Gas connections will be banned in Victorian homes built from next year in a move that's divided providers, environment groups and other stakeholders.
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All new residential properties and subdivisions that require a planning permit will only be powered by electricity from January 1.
The changes will help the state reach its goal of net-zero emissions by 2045, Energy Minister Lily D'Ambrosio said on Friday.
Residents of the all-electric homes will also save $1000 per year on their energy bills.
"We know the cost of living for Victorians is getting bigger and bigger," Ms D'Ambrosio said.
"Doing something about it is exactly what today is about."
Changes to Victorian planning provisions and schemes will enable the new measures.
About 80 per cent of Victorian homes are connected to gas, with the sector contributing about 17 per cent of the state's emissions.
A new $10 million residential electrification grants program will be established, allowing volume home builders and developers to provide bulk rebates for solar products to new home buyers.
The government is also updating its gas substitution roadmap, which will be released later this year.
The Australian Pipelines and Gas Association criticised the ban, saying the government should instead introduce renewable gas like hydrogen into the system.
"Preventing new homes from connecting to gas now will not lower emissions, will not lower costs and will cut people off from the opportunities of the future," chief executive Steve Davies said.
But other groups are backing the changes, with Environment Victoria describing it as a vital step towards ending the state's addiction to gas.
The Clean Energy Council said electric homes were more efficient, better for the environment and cheaper to run but Victoria's push shouldn't stop at new builds.
"All Victorian households and businesses will ultimately need to switch from gas to renewable electricity," director Anna Freeman said.
"The updated gas substitution roadmap must set out a clear strategy for managing this transition in an orderly but accelerated manner."
Master Builders Victoria also welcomed the shift away from gas but said it was important consumers had the freedom to make informed choices.
"State and federal governments must continue to engage with industry stakeholders to develop comprehensive policies that consider the varied energy requirements of different consumers and building types," chief executive Michaela Lihou said.
All-electric homes also improve residents' health outcomes because gas stoves expose people to respiratory irritants, the Royal Australian College of GPs said.
Victoria is not the first jurisdiction to take action on gas, with the ACT to prohibit connections in new suburbs or infill developments by the end of the year.
Building sector groups including Frasers Property Australia and Cbus Property have also pledged to phase out gas cooktops.
The Victorian Greens welcomed the government's changes but said the state was falling short by approving new gas drilling projects.
Shadow Treasurer Brad Rowswell said gas was an important part of Victoria's energy mix and the government was rushing through the ban.
Australian Associated Press
