Overcoming the Challenges of Electrifying Homes in Australia

Discover the hurdles faced by Australian homeowners when transitioning off natural gas to electrifying their homes, and learn from my experience to overcome this.

Image Credit: Rewiring Australia

How it could be

Imagine a world where every home is powered by clean and sustainable electricity. No more dependence on fossil fuels or harmful emissions. The air is fresher, and our planet is healthier. 

By transitioning from natural gas to electricity, we can significantly reduce the carbon footprint of our homes - one of the few levers we have in our control! - and contribute to a more sustainable future.

This is how it could be if we overcome the challenges of electrifying homes.

Let's explore the challenges based on my experience in Western Australia.

A summary of the challenges

Having recently been through the home electrification retrofit experience myself, I was bitterly aware of the difficulties that homeowners face to pull this off.

1️⃣ It’s confusing:

Homeowners need to figure out for themselves and take a leap of faith to request & understand a quote, obtain financing and get their home electrified.

Why? Quotes and language are riddled with kWh and technical sparky jargon.

2️⃣ No one takes ownership:

Quote and installation are delivered by a collection of fragmented tradespeople who are not interested/capable of solving the entire problem for the homeowner.

Why? Solar panels are done by specialist installers, heat pumps by plumbers and cooktops by regular sparkies. Few are skilled or offer the whole breadth.

3️⃣ Good financing is hard to get:

Loans are often treated as unsecured resulting in unfavourable terms (higher interest, additional application process). It is difficult to draw down from an existing mortgage. High-income households are often ineligible for government support.

Why? Banks make more money off regular loans (not green ones) and can’t recoup their losses unless they charge a high-interest rate for unsecured collateral. In addition, bank exec KPIs are not linked to climate. Given the current economic situation, banks are more conservative and borrowers prefer to use the money elsewhere.

4️⃣ Requires a leap of faith:

The ROI estimates of what the home will look like after electrification can be wildly off. They often do not consider the impact of financing on the payback period. The ROI only becomes clear a few months after electrification has been completed.

Why? Estimates can be based on only one prior period of current electricity bills. Tariffs change by retailer. Solar generation depends on the weather. Energy consumption depends on the choice of appliance, home energy efficiency and behaviour of occupiers.

5️⃣ Misinformation, negative perceptions and other priorities:

Homeowners can be held back by misinformation and negative perceptions around electrification; including: “solar installers/equipment are dodgy”, “gas cooktops are better”, “heat pumps won’t work in the winter”, “solar panels won’t work when it rains”, “hail storms will damage the solar panels”, etc., etc.

Why? Homeowners have lacked the incentive to look into this in detail. Climate denialists spread misinformation. Other home features (like marble kitchen benchtops) have taken priority.

The process I went through

As a homeowner who recently transitioned from natural gas to electricity, here is the step-by-step process I went through to overcome the challenges and electrify my home.

1. Request three quotes
   I got three quotes for the installation of rooftop solar and a battery from solarquotes.com.au
   
   
2. Wait for the callbacks and visits
   Some tradespeople came over and had a look at my roof and switchboard. Others just rang me. Some had a "finance partner" to get a loan. The variety of approaches and professionalism was staggering.
   
   
3. Receive quotes and try to compare them yourself.
   I created a spreadsheet to calculate the upfront/ongoing/total cost of "do nothing" versus each of the alternatives (buy outright, get a loan, lease equipment). In descending order based on best NPV: buy outright, get a loan, lease equipment. Interest rates were low at the time. This may have changed. If you are curious about the spreasheet - access it here. Full disclaimer: I'm not a perfectionist, so it likely has some ignorant calculation errors.
   
   
4. Choose a provider.
   I ended up going with plicoenergy.com.au as I was in WA, they had a $0 upfront option and offered a VPP for the community (their model involves joining a community whereby each installation joins a VPP). You don't get this if you just finance the equipment with a loan or buy it outright. Plico looks after EVERYTHING and are still a breeze to deal with. I'm a huge fan.
   
   
5. Wait for your grid provider and electricity retailer to do their bit.
   I had to get my meter upgraded to one that could allow my solar power to be fed into the grid. Plico managed this process.
   
   
6. Get solar panels and battery installed
   Plico works mainly with Redback Technologies equipment. This an Aussie company that created a modular "bundle" of panels + inverter + battery. It is called the "Smart Hybrid System" (details here). This QLD-based company is backed by the Government's Clean Energy Finance Corporation (CEFC). I have a 5kW inverter, 7.8 kW of solar panels and a Lithium battery with 7.1 kWh of capacity.
   
   
7. Replace the gas hot water heater with a heat pump.
   I had to get quotes from plumbers to do this. I had no idea how to compare heat pumps, so I just went with the plumber I already knew. However, my plumber didn't look after getting the government rebate for the STC generated by the installation of the heat pump.
   
   
8. Replace gas cooktop with electric.
   I was on a budget so just bought a second-hand induction cooktop on Facebook marketplace. Tip: just search in rich suburbs and you will find someone who is replacing a perfectly good one. I had an electrician install this. There was some new wiring to do given there were no "heavy load" wires near the cooktop before.
   
   
9. Find someone to take my two huge gas bottles.
   The Gas company did not want to pick them up unless I was buying new ones. Luckily we have a friend with a farm who could use them.
   
   
10. Get the rebate from the government for the heat pump.
    This was by far the most painful part of the entire process. You won't need to do this if your plumber/installer manages the rebate for you (this wasn't the case for me).
    
