Using electric heating, water heating, cars and ovens is a smart economic decision, the Electric Homes Report shows. Photo: 123RF
Households using gas appliances could save thousands yearly by switching to electric options new research shows.
The Electric Homes Report by independent energy transition charity Rewiring Aotearoa shows the country is among the pioneers in making electric appliances more cost-effective over their lifetime than fossil fuelled ones, even with upfront costs and finance included.
Rewiring Aotearoa's chief executive Mike Casey said electric appliances and vehicles were now economically favourable compared to fossil fuel ones, due to their efficiency and reduced operational costs.
"The average New Zealand household, even at a 5.5 percent interest rate, is going to save about $1500 a year being fully electric" - Listen to Rewiring Aotearoa chief executive Mike Casey's interview with Nine to Noon
"While our lights, dishwashers and ovens are mostly electric, there are still a lot of households that burn fossil fuels for water heating, space heating, driving and cooking.
"And because our fossil fuel prices are so high, electrification of households and businesses is now a smart, economic decision, not just a smart environmental decision."
The report also showed decisions made by households accounted for a much larger share of the emissions in the domestic economy than conventionally thought.
"While our electricity grid is around 80 percent renewable, only around 30 percent of the country's total energy use is renewable because we are so reliant on fossil fuels for transport, heating and industry.
"Electrifying appliances and vehicles give individuals the power to make a difference on climate and is likely to have a bigger impact on emissions reduction than any other decision you make."
About 14 percent of our gross emissions inventory was a dinner table decision, Casey said.
"When you think about all the decisions made around the dinner table, from the cars we drive, to the solar on our roofs, to how we heat our water, those decisions have a large impact on the environment and in our pockets.
"When your fossil fuel machines need replacing, your next purchasing decision should be electric."
'Win-win opportunity'
Casey said even with taking out a loan to cover upfront costs the potential annual savings could be as much as $4500 annually.
"If you take a loan out at the standard interest rate of around about 5.5 percent and buy all the electric equipment, you're going to be saving about $1500 a year on the average household.
"And if you're able to get access to sustainable finance, which might be at zero to one percent [interest rate], that could be anywhere between $4500 to $5000 a year of savings, including the cost of servicing."
Households would need financial support to transition to electric, he said.
"We need a bunch of mixed policy solutions on how we're going to go about making sure that everyone, from the single parent in South Auckland through to the farmer in Southland, can overcome that upfront capital cost to electrify all the machines within their homes.
"And that's probably going to come down to how can we get everyone in New Zealand access to finance, regardless if they're renting, regardless of what maybe their credit score might be."
He said the transition from fossil fuel appliances to electric ones needed to be fair and equitable.
"What we know for certain is that this transition is going to happen. So, how do we make sure everyone can come along on the journey?
"There are a lot of emissions to be saved. It is a win-win opportunity for New Zealand to not only heavily reduce our emissions, but also help with the cost of living, reducing power bills."