Gas Ducted vs Reverse-Cycle: Which Is Cheaper to Run in an Australian Winter?

For most Australian homes, a ducted reverse-cycle system is cheaper to run in winter than ducted gas heating, even though gas costs less per unit of energy. The difference comes down to efficiency. A reverse-cycle heat pump delivers 3 to 6 units of heat for every unit of electricity it draws, while a gas heater converts only about 85% of its fuel into usable heat. At Heating Experts, we install and service both ducted gas heaters and reverse-cycle systems across Australia, and on real winter bills the running-cost gap we see usually lands between 30% and 70% in favour of reverse-cycle.

That answer is not automatic, though. The result depends on your electricity and gas tariffs, your climate, the efficiency of your specific unit, and how you use it. This guide walks through the two factors that decide the outcome, shows the per-hour and per-year numbers from recent Australian studies, and explains the situations where gas can still hold its own.

The short answer: which costs less to run?

Reverse-cycle ducted heating is usually the cheaper system to run through an Australian winter. Gas is cheaper per unit of energy, but reverse-cycle uses so much less energy to produce the same warmth that it wins on the total bill in nearly every climate studied. Independent modelling and household cost studies have found reverse-cycle came out cheaper in every location tested, from cold Canberra to mild Adelaide.

The catch is that "cheaper to run" is not the same as "cheaper to install." Gas ducted heating still has a place, and we cover when it makes sense further down.

Why gas is cheaper per unit but not cheaper to run

Two numbers decide this comparison: the price you pay per unit of energy, and how efficiently your heater turns that energy into heat.

On price per unit, gas wins. In 2025 to 2026, residential electricity runs roughly 26 to 44 cents per kWh in major cities, while natural gas sits around 3 to 6 cents per MJ. Since 1 kWh equals 3.6 MJ, that gas price works out to about 10 to 20 cents per kWh of energy. On a like-for-like energy basis, gas is clearly cheaper to buy.

On efficiency, reverse-cycle wins by a wide margin. A modern ducted gas heater is about 80 to 95% efficient, so it produces 0.8 to 0.95 kWh of heat per kWh of fuel. A reverse-cycle heat pump moves heat rather than burning fuel, so it produces 3 to 6 kWh of heat per kWh of electricity. According to government energy advice, reverse-cycle air conditioning is "300 to 600% efficient," while gas heaters "typically turn only 85% of the gas into useable heat."

When you combine the two numbers, the efficiency multiplier usually beats the fuel-price gap. Here is how the cost of one kWh of delivered heat compares in Melbourne, using the tariffs above.

A heat pump running at a COP of 3 makes heat for around 9 cents per kWh, cheaper than gas at 13 cents. At a COP of 4 or higher, which good units reach in mild conditions, the gap widens further. This is also why old electric-resistance heaters got a bad reputation: at 26 cents per kWh of heat they really were expensive, roughly double the cost of gas. Reverse-cycle is a different technology, and the comparison changes completely.

How much does ducted gas heating cost to run?

A whole-home ducted gas heater typically uses about 20 to 25 MJ of gas per hour, which is around 5.6 to 7 kWh of energy. At average rates, that costs roughly $0.70 to $1.20 per hour to run, before the daily gas supply charge is added. Over a full winter of regular use, those hours and standing charges add up quickly. We break down the full picture in our guide on the cost to run ducted gas heating.

Gas heating also loses some heat up the flue by design, which is where the missing 5 to 15% of efficiency goes. That loss is normal and safe, but it is energy you pay for and do not feel.

How much does a ducted reverse-cycle cost to run?

A ducted reverse-cycle air conditioning system sized for a home, around 5 to 7 kW of output at a COP near 3, draws about 1.8 to 2.3 kW of electricity while heating. That works out to roughly $0.72 to $0.91 per hour at a 40 cents per kWh tariff, with no separate fuel supply charge.

Here is the per-hour comparison side by side.

At full output the two systems can look close on an hourly basis. The gap opens up over a season for a few reasons. Reverse-cycle units modulate their output and run at higher COP once a room is near temperature, gas systems keep a daily supply charge ticking over, and zoning lets a reverse-cycle system heat only the rooms in use. Those effects compound across hundreds of winter hours, which is why the annual studies below show a much larger difference than the hourly figures alone suggest.

Real running-cost comparisons from Australian studies

The clearest evidence comes from independent household studies rather than manufacturer claims.

