Australian households with electric vehicles (EVs) are set to benefit from significantly lower energy costs compared to those with internal combustion engine (ICE) vehicles, according to a major new report by one of Australia's leading energy regulatory bodies.

The Australian Energy Market Commission (AEMC), which oversees the rules of the main electricity grid and focuses on distributed energy resources, has published a report demonstrating how the shift to renewable energy, alongside the adoption of rooftop solar, battery storage, and electric vehicles, will reduce household energy bills.

The report examines energy bills, which encompass household electricity and gas costs as well as vehicle fuel expenses, and concludes that households with EVs stand to save considerably.

The AEMC explains, "We analysed the energy costs for a household that drives the average amount each year, depending on whether they drive an EV or an ICE vehicle." The report clarifies that these cost savings do not require consumers to optimise EV charging during low-price periods.

"The electricity costs of running an EV have been calculated based on the assumption that the household charges their vehicle at their convenience, rather than exclusively during periods of low electricity costs," the report further adds.

The calculations focus solely on energy costs, excluding differences in vehicle purchase prices, maintenance, and insurance.

However, with the ongoing decline in battery costs and the increasing competitiveness of some mid-range EVs, the report suggests that parity in total cost of ownership may soon be achievable.

The AEMC also notes that while the cost gap between petrol and electric vehicles - particularly in the used car market - is expected to narrow, households must have access to sufficient EV charging infrastructure in order to realise these savings fully.

Additionally, a separate analysis reveals that households with a 7kW solar system can achieve even greater savings if they charge their EVs at home, particularly during daylight hours when solar output is at its peak. These savings are in addition to the fuel cost reductions associated with driving an EV.

However, the analysis does not factor in the upfront capital and installation costs of a 7kW solar system, which typically range from AUD 6,000 to AUD 10,000 (US$ 3,900 to US$ 6,500).