The federal government has stepped up its promotion of residential electrification, in what could provide a boost to home solar and battery deployment. Federal Energy Minister Chris Bowen has instructed the Australian Renewable Energy Agency (ARENA) to look at funding more community electrification programs.

Getting households to kick gas can be an effective way to reduce emissions and household energy costs. It can also provide a boost to rooftop solar and battery installations, leading to larger systems sizes and potentially the integration of battery systems. The expansion of ARENA support of community electrification programs represents another step towards accelerating household electrification.

On the back of the success of a pilot home suburb-based program, the Electrify 2515 pilot in Wollongong, Climate Change and Energy Minister Chris Bowen has instructed ARENA to “consider funding for more community electrification demonstration projects across the country.”

Electrify 2515 was spearheaded by Australian energy entrepreneur and futurist Saul Griffith, who is the co-founder of Electrify Australia. The program takes a community approach to facilitating the electrification of Aussie homes – promoting the benefits of rooftop PV and batteries, along with switching to heat pumps and induction cooktops. EVs form the final piece in the puzzle for household electrification – with the combined impact delivering significant energy savings, however requiring a substantial upfront investment.

Source: Electrify Australia

Helping households overcome the upfront expense is where government support can make a major difference. The community aspect should also not be overlooked. Solar installers know the power of neighborhood referrals when it comes to convincing homeowners to go solar. And community events, education, and simply the power of “keeping up with the Joneses” could help a household to make the decision to go all electric.

Electrify 2515 was supported by ARENA through a $5.4 million grant and is available to homes in the suburbs of Austinmer, Clifton, Coledale, Scarborough, Thirroul and Wombarra. The agency is supporting similar initiatives in South Australia and the Northern Territory, Bowen’s office reports. 400 homes were supported under the initiative.

The direction to ARENA this week by the federal government is for ARENA to expand its support for residential electrification programs right around the country: to the ACT, Western Australia, Queensland, Victoria and Tasmania.

“ARENA pilot projects supporting home electrification will help create valuable insights into how households can transition to renewables and smart energy systems to cut energy costs and reduce emissions,” said Bowen in a statement.

The move is a part of a deal struck with cross bench Senators, to lock in their support for the Future Made in Australia legislation – which looks to support clean technology manufacturing. Bowen thanked independent senators David Pocock, David Van, Jacqui Lambie and Lidia Thorpe in his statement today. Former Wallaby Pocock, now the independent senator of the ACT, has been particularly outspoken in his support for residential electrification. It is the first time that Bowen has provided such an instruction to ARENA.

Impact of Electrification

There is a sizable potential upside for households and solar and battery installers and retailers from increased home electrification. Back in 2021, Electrify Australia calculated that in 2025 the energy savings to households would come in close to $5,500 a year. The analysis included the energy and cost savings from switching from a petrol car to an EV, along with switching from gas to heat pumps for space and water heating, and the use of induction cooktops.

Source: Electrify Australia

The CSIRO produced a similar analysis, in 2023, finding that annual savings would come in at $2250.

For the solar industry, community electrification initiatives could provide encouragement to homeowners that were looking to install rooftop PV and make the electric switch. And the additional household electric demand would require larger rooftop PV systems – a trend that is already in Australia.

Drawing on STC data, Green Energy Markets has found that rooftop systems larger than 15 kW, but smaller than 100 kW, accounted for 7% of registered installations in 2024, a record high and up from 5.6% the previous year. In terms of megawatts, the trend is more apparent with commercial rooftop capacity (again, larger than 15 kW) were responsible for 682 MW of capacity installed during the year, or 21.% of the 3.17 GW installed in 2024.

Source: Green Energy Markets

ARENA feedback

In announcing his direction to ARENA to support community electrification, Bowen’s office noted that an expansion of programs would provide valuable feedback to the agency, informing an increased rollout of such programs. The government has also updated legislation to make electrification “a statutory function for ARENA”, providing legal support for programs.

Responding to the move, the Smart Energy Council has praised both Bowen and the crossbench Senators for supporting the move, but noted that specific funding for the program has not been provided.

“Solar saves money and more investment in household energy efficiency through electrification is a win for hip pockets at a time when people need it the most,” said John Grimes, the CEO of the Council. “We can slash energy bills for millions of Australian homes through electrification with solutions available right now or we can follow the Federal Opposition’s energy route that continues down the path of higher electricity prices, on a vague promise that in 20 years our destination will be even more expensive nuclear power.”

Grimes called on the government to introduce a National Battery Booster Program to incentivise the uptake of residential batteries. He said that with such an initiative, a target of 1 million residential batteries by 2030, up from approximately 250,000 today, could be achieved.

In 2024, the Clean Energy Council advocated for a subsidy of $6500 for residential battery systems.