The certificate schemes pay for energy and emissions saved, and under their rules a heat pump replacing gas saves less than one replacing an electric tank. So the discount is smaller: an indicative $560 in Victoria against $630 for electric, and up to $330 in NSW against up to $640.
Plenty of households replacing gas aren't doing it because the tank died. They're getting off gas altogether, or the supply charge on a bill that covers one appliance has stopped making sense. In Victoria there's another reason coming: from 1 March 2027, a gas hot water system in an existing home that breaks and cannot be repaired has to be replaced with an efficient electric one.
Victorian figures are the program's indicative VEU discounts and move with certificate prices. NSW figures are official Energy Savings Scheme maximums, which NSW calls indicative. The Solar Victoria rebate is separate and doesn't depend on the fuel you're replacing.
Show these figures as a table
| Item | Figure |
|---|---|
| VIC, replacing electric | $630 |
| VIC, replacing gas | $560 |
| NSW, replacing electric | up to $640 |
| NSW, replacing gas | up to $330 |
Victoria still has the second rebate
The Victorian Energy Upgrades discount shrinks when you replace gas, but the Solar Victoria rebate of up to $1,000 doesn't depend on what you're replacing. If you pass its income, property and owner-occupier tests, most of the Victorian reduction is still there. Victoria's rebates in full.
The work is bigger than a like-for-like swap
A continuous-flow gas unit hangs on a wall with a gas line and a flue. A heat pump is heavier, needs air around it, and needs its own electrical circuit. A straightforward like-for-like swap takes 2–4 hours; this isn't that job. Budget for an electrician, and ask whether the switchboard has room for a new circuit, because a board upgrade is the expensive surprise here.
You also need somewhere to put it. Heat pumps sit outside, hum like a small air conditioner and need clearance around the fan. If the old gas unit was tucked into a narrow side passage against a neighbour's bedroom wall, that spot may not suit.
What you are comparing against
Installers report gas storage costing $1,200–$3,000 installed and continuous flow $1,500–$3,000, against $3,000–$5,200 for a heat pump before any rebate. Outside Victoria, on upfront cost alone, like-for-like gas often comes out cheaper. The case for switching rests on running costs: Solar Victoria puts the saving from moving gas hot water to efficient electric at around $400 a year. In Victoria, like-for-like gas stops being an option once your system reaches end of life on or after 1 March 2027, so the real question there is when to switch, not whether.
Questions worth asking before you commit
- Is gas the only thing left on this connection? If the cooktop stays, the supply charge stays.
- Where will the unit physically sit, and how far is that from the switchboard?
- Which discount is in the quote, and is it the gas figure or the electric one?
- Who caps the gas line, and is that price in the quote?
Certificate-based discounts move with the market, so confirm today's amount with an accredited installer. Run your own numbers in the calculator, or read Victoria's 2027 gas hot water rule.