A report by Renew for the South Australian Council of Social Service looked at a typical three-bedroom Adelaide home. Ducted gas heating cost about $1,444.85 a year, while heating the same home with a reverse-cycle air conditioner cost $476.61. Adding ceiling insulation brought the reverse-cycle figure down to $269.87.

That is a saving of roughly $970 to $1,175 a year, or 50 to 80%, from switching off gas and using a heat pump instead.

Broader CSIRO housing research citing Renew found similar annual savings across the capitals from replacing a gas heater with an efficient split system: about $546 in Canberra, $440 in Adelaide, $409 in Melbourne and $256 in Perth. The same research noted that heating with reverse-cycle is roughly four times more efficient than natural gas.

Does the answer change by climate and city?

This is where many people expect gas to win in colder regions, so it is worth looking closely. University of Melbourne modelling compared space-heating costs for a large home across several climates and found reverse-cycle was cheaper in every case.

The largest savings actually showed up in the coldest climate. Canberra homes use a lot of heat, so a system that produces that heat at a quarter of the energy cost saves the most in absolute terms. In milder Adelaide, the heating season is short and both systems cost little, so the dollar saving is smaller even though the percentage still favours reverse-cycle.

When ducted gas heating can still make sense

Reverse-cycle wins on running cost in almost every scenario, but a few situations still favour keeping gas.

• You already have a well-functioning ducted gas system and are not ready to replace it. Running an existing unit is cheaper than replacing a working one before the end of its life.
• You are on an unusually cheap gas tariff or have a very high electricity rate with no solar, which narrows the gap.
• You value the specific feel of gas heat, which some households prefer, and comfort is worth more to you than the running-cost saving.
• Your switchboard or supply would need costly upgrades to support a large reverse-cycle system, changing the total economics.

For a working system, the sensible move is often to run it efficiently now and plan the changeover for when it needs replacing. Regular servicing keeps either system running at its rated efficiency, which protects your running costs whichever fuel you use.

Switching from gas ducted to reverse-cycle

If your gas heater is nearing the end of its life, replacing it with a reverse-cycle is where the running-cost savings above become real. In most homes the existing ductwork can be reused, which keeps the changeover straightforward and usually completes in one to two days. We handle ducted heating installations directly, and for full changeovers we work with installers, whose gas to reverse-cycle conversion service reuses existing ducts to keep costs down.

A reverse-cycle changeover also gives you cooling for summer from the same system, removes the daily gas supply charge from your bill, and lets you pair heating with rooftop solar. If you are planning a new system rather than a conversion, a correctly sized ducted reverse-cycle installation matters more than headline efficiency, because an oversized unit short-cycles and an undersized one runs flat out at lower COP.

Frequently asked questions

Is reverse-cycle cheaper than gas ducted heating in Melbourne?

Yes. University of Melbourne modelling put annual heating for a large Melbourne home at $1,049 with gas versus $391 with reverse-cycle, a saving of $658 a year, or 63%. Melbourne's temperate winter suits heat pumps well because they hold a high COP through most of the season.

Does a reverse-cycle cost more to run on very cold days?

A heat pump's efficiency does fall as the outside air gets colder, so its COP drops on the coldest mornings. Even with that drop, reverse-cycle stayed cheaper to run than gas across every climate studied, and it produced the biggest savings in the coldest city, Canberra, where a large home saved $1,733 a year. The efficiency dip on cold days is real, but it does not erase the running-cost advantage.

Is gas or reverse-cycle better if I have solar panels?

Reverse-cycle is the clear choice with solar. It runs on electricity, so daytime solar generation can offset much of its heating cost, and pre-warming the home while the sun is up stores that value. Gas heating cannot use solar power at all.

Can I reuse my existing ducts when converting from gas?

In most homes, yes. Ducted reverse-cycle systems can usually reuse the existing ductwork from a gas heater, which keeps the conversion cost well below starting from scratch and means most changeovers are finished in one to two days.

The bottom line

Natural gas is cheaper per unit of fuel, but reverse-cycle systems produce heat so much more efficiently that they win on the winter running cost in nearly every Australian home. Recent studies put the saving anywhere from around 30% in mild climates to more than 70% in cold ones, with the biggest dollar savings in the coldest regions. Gas still suits some households, especially those with a working system, but for a new install or a replacement, reverse-cycle is almost always the cheaper system to run.

If you want to know which system will cost you least based on your climate, tariffs and home, book a heating assessment with our team and we will run the numbers for your situation before you commit to anything.