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Appropriate Choice of Energy Source


Electricity is the most common form of energy used by Tasmanian households, and virtually all houses are connected to the main electricity grid. There are some houses in more remote locations that generate their own electricity through a remote area power supply system.

The advantage of electricity is that it can be used to power virtually all household appliances at a reasonable cost. Heating and cooling, water heating, refrigeration, cooking, lighting, washing appliances, water pumping, entertainment and computing appliances, security devices and a range of other appliances can all be powered with electricity. No other energy form can be used for such a broad range of end uses. Indeed it is likely that in coming years our transportation needs will also become increasingly powered by electricity with increasing uptake of electric vehicles as battery technology improves and costs decrease.

For information on how to connect an electricity supply to your house, please contact Aurora Energy. Currently Aurora Energy is the only retailer offering electricity services to households and small businesses, with their prices regulated by the Tasmanian Economic Regulator.

Business customers with annual consumption greater than 50 MWh are known as contestable customers, which means they can choose their retailer and negotiate a supply contract that suits their requirements. Click here for further information.


Natural Gas

The reticulated natural gas network is still developing in Tasmania.  The natural gas distribution network currently provides potential access to approximately 40,000 Tasmanian homes and 4,000 businesses, of which around 10,000 have connected. Natural gas can be a cost effective option for providing space heating, water heating and cooking requirements.

There are currently two retailers offering natural gas supply services to households and businesses. These are Aurora Energy and Tas Gas.

Hobart City Council is offering a rebate to contribute towards costs incurred in connecting the the natural gas network. Click here for further details.


Liquefied Petroleum Gas (LPG)

The use of LPG is relatively high in Tasmania compared to the national average as it is used as a substitute for natural gas by some householders and businesses who are unable to access the natural gas network.

A number of retailers sell bottled LPG for use by households and businesses.  LPG can also be purchased at some service stations for use in LPG vehicles.



Wood is used as the main source of space heating by just under 30 per cent of Tasmanian households, with just under an additional 20 per cent using wood occasionally. In addition to space heating, wood is also used for heating water and for cooking. Many people prefer the heat produced by a wood combustion heater rather than electric or gas heaters. Wood can be a cost effective energy form, depending on where it is sourced from. Many rural households source wood from their own properties, while urban households typically purchase wood by the tonne from small private operators and wood yards.


Grid-connected solar photovoltaics (PV) and solar hot water

The cost of solar PV systems has fallen dramatically in recent years. With the assistance provided by the Small-scale Renewable Energy Scheme (SRES), many households and businesses are investing in grid-connected solar PV systems as a means of generating some of their own energy needs and as a good financial investment.

Similarly solar hot water systems allow households and businesses to meet a significant proportion (typically around 60 per cent) of their hot water requirements and in many instances can represent a good financial investment.

Click here for further information on available assistance to install solar PV and click here for solar hot water systems.


Remote Area Power Supply Systems

Not all houses and businesses (such as farms and mining operations) have access to the electricity grid.  In many such instances it is more cost effective to install a Remote Area Power Supply (RAPS) system than it is to pay the costs of extending the distribution network. RAPS systems are typically powered by either diesel generators; renewable energy generators such as solar PV, wind or hydro; or a hybrid of the two. They often include some form of energy storage such as batteries which allow ongoing supply from intermittent sources such as solar and wind. Renewable energy RAPS systems with energy storage are more expensive to install initially (although solar PV costs have fallen dramatically in recent years) compared to diesel RAPS systems, but have cheaper ongoing costs as diesel fuel costs are eliminated or reduced (in a hybrid system).

The decision on whether to connect to the grid, install a diesel RAPS system, renewable energy RAPS system, or a hybrid RAPS system will vary depending on factors such as distance from the grid, renewable energy resource availability, equipment and installation costs, level of financial support available through schemes such as the Renewable Energy Target scheme, and fuel costs. Some people choose to maximise the contribution from renewable energy, even if this is not the most cost effective option, in order to minimise greenhouse gas emissions associated with their energy supply.


Which energy source is most cost effective?

This depends on a number of factors, such as the cost per unit of the energy source (which may vary at different times of the day and year), the cost of daily connection and supply charges, and appliance efficiency (for example a reverse cycle heat pump can be up to six times more efficient than a wood combustion heater in creating useful heat energy).

To give an example, click here to see how much it costs to have a shower, and to see which energy source is the cheapest.