Compare the running cost of gas and electricity in Australia for heating, hot water and cooking, and why the answer depends on your appliances and rates.
Whether gas or electricity is cheaper to run depends on what you are running, how efficient your appliances are, and the rates you pay for each fuel. A blanket claim that "gas is cheaper" was closer to true a decade ago; today, efficient electric appliances have changed the maths for many households.
The honest way to answer it is per unit of useful heat delivered, not per unit of energy bought. Gas is sold in megajoules and electricity in kilowatt-hours, and the appliances that turn each into heat vary wildly in efficiency. Comparing the sticker rate of gas against the sticker rate of electricity tells you almost nothing until you account for that.
Heating: the efficiency gap is huge
A gas heater turns most (but not all) of the gas it burns into heat in the room. A reverse-cycle air conditioner (heat pump) does something different: it moves heat rather than making it, so for every unit of electricity it draws it can deliver roughly three units of heat. That efficiency multiplier is why a modern reverse-cycle system is often cheaper to run than gas ducted heating, even when electricity costs more per unit of energy than gas.
The catch is upfront cost and the state of your existing system. If you already have gas ducted heating installed and working, the running-cost saving from switching to reverse-cycle has to pay back the installation. If you are replacing an old system anyway, the calculus tilts strongly toward electric. For the detailed numbers, see our breakdown of what ducted heating costs to run, gas versus electric, and the seasonal picture in winter heating costs in Australia.
Hot water and cooking
For hot water, a heat-pump electric system is usually the cheapest to run, followed by gas, with conventional electric-resistance (element) storage the most expensive per litre heated. Solar hot water and a heat pump paired with daytime solar generation can push running costs lower still. Our full comparison of hot water running costs sets out the per-year figures.
Cooking is a smaller load, so the running-cost difference between gas and induction is minor in dollar terms. The choice there is more about preference, kitchen setup and whether you want to keep a gas connection at all.
Coefficient of performance (COP)
How many units of heat a heat pump delivers per unit of electricity it uses. A COP of 3 means three times more heat out than electricity in.
Kilowatt-hour (kWh)
The unit electricity is billed in. Roughly 3.6 megajoules of energy, though appliance efficiency changes how much useful heat that becomes.
The supply charge factor people forget
If you keep a gas connection just for cooking or a single appliance, you keep paying the daily gas supply charge all year. Over twelve months that fixed fee can outweigh the running-cost benefit of the appliance itself. For some low-gas-use households, disconnecting gas entirely and going all-electric saves money simply by removing a standing charge, even before running costs are counted.
This is why the gas-versus-electricity question is really a whole-household question. EnergySorted costs your gas and electricity plans on your real usage, so you can see what each fuel actually contributes to your bills before deciding whether it is worth keeping both connections. If cutting the gas bill without ripping out appliances is your goal, start with our ways to save on your gas bill.
Frequently asked questions
Is gas or electricity cheaper for heating?
For most homes, a modern reverse-cycle air conditioner (heat pump) is cheaper to run than gas heating because it delivers around three units of heat per unit of electricity. Gas can still win where electricity rates are very high or the heater is used lightly, so cost it on your own rates.
Should I go all-electric and disconnect gas?
It can make sense, especially if you only use gas for one appliance and are paying a daily supply charge all year for it. Weigh the removed supply charge and lower running costs against the upfront cost of replacing gas appliances with efficient electric ones.
How do I compare gas MJ against electricity kWh?
Convert both to the cost of useful heat delivered, which means accounting for appliance efficiency. One kWh is about 3.6 MJ of energy, but a heat pump multiplies that, while a gas heater loses some to flue and inefficiency. Comparing raw unit prices is misleading.
Is gas cooking cheaper than induction?
The running-cost difference is small because cooking uses relatively little energy. The bigger consideration is whether keeping gas just for the cooktop is worth the annual supply charge if that is your only gas appliance.
Do electricity rates make electric heating too expensive?
Not usually, because heat pumps are so efficient. Even at higher per-unit electricity prices, the roughly threefold efficiency advantage of reverse-cycle heating typically keeps its running cost at or below gas.
Is a heat-pump hot water system cheaper than gas?
For most homes, yes. A heat pump uses a fraction of the energy of an element system and typically runs cheaper than gas, especially if you can run it on daytime solar. Continuous gas hot water narrows the gap but the daily supply charge still counts against gas.
How much does gas ducted heating actually cost to run?
It depends on your climate, how many rooms you heat and your gas rates, but ducted heating is the single biggest gas load in most homes. Costing it against a reverse-cycle alternative on your own usage is the only way to know which wins for you.
Does keeping gas just for the cooktop make sense?
Only if the annual supply charge is worth it to you. If cooking is your last gas appliance, you are paying a daily connection fee all year for a small load. Many households in that position find going all-electric cheaper once the supply charge is removed.
Do I need solar to make going all-electric worthwhile?
No, but it helps. Efficient electric appliances beat gas on running cost even without solar, and pairing them with daytime generation pushes costs lower still. Our guide on whether solar is worth it in Australia covers the payback.
How do I see what each fuel is really costing me?
Separate usage from rates on each bill, then cost both fuels on your actual consumption. EnergySorted prices your gas and electricity plans on your real usage so you can see exactly what each connection contributes before deciding whether to keep both.
Is gas hot water cheaper than electric?
It beats old element storage but usually loses to a modern heat pump on running cost. Continuous (instantaneous) gas hot water avoids standby losses, which narrows the gap, but the daily gas supply charge still counts against it if gas is your only remaining appliance.
General information only, current at the time of writing. Not financial advice. Rebate schemes and rules
change; always confirm details with your retailer or state government energy site.
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