Free tool for Victorian homes
Is Gas or Electric Heating Cheaper?
A straight head to head on running cost. Compare gas ducted heating, reverse cycle and plain electric heaters on what it actually costs to put the same warmth in your rooms.
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Why electricity beats gas for heating
It comes down to one idea. A gas heater burns fuel to make heat, and a good one turns about 68 percent of that gas into warmth in your room. A reverse cycle system moves heat from the outside air into your home, and delivers about 4 units of heat for every 1 unit of electricity it uses.
So even though a kilowatt hour of electricity costs more than the gas equivalent, you need far less of it. At current Melbourne rates, a kilowatt hour of delivered warmth costs about 7.5 cents from a heat pump and about 18.5 cents from gas ducted heating.
Plain electric heaters are the worst of both worlds: they pay the electricity price and get no efficiency multiplier, landing at about 30 cents per kilowatt hour of heat, four times the cost of a heat pump.
Cost per kilowatt hour of heat
The only fair way to compare fuels is by what it costs to put the same warmth in the room:
| Heating type | Efficiency | Cost per kWh of heat | Whole home, per winter |
|---|---|---|---|
| Reverse cycle (heat pump) | 400% (COP 4) | about 7.5c | about $650 |
| Gas ducted heating | 68% | about 18.5c | about $1,600 |
| Electric panel or fan heater | 100% | about 30c | about $2,600 |
At 30c per kWh electricity and 3.5c per MJ gas. Whole home assumes a 15 kW system running 8 hours a day across a 120 day Melbourne winter. Change the rates in the calculator to match your own bill.
When gas can still make sense
Switch to reverse cycle when
- Your gas ducted heater is old and due for replacement anyway
- You want cooling in summer from the same system
- You qualify for a VEU rebate on the changeover
- You have solar, which makes the electricity side cheaper again
Keeping gas may be reasonable when
- Your gas ducted system is fairly new and running well
- Your switchboard cannot yet carry the electrical load without an upgrade
- You are on a very cheap legacy gas rate (check it against the calculator)
- You are moving out soon and will not see the payback
If you are weighing a switch, our guide on going from gas to electric in Victoria covers the full picture, including what decommissioning the old heater involves.
Work out your own numbers
Frequently asked questions
Is gas or electricity cheaper for heating?
For heating a home in Melbourne, electricity is cheaper, as long as you use a reverse cycle system. A heat pump delivers about 4 units of heat per unit of electricity, so a kilowatt hour of warmth costs about 7.5 cents, against about 18.5 cents from gas ducted heating. Plain electric heaters are the exception: they cost about 30 cents per kilowatt hour of heat, which is the most expensive way to heat.
Is gas heating cheaper to run than reverse cycle?
No, not at current Victorian rates. Heating a whole home for a winter costs roughly $1,600 on gas ducted heating against roughly $650 on reverse cycle, for the same warmth. The gap comes from efficiency: gas turns about 68 percent of its fuel into heat, while a heat pump multiplies each unit of electricity about fourfold.
Why is electric heating sometimes called expensive then?
Because people mean plain electric heaters, panel heaters, fan heaters and oil column heaters. Those are 100 percent efficient at best and cost about 30 cents per kilowatt hour of heat, which is genuinely expensive. Reverse cycle is a completely different technology and costs about a quarter of that.
Does it still work when electricity prices rise?
The comparison is about the ratio, not the absolute price. Because a heat pump is roughly four times as efficient, electricity would have to become far more expensive relative to gas before gas caught up. You can test this yourself by changing both rates in the calculator above to match your own bills.
Can I get a rebate for switching from gas to electric?
Often, yes. Replacing gas ducted heating with an efficient reverse cycle system is a core Victorian Energy Upgrades activity, with indicative discounts of $3,000 to $5,500 for ducted systems. The old heater must be properly decommissioned as part of the claim.
Thinking about switching off gas?
We will look at your existing system, check what your switchboard can carry, size the replacement properly, apply any VEU rebate and give you a fixed price. If gas still suits your situation, we will tell you that too.
Book your free assessment Or call 0412 769 022.