cost to heat our house to the same comfort if we used electricity instead of gas.
We will refer to the energy we pay for as input and energy we produce with it as output. The steps to "convert" the gas bill to electricity are:
1.Calculate gas output energy from the gas bill (input) in MJ
2.Convert to MJ to kWh to get output energy for electricity
3.Calculate how much electricity is required (input) to produce the same output
To calculate gas output we have to multiply the usage in MJ by the efficiency factor of gas appliances. The efficiency can be calculated from the specs, manuals of manufacturer stickers on the unit. If this information is not available we will have to estimate the efficiency factor. Gas appliances are not very efficient. Most recent units are around 1:1 which means for every 1 MJ used, they produce 1MJ of heating. There is no information available, but older appliances can be assumed 0.75:1 and very old even 0.5:1. If there is a mix of old and new gas appliances, their contribution to total gas usage has to be assessed first before applying different efficiency factor to each appliance.
Converting to kWh is easy by dividing gas output energy by 3.6. At this stage it is also good to annualize - divide the by total billing days and multiply by 365. As the gas usage is seasonal, using gas bill for the past 12 months will provide best result because for shorter periods of time the results will also be seasonal. Behavioural adjustment can also be estimated at this stage - knowing that the energy is cheaper may lead to an increase in usage, like running the appliances more often or for longer time.
Once we have the gas output energy converted to kWh and adjusted we can calculate the amount of electricity required to produce the same amount of heating by dividing the output energy by the efficiency of electrical appliances. Electrical appliances are much more efficient. Their efficiency can be found on the compliance/info sticker, in the manual or using online search for specific model. If for some reason this is not available or cannot be used, a general assumption can be made. Most electrical air conditioners have efficiency factor of 4:1 which means for every kWh of energy they use, they produce 4 kWh of heating or cooling. There are better and worse, older models may still be available with 3:1 or 3.5:1. And the best air conditioners are 5:1 and higher.
The result of these 3 steps is the amount of electricity equivalent to gas usage from the bills. When multiplied by current electricity tariff it will give the answer to the original question, if the gas is cheaper than electricity. But it is only a starting point, much more can be done with it, like
- Calculating yearly savings or energy bill reduction
- Calculating savings budget towards electrification
- Estimating the effect or energy price increases
And this in turn should provide the answer to other questions like
Is it worth turning off gas?
How soon will the changes pay for themselves?
You can work this out yourself using the above and the sample case below, or you can order our Electrification Report which will give you all these answers and more. But regardless of the way, we can already tell two things
1."Gas is cheaper than electricity" - is a thing of the past, and
2.By turning off gas, the saving from supply charge alone will be around $250-$300 per year. So not a bad start.
The examples below are based on gas bills for gas hot water tank and ducted heating for little over than 12 months, annualized. The usage saving is the difference between the cost of gas and the cost of electricity. The total saving also includes gas supply charges (budget towards electrification). Gas cost is reduced by "pay on time" 20% discount.