Heating your home through winter can add significantly to your energy bills, particularly if you're using a heater that costs more to run.
There are several types of heaters available in Australia, ranging from built-in systems to portable electric models, and the running costs between them can vary significantly. Understanding your options can help you find the right fit for your home and budget before the cold really bites.
Types of heaters available in Australia
Reverse-cycle air conditioners
A reverse-cycle air conditioner is a split-system or ducted air conditioner that can both cool and heat your home. In heating mode, it draws warmth from outside air and transfers it indoors. These systems are usually fixed to the home and can be used to heat a single room, multiple rooms or an open-plan area, depending on the size and type of system.
Pros
- Efficient to run
- Can be used for heating in winter and cooling in summer
Cons
- Higher upfront installation cost
- Requires cleaning and maintenance to keep running efficiently
Plug-in electric heaters
Plug-in electric heaters use electricity from a standard power point to create heat. They are usually portable and can be useful for heating one room or a small area.
Pros
- Cheaper to buy upfront
- Useful for single rooms and small spaces
Cons
- Higher running costs
- Less effective for larger rooms or whole-home heating
Common types include:
Convection heaters
Convection heaters use electricity to warm the air, which then circulates naturally around the room. They are usually used for small to medium spaces and can provide steady background warmth.
Panel heaters
Electric panel heaters are slim heaters that can be wall-mounted or freestanding. Many work by convection, warming the air around them, and are often used in bedrooms, studies or smaller living areas.
Fan heaters
Electric fan heaters use a heating element and a fan to blow warm air into the room. They can warm small spaces quickly and are often used for short periods.
Oil column heaters
Oil column heaters use electricity to heat oil sealed inside the unit. The heated oil warms the metal columns, which then release heat into the room. They take longer to warm up, but can provide steady heat once running.
Radiant heaters
Electric radiant heaters use electricity to heat an element that radiates warmth directly to people and objects nearby. They are usually best for spot heating rather than warming a whole room.
Gas heaters
Gas heaters burn natural gas or LPG to create heat. They can be portable or fixed in place, and may be flued or unflued. Flued models vent exhaust gases outside through a pipe, while unflued models release combustion gases into the room and require adequate ventilation. Rules around where unflued heaters can be used vary by state, but they are generally not suitable for bedrooms, bathrooms or poorly ventilated spaces.
Pros
- Can heat spaces quickly
- May be cheaper to run than plug-in electric heaters
Cons
- Requires proper ventilation and may not be suitable for certain spaces
- Burning gas produces greenhouse gas emissions
What about wood heaters?
Wood heaters are still used in some Australian homes, particularly in colder regional areas. However, because they produce smoke and air pollution, their use is increasingly regulated. Some governments and councils offer rebates to remove or replace old wood heaters with cleaner heating options.
What’s the cheapest heater to run in Australia this winter?
We looked at three broad heater types, reverse-cycle air conditioners, plug-in electric heaters and gas heaters, to give a like-for-like comparison of running costs across Australia.
Based on our modelling, reverse-cycle air conditioning is the cheapest heater to run in every state.
Here's how the costs compare, based on the equivalent of 2,000W of heat output used for four hours a day over 90 days:
| State | Electricity rate | Gas rate | Reverse-cycle | Plug-in electric | Gas heater |
|---|---|---|---|---|---|
| NSW | 33.96c/kWh | 4.72c/MJ | $82 | $245 | $144 |
| VIC | 28.20c/kWh | 3.93c/MJ | $68 | $203 | $120 |
| QLD | 27.97c/kWh | 6.87c/MJ | $67 | $201 | $210 |
| SA | 41.90c/kWh | 6.43c/MJ | $101 | $302 | $197 |
| WA | 33.26c/kWh | 3.47c/MJ | $80 | $239 | $106 |
| TAS | 24.75c/kWh | N/A | $59 | $178 | N/A |
| ACT | 36.95c/kWh | 4.30c/MJ | $89 | $266 | $132 |
| Costs are estimates based on equivalent 2,000W heat output, 4 hours per day, 90 days. Electricity rates sourced from regulated benchmarks or standing offer usage rates in July 2026. Gas rates based on average first-block usage rate across available retailers, sourced from WATTever in July 2026. Gas rates were not available for Tasmania. Electricity and gas rates were not available for the Northern Territory. Actual costs will vary depending on your energy plan, heater size, insulation, usage patterns and location. | |||||
What the numbers show
Reverse-cycle air conditioning is by far the cheapest heating option in every state. It costs roughly two to three times less to run than a plug-in electric heater delivering the same heat output.
The next cheapest option depends on the state. Gas is cheaper than plug-in electric heating in NSW, Victoria, WA and the ACT, where gas rates are lower. In Queensland and South Australia, gas is more expensive than plug-in electric heating under this model.
Tasmania has the lowest electricity costs in the comparison, making plug-in electric heating more affordable there than in the rest of the country. However, reverse-cycle air conditioning is still the cheapest option based on our modelling.
Why reverse-cycle is cheaper to run
The reason reverse-cycle systems are cheaper comes down to efficiency. While a standard plug-in electric heater turns electricity directly into heat, meaning that 2kW of electricity gives you about 2kW of heat, a reverse-cycle air conditioner can produce the same amount of warmth using much less electricity.
In our modelling, it only needs about 0.67kW of electricity to produce the equivalent of 2kW of heat. Because it uses less power to deliver the same amount of warmth, it costs less to run.
Be aware that not all reverse-cycle systems perform the same way in every climate. Each model will carry a Zoned Energy Rating Label that shows how efficient an air conditioner is in different Australian climate zones, including hot, average and cold regions. If you live somewhere with colder winters, it’s worth checking the heating rating for your zone before choosing a system.
