How upgrading old household appliances could save you money

Photo of appliance in shape of a house

Sue Hewitt

Posted March 24, 2021

That old washing machine, heater and fridge may be adding hundreds of dollars to your yearly power bills.

That old dishwasher may have served you well over the past decade, but it could be costing you up to 25 per cent more to run than a new machine. Still using that trusty old washing machine? It’s likely guzzling a third more power than an energy-efficient new one. As for your ageing air-conditioner, upgrading to an efficient split-system will likely save you one-third of your running costs. 

In many instances, holding on to old appliances to avoid spending money is a false economy. It might be more cost effective to upgrade to a more energy-efficient model that will shave hundreds of dollars off your yearly power bills – especially when you consider that electricity prices will probably keep rising, around three per cent every year, at a conservative estimate.

RACV Solar’s energy expert Tom McKenzie says common household appliances have come a long way in terms of energy efficiency over the past decade or so. And when you consider that whitegoods, heating and cooling, and water heating account for more than 90 per cent of the average household’s power bills, the extra cost of running ageing appliances can quickly mount up.

Factor in government rebates that reward those who upgrade to new energy-efficient models, and it might be time to take a long hard look at those trusty old appliances and consider whether it’s worth upgrading to something new.  

As an added bonus, many new appliances also come equipped with smart technology that can help deliver further savings, especially if you have rooftop solar. For example, Tom explains that you can use your smartphone to turn on the washing machine remotely during the day to run it off solar power, or turn on the air-conditioner to pre-cool the house before you get home.  

When choosing a new appliance, always check the energy rating label and choose the model with the highest number of stars. If you want a more accurate estimate of how much the appliance will cost to run, check out the energy rating calculator offered by the federal government’s Equipment Energy Efficiency program.  

And if you want to avoid wasting money and energy, remember to turn off your appliances when not in use. Some estimates say that in many homes the standby mode for appliances drains three per cent of annual energy usage.

Here are six common household appliances that could be worth upgrading

Heating and cooling

Heating and cooling your home accounts for anywhere between 20 and 50 per cent of Australian household energy bills, according to federal government estimates. RACV’s Tom McKenzie says the most cost-effective way to keep your home at a comfortable temperature is with an energy-efficient split-system heating and cooling air-conditioner. He says upgrading a 15-year-old split system to a new energy-efficient model could shave up to one-third off your running costs. Tom recommends choosing a system with the highest number of energy-rating stars, and says selecting a  model with smart-app zoning will allow you to save money by heating and cooling only those rooms you're using. These smart systems also allow you to turn on and off the heat when you're out, so you arrive home to a comfortable temperature. Tom says this will use less energy than trying to cool a room that is already hot or heat a room that is already freezing cold. 

To maximise your savings, set the thermostat to between 18°C to 20°C; every one degree higher will add 10 to 15 per cent to your heating bill.

Rebate: The Victorian Energy (VEU) program offers rebates of $30 to $1100 for upgrading to an energy-efficient split-system air-conditioner, depending on size and what you’re replacing.

Hot water systems

Tom says the most cost-effective way to heat your water is with a smart heat-pump system. These systems, which transfer heat from the outside air to heat water through a heat-exchange mechanism inside the unit, can save up to 80 per cent on your hot-water power bills. 

Although it will cost a bit more up front, Sustainability Victoria estimates that an efficient hot-water heat pump will save, on average, $405 in annual running costs compared with a conventional electric hot-water system, saving more than $6000 over a system’s 15-year lifespan. Plus, if you have rooftop solar connected to your pump, you can heat your water for next to nothing, says Tom.

To maximise your hot water bill savings, Sustainability Victoria recommends installing low-flow shower heads, washing clothes in cold water, and having your hot water system regularly serviced by a licensed tradesperson.

Rebates: Solar and heat-pump hot-water systems are eligible for rebates under the Victorian VEU and Solar Victoria schemes, as well as the federal government’s Small-scale Technology Certificates (STCs) program. The combined Victorian and federal rebates can add up to anywhere from around $500 up to $3000, depending on whether you’re replacing an inefficient gas or electric system and how big the gain in energy efficiency. 

Fridges are notorious energy guzzlers. Photo: Getty Images
Front loaders use less water than top loaders, and also typically use less power.

Fridges and freezers

Fridges and freezers are notorious energy guzzlers, draining almost 15 per cent of the average household’s overall energy bill, according to But upgrading to a more efficient model can deliver significant savings. Every extra energy-rating star will save you 23 per cent on running costs. 

Sustainability Victoria recommends choosing a model with a freezer on top, as these generally consume less energy than those with a freezer below, or side-by-side models. A model with a built-in door alarm will remind you to close the fridge or freezer door. Don’t buy a bigger fridge than you need and consider carefully whether you really need a built-in cold-water dispenser or ice-maker as these use more energy and cost more to run.

To maximise your savings make sure your thermostat is set correctly – fridges should be set to 3°C while freezers should be set to around -18°C.

Rebate: To be eligible for a government rebate on a new fridge you must buy the new unit from an accredited provider who is part of the VEU program. The rebate amount will vary depending on the provider.


When upgrading to a new dishwasher, check that it has both a cold and hot-water connection. This allows the machine to import hot water from your water heater which is more cost effective than heating water in the dishwater if you have a gas, off-peak electric or solar hot water heater.

Look at the star ratings for both energy and water, and choose the highest you can get – at least 3.5 stars for each – and also check the annual energy consumption. Similar 3.5-star-rated appliances might have different energy consumption levels, say 290kWh per year compared with 265kWh per year. Although this equates to a modest $6.50 per year difference in running costs (based on 25 cents a kWh), when you apply the savings across all your appliances over 10 to 15 years, the potential savings start to add up.

Don’t buy a bigger dishwasher than you need and consider a model with half-wash and economy (eco) options, especially for smaller households. A delay start function will alsow allow you to take advantage of cheaper off-peak or solar power.

Clothes dryers

There are two main types of clothes dryers on the market, heat-pump dryers and conventional clothes dryers. And if you want to save money, Sustainability Victoria, recommends heat-pump models as the most energy efficient option. Choosing an efficient heat-pump model with the highest number of stars can cut your energy bills by hundreds of dollars over the life of a unit. For example, Sustainability Victoria estimates that an efficient 8-star heat-pump dryer, used an average three times a week, will cost about $49 a year to run, compared to $119 a year for a standard electric 1.5 star model. Look for a dryer with auto-sensors that prevent over-drying and wasting power.

To maximise your savings, dry your clothes outside whenever possible and thoroughly spin-dry your clothes in the washing machine first. Spinning water out of your clothes uses a lot less energy than heating it out.

Rebate: The VEU offers a $17 rebate on the purchase of an energy-efficient new dryer.

Washing machines

Upgrading your old washing machine makes sound financial sense, when you consider that a 15-year-old model costs, on average, an extra $57 a year to run compared with an energy-efficient new model – that's an extra $570 over a decade, even before you consider that electricity prices rise around three per cent each year.  

The smartest choice for a new washer will likely be a front loader, as these not only use less water than top-loaders, but will also typically save $360 in power costs over 10 years. Look for a model with a cold-wash cycle option as this can reduce energy use by up to 80 per cent. Smart features such as load sensing technology, which adjusts the water used depending on the load size, and programmable timer or delay start function to take advantage of off-peak tariffs or solar power, will also help keep costs down.

As with dishwashers, Sustainability Victoria also recommends choosing a washing machine with both hot and cold water connections. It is cheaper to import hot water from your water heater than heating it in the washing machine if you have a gas, off-peak electric or solar water system.

Once again, pay careful attention to energy labels on the machine – some display consumption for both hot and cold wash cycles while others display for a warm wash only. For example, a model that uses 750kWh per year on a warm wash and 100kWh on a cold wash, will save you around $162 a year if you wash with cold water (based on an average power cost of 25 cents per kWh). To calculate how much money you could save, check the kWh price you're paying for electricity, and multiply that by the consumption figures on the appliance's energy label. Easier still, consult the Equipment Energy Efficiency Program calculator

Rebate: The VEU does not provide rebates for washing machines.

How to read an appliance’s energy-rating label

  • The label has a curved top with stars for energy efficiency and a box in the middle specifying energy consumption.
  • The stars rate the energy efficiency of one appliance against other models of the same size – the more stars, the more efficient it is.
  • Most products are rated from one to six stars, but super-efficient models have up to 10 stars.
  • The energy-consumption box states how much electricity a model uses in kWh over a year – the lower the number the less you pay in power bills.
  • Divide the energy consumption number by four to estimate the average annual running cost, or for a more accurate figure, multiply the kWh consumption by your area's specific rate.