    The govt has set this up for companies, not individuals. You need to fill out a form to get access to the STC Registry. Once you have access, you need to request an upgraded access so that you can register your project and provide the evidence that the heat pump was installed. Once you've done that, you join a queue of every other project trying to sell small-scale technology certificates (STC). One day, magically, your project reaches the top of the queue (6-9months for me) and your STCs get bought by someone who wants to offset their emissions.
    
    
11. Optimise the system
    Another painful part.
    What I wanted to do was simple (or at least I thought): make sure that big appliances (like the heat pump) are only running when the sun is out.
    
    Some heat pumps have this feature built-in (mine didn't). I emailed and spoke to a few "connected home" and IoT-type providers that would allow me to set criteria to run the heat pump (for example, don't start heat pump until solar panels are producing X kW). This was a dead end.
    
    I went for the far less sophisticated option of adding a timer to my circuit board so that the heat pump only switches on between 10am and 4pm. This has caused all sorts of grief to my tenants who want to shower non-stop, all night long.
    
    
12. Adjust my behaviours to consume as little as possible from the grid
    My wife would probably say that I became obsessed with checking the status of our system on the Redback portal and app. At any given time, you can find out how much you are generating, selling to the grid, consuming at home or sending to charge your battery.
    
    Being a climate tech dork, I was keen to see how far we could minimise our use of the grid. We would do our washing during the day. I also installed smart bulbs and plugs to make sure things would switch off at night. You might have to go with the old-school plugs if you want your modem to switch off at night.
    
    
13. Sit back and watch the cash roll in (not really)
    After all was said and told, our solar generation was paying for the cost of being connected to the grid ($1/day) and providing a little extra cash every month. During the summer, we went into huge credit with the utility company and drew nothing from the grid. In the winter, we used a little bit of the grid, but this was still free given the credit we had built up from the summer. Our feed-in tariff: 9 cents during peak, 2 cents off-peak.
    
    
14. Help avoid blackouts during peak load periods:
    Since I'm a customer of Plico, I joined WA's first Virtual Power Plant scheme. Working together with the electricity retailer for WA (Synergy) and leveraging the internet-connected inverter on my system, Plico can remotely discharge my battery to help stabilise the grid in WA during periods of peak demand (hot summer days when everyone turns on their Air Conditioning).
    
    I received a bonus payment just for being involved and having the inverter online. In addition, I am credited for the energy I might purchase from the grid during the use of the VPP.  

Who is doing something about this?

Fortunately, there are Climate Startups and initiatives that are actively working to address these challenges and support homeowners in electrifying their homes.

Solar Quotes

Pioneers in this space. Driven by a retired electrical engineer, their service helps you get three quotes for you to compare. They have written A LOT of content and shared knowledge to help homeowners on this journey. "Since 2009, SolarQuotes has helped 730,528 people get high-quality solar quotes across Australia."

https://www.solarquotes.com.au/

Plico Energy

Plico offers a complete system of solar panels, inverters, and batteries for homes and businesses in Perth and South West WA. The company's goal is to help people power their homes and businesses with clean energy from solar batteries, save money, avoid blackouts, and contribute to the wider community. Plico Energy's solar battery inverter technology allows homeowners to power their homes day and night from stored energy. The company aims to disrupt the WA energy market and help move the grid away from coal.

https://www.plicoenergy.com.au/ 

Boom Power

The BOOM platform provides users with the tools needed to evaluate options, engage suppliers, track, and report on building electrification. Bank Australia recently partnered with BOOM to launch an "Electrify Your Home" pilot program in Victoria for 50 customers.

https://boompower.com.au/

Goodbye Gas

The company helps homeowners transition to a 100% electric home by replacing gas appliances with electric ones. Goodbye Gas handles all rebates and serves as a single point of contact, ensuring clear communication. The company is currently operating in Melbourne and plans to expand its services to other states in 2023. Goodbye Gas also offers free electric ovens with induction hobs, free induction pots and pans, and free gas meter removal.

https://www.goodbyegas.com.au/ 

Brighte

One of the few tackling the financing problem. Brighte provides finance for solar systems and energy-efficient home products. The company offers flexible payment solutions and government partnerships to make sustainability affordable and accessible for everyone. Brighte has a network of over 2,200+ tradies and has helped finance 100,000 solar installations

https://brighte.com.au/ 

WattBlock

Provides independent advice to residential apartment buildings on solar and battery feasibility studies, electric vehicle charging, and energy efficiency. Wattblock's Strata Energy Reports provide recommendations to drive change in buildings, which can help kickstart the electrification journey. The company has provided independent advice to residential apartment buildings housing over 85,000 residents.

https://www.wattblock.com/

Val AI

Val AI provides tools for integrating climate action into any customer experience through automated emissions calculations, dynamic whole-of-home sustainability rating, household energy efficiency scores, a vetted marketplace of suppliers, carbon offsets, and financed emissions reporting. Their technology lets homeowners model their current home energy efficiency, then identify the top upgrades that will reduce energy costs, increase their property value, and improve the comfort of their home - all while reducing carbon emissions

https://www.valai.com.au/

Rewiring Australia

A non-profit, independent, non-partisan organization dedicated to representing the people, households, and communities in the energy system. They aim to demonstrate and communicate the cost savings, emissions reductions, and energy system benefits of electrification. They work with government, industry, and communities to electrify everything and deliver practical climate progress.

https://www.rewiringaustralia.org/ 

Who wants to help?

If you are considering electrifying your home, you are not alone. There is a growing community of homeowners, experts, and organisations who want to help you overcome the challenges and make the transition to an electric home.

Reach out to me if you want to work on solving these issues - leo [at] moretraction.io