Short answer first: in most Australian homes a reverse-cycle air conditioner is the cheapest of the three to run, and that comes down to physics rather than marketing. Gas heaters and electric column heaters both make heat. A reverse-cycle system moves heat that is already in the outside air and carries it indoors, so it can put more warmth into your lounge room than the electricity it draws. Cheapest to run is not the same as cheapest to install, though, and your own gas and power rates shift the answer.
What the three options actually do
They all get lumped together as heating, but they work in completely different ways, and that difference is where the running cost comes from.
- Reverse-cycle air conditioning: a heat pump running the refrigeration cycle backwards, pulling heat out of the outdoor air and releasing it inside. Same box that cools you in summer.
- Gas heating: burns natural gas or LPG, whether that is a flued wall heater, a ducted system, or an unflued portable unit.
- Electric resistance heating: panel, fan, oil column and strip heaters that push current through an element and turn it straight into heat.
If the heat pump idea is new to you, our explainer on how air conditioning actually works walks through the cycle. Heating mode is that same cycle reversed.
Why reverse cycle usually comes out in front
An electric resistance heater is a one for one deal. Every unit of electricity you pay for becomes roughly one unit of heat in the room, and it cannot do better than that, because there is nowhere else for the energy to go. That is why a plug-in column heater feels cheap on the shelf and stings on the quarterly bill.
A heat pump is not manufacturing warmth from scratch, it is shifting warmth that already exists. The electricity it consumes goes into running a compressor and a couple of fans, not into making the heat itself. That is the whole reason it can deliver more heat energy into the room than the electrical energy it uses.
Two honest caveats. Heat pumps work harder as the outdoor air gets colder, and they pause occasionally to defrost the outdoor coil, so the advantage narrows in a genuine cold snap. And a system that is the wrong size will disappoint you in heating exactly as it does in cooling, which is why getting the capacity right matters more than the badge on the front.
The things that actually move your bill
Whichever option you land on, the same factors decide what it costs you:
- Your rates: what you pay per unit of gas and electricity, including the daily supply charge on a gas connection you may barely touch for half the year.
- Hours of use: a heater running all evening in an open-plan living area costs far more than one warming a bedroom before bed.
- Your setpoint: every extra degree you ask for is more work for the appliance.
- The space itself: ceiling height, glazing, draughts and insulation decide how much heat leaks straight back out.
- Condition of the gear: clogged filters and a choked outdoor unit quietly push costs up, which is the point of a simple maintenance routine.
We have pulled those levers apart in our guide to what it costs to run air conditioning in Australia. Rather than trusting a cents-per-hour figure you found online, dig out your own bills and check what you actually pay per unit of each. That is the only comparison that means anything for your house.
Comfort and safety, not just cents
Reverse cycle heats and cools from the one appliance, filters the air as it circulates, and can be zoned so you are not paying to warm empty bedrooms. Some people do find it dries the air out more than they would like.
Gas gives a heat plenty of people describe as softer, and a ducted gas system can bring a whole house up to temperature quickly. The trade-off is that a gas appliance burns fuel inside your home, which makes servicing a safety matter rather than a nice-to-have. Energy Safe Victoria advises having gas heaters serviced by a licensed gasfitter at least once every two years, because a faulty or poorly maintained heater can produce carbon monoxide. Check the guidance from the regulator in your own state, as the detail varies.
Electric heaters are quiet, instant, need no installation and genuinely suit a room you only heat now and then. Lean on one all winter and it will be the dearest way to stay comfortable.
Who is legally allowed to install what
This is where the three diverge sharply, and install cost is part of the total.
- Reverse cycle: licensed work on both sides. The refrigerant side needs a technician holding a refrigerant handling licence issued through the Australian Refrigeration Council, and the dedicated circuit and isolator are the job of a licensed electrician.
- Gas: installing or connecting a gas heater is licensed gasfitting work, regulated by the energy safety body in your state, such as Energy Safe Victoria.
- Electric plug-in heaters: no installation, you plug them into an existing power point. The one properly DIY option of the three.
So how do you decide?
If you are heating regularly through winter and want the lowest ongoing cost, reverse cycle is the sensible default, especially since the same unit cools you in summer. If you already have a well-maintained ducted gas system and cheap gas rates, the case for ripping it out today is weaker than the internet suggests, so run the numbers on your own bills first. And if you are heating one small room occasionally, or renting and unable to install anything, a plug-in electric heater is a fair answer despite the running cost.
What trips people up is comparing sticker prices instead of total cost across the years they will own the thing. A cheap heater that runs expensively is not a saving.