Plug-in electric heaters cost the same at the same wattage
Panel heaters, fan heaters, oil column heaters, convection heaters and radiant heaters convert all the electricity they use into heat. This means a 2kW fan heater, 2kW panel heater and 2kW oil column heater will each use the same amount of electricity if they run for the same amount of time.
What changes is how they deliver heat. A fan heater may warm a small room quickly, an oil column heater may hold warmth for longer, and a radiant heater may feel warmer when you are sitting close to it. However, these differences do not make one cheaper to run than another at the same wattage.
Comparing gas heaters
Gas heaters are harder to compare than plug-in electric heaters because their efficiency can vary more.
While plug-in electric heaters turn 100% of the electricity used into heat, gas heaters burn fuel to create warmth, and not all of that heat makes it into the room.
This means two gas heaters with the same MJ/h input may not deliver the same amount of usable heat. One heater may lose more heat through its flue or exhaust system, while a more efficient model may keep more of that heat inside the home.
Gas heater energy labels can make models easier to compare. In Australia, gas heaters are rated from one to six stars, with each extra star representing roughly a 10% saving in gas use. This means higher-rated models use less gas to produce the same amount of heat.
How to work out your own heater running cost
The figures above are based on assumed heater sizes and energy rates. To estimate your own running costs, you’ll need three things:
- Your heater’s energy use
- Your electricity or gas usage rate
- How long you use the heater
Reverse-cycle systems
For a reverse-cycle air conditioner, check the energy rating label or product specifications for its heating power input. This tells you how much electricity the unit uses while heating. You can then use the same formula:
Heating input in kW × electricity rate × hours used = running cost
Electric heaters
For most plug-in electric heaters, use this formula:
Heater size in kW × electricity rate × hours used = running cost
For example, a 2kW electric heater used for four hours at an electricity rate of 30c/kWh would cost:
2 × $0.30 × 4 = $2.40 per day
If your heater lists its power in watts, divide the number by 1,000 first. For example, 2,000W is the same as 2kW.
Gas heaters
For a gas heater, use the appliance’s MJ/h rating:
MJ/h rating × gas rate × hours used = running cost
For example, a gas heater using 8.5MJ/h for four hours at a gas rate of 4c/MJ would cost:
8.5 × $0.04 × 4 = $1.36 per day
To estimate your winter cost, simply multiply your daily running cost by the number of days you expect to use the heater.
What's the best heater for me?
The cheapest heater to run isn't always the best choice. The right option depends on your home, budget and how you plan to use it.
If you're renting
A portable electric heater is often the easiest option because it doesn't require installation or landlord approval. However, if your rental already has a reverse-cycle air conditioner or fixed gas heater, it's usually much cheaper to use that instead.
If you own your home
If you heat your home regularly through winter, installing a reverse-cycle air conditioner can pay off over time thanks to its lower running costs. It also doubles as an air conditioner in summer. Ducted gas heating can be worth considering if your home is already connected to gas or has an existing system.
If you're heating one room
A reverse-cycle split system is generally the cheapest option to run over time. If you only need occasional heating or don't want to install anything, a portable electric heater may be the better choice despite its higher running costs.
Other things to consider
- Upfront cost: portable electric heaters can cost under $100, while fixed heating systems cost thousands to buy and install.
- Gas availability: not every home has a natural gas connection, and new gas connections are becoming less common in some areas.
- Safety: look for tip-over protection and cool-touch surfaces if you have children or pets. Unflued gas heaters should only be used in well-ventilated areas.
- Insulation: even the most efficient heater will cost more to run if your home loses heat through gaps, poor insulation or draughts. Improving insulation or sealing draughts can reduce your heating costs regardless of the heater you use.
Tips for saving on your heating bill this winter
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Keep the thermostat down
Set your heater to a comfortable but moderate temperature. For reverse-cycle air conditioners, around 18°C to 21°C is often enough for heating. Each degree you decrease can save up to 10% on heating costs.
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Only heat the rooms you are using
Close doors to unused rooms and focus heating on the areas you actually spend time in. Heating one room is usually cheaper than trying to warm the whole home.
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Block draughts
Seal gaps around doors and windows to help stop warm air escaping. Draught stoppers, door seals and window seals can be simple ways to reduce heat loss.
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Use sunlight during the day – and curtains at night
Open curtains and blinds on sunny days to let natural warmth in, then close them again in the evening to help keep heat inside.
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Layer up before turning the heater higher
Wearing warmer clothing, using blankets and adding extra bedding can help you stay comfortable without relying as heavily on heating.
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Maintain your heating system
Clean filters and have fixed heating systems serviced when needed. A poorly maintained system may have to work harder to heat the same space.
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Find the best energy plan
Review your electricity plan regularly to make sure you're not paying more than you need to. A cheaper tariff or better deal could lower your heating costs without changing how you use energy.
Government energy rebates and programs: 2026
There are a range of government rebates, incentives and support programs that can help Australians with energy bills, heating costs and energy-efficiency upgrades.
Nationally, the Household Energy Upgrades Fund offers discounted finance through participating lenders to help households upgrade their homes with products such as insulation, solar, batteries, modern appliances and efficient heating and cooling systems.
Some states and territories also offer rebates, discounts, concessions or free home energy assessments to help households stay warmer in winter and reduce energy use.
Support varies depending on where you live, your energy retailer, whether you own or rent and the program’s specific eligibility criteria. Some states and territories offer a range of rebates and upgrade programs, while others have limited or no state-wide schemes. Here are some of the programs currently available:
