Running Costs Compared: Aircon vs Gas Heating in Victoria

For decades the answer in Victoria was automatic: heat with gas, cool with electricity. Gas was cheap, ducted gas heaters were everywhere, and air conditioners were for February only. That logic has quietly flipped, and the reason comes down to one number most people have never heard of.

The efficiency gap nobody mentions

A gas heater makes heat by burning fuel, and even a good modern unit turns only around 80 to 95 per cent of that fuel into warmth in your rooms — the rest goes out the flue. A reverse-cycle air conditioner doesn't make heat at all; it moves it, pumping warmth from the outside air into your home. That trick means a quality unit delivers three to five units of heat for every unit of electricity it consumes. Engineers call it the coefficient of performance; on your bill, it means each kilowatt-hour of electricity buys you several kilowatt-hours of warmth.

What that means in dollars

Run the numbers with typical Victorian tariffs and the gap is hard to ignore. Gas is priced per megajoule, electricity per kilowatt-hour, which makes direct comparison messy — but once you convert both to the cost of useful heat delivered into the room, reverse-cycle heating routinely comes out at half to a third of the cost of ducted gas for the same warmth. Households that also have rooftop solar do even better, because daytime heating in winter can run partly on self-generated power that costs them almost nothing.

Don't forget the standing charges

There is a second, sneakier saving. Staying connected to gas means paying a daily supply charge every single day of the year, whether you burn any gas or not. For a home that only uses gas for heating — with electric cooking and hot water — that standing charge alone can add a meaningful chunk to annual costs. Electrifying the last gas appliance and disconnecting entirely removes it for good, which is why so many new Victorian estates are now built all-electric from day one.

Where gas still gets a hearing

Fairness matters: an existing ducted gas system that works well doesn't need to hit the skip tomorrow. The economics favour switching when the gas unit is nearing the end of its life, when a compressor or heat exchanger fails, or when you are already installing cooling anyway — because a reverse-cycle system does both jobs with one set of hardware. Paying for one system instead of two is a saving before you have run it for a single hour.

The bottom line

Heating with a modern reverse-cycle system costs less to run than gas in almost every Victorian scenario we model, and government incentives for efficient electric appliances can lower the switching cost as well. If your gas heater is a decade old, ask us to price the comparison for your actual home before you spend money keeping it alive.