gas heater. is gas cheaper than electricity

It’s autumn, the weather is finally starting to cool, and in some homes in Australia ducted heating systems are being switched on for the first time this year, sending hot air through chilly rooms.

What many people who switch on gas heating won’t realise is that their bills will be higher – possibly significantly higher – than if they were warming their homes with an electric reverse-cycle airconditioner.

The old perception that gas is cheaper than electricity is, sadly, still prevalent, despite the fact that gas prices are rising and the latest electric appliances are many times more efficient in their use of energy than their gas counterparts.

Clever electric technology like heat pumps for hot water and reverse-cycle airconditioners for space heating can use one megajoule of energy to transfer between 4-5 MJ of heat. With gas, by contrast, 1 MJ becomes at best 0.9 MJ of heat in a burner. If a home uses ducted heating, about one-third of that heat will be lost under the floor and one-third will go up the flue to mitigate against carbon monoxide.

Part of the problem when it comes to public perception is the misleading messaging coming from the gas industry. Battered by low commodity prices and the unpopularity of coal seam gas, the industry is trying to shore up its product by continually asserting that gas is “cheaper” than electricity.

Last month the Australian Pipelines and Gas Association put out a statement saying Australian households use about the same amount of energy from electricity as gas but pay much less for the latter, so “if we are looking to reduce our household energy bills, we should use gas for as much of our energy needs as possible,” the statement concluded.

What is patently misleading about this claim is that, while gas is cheaper per unit of energy than electricity, it is much less efficient and so – both from an economic and environmental point of view – it makes more sense to be using efficient electric appliances for a home’s space heating and hot water.

The gas industry has been slow to acknowledge this fact, at least publicly. The Alternative Technology Association has written to the ACCC alerting it to misleading claims being made by gas companies about the cost and efficiency of gas. One gas company website, for instance, carried the following assertions: “Far more efficient than electric heating systems, natural gas solutions can save you money and provide a comfortable temperature more quickly,” and “[Gas ducted heating] is a far more efficient and less obtrusive way to heat multiple rooms compared to operating several portable or wall-fixed heaters.”

In 2014 the ATA conducted exhaustive research on the comparative economic and environmental benefits to households of using gas appliances versus electric ones. We found many households in Australia would reduce their bills by switching from gas to efficient electric appliances. Switching would also be environmentally beneficial, reducing carbon emissions.

Our research analysed the economics of new, high-efficiency gas appliances compared with equivalent new efficient electric appliances for space heating, water heating and cooking. By “efficient electric appliances” we mean heat pumps for water heating, reverse-cycle airconditioners for space heating, and induction cook tops and efficient electric ovens.

The analysis was conducted across different states and climate zones, household types and gas pricing zones to understand the potential costs and benefits.

We found that it is no longer economic for any new home, or existing all-electric home, anywhere in Australia to connect to mains or bottled gas compared with installing and operating efficient electric appliance alternatives. And this finding held true even without the installation of solar panels at the residence (which now provide electricity cheaper than from the grid).

Another major finding was that for many existing dual-fuel homes in warmer climates, progressively switching all appliances from gas to efficient electric – when they are due for replacement, and in some cases beforehand – is more cost-effective than replacing the same appliances with efficient gas ones.

Gas just isn’t as competitive against electricity as it used to be. So a word of caution this autumn and winter: if you rely on gas for heating but you also have a reverse-cycle airconditioner, think twice before flicking the switch on the gas appliance. Using a reverse-cycle air-conditioner to heat your home will almost certainly lower your bills.

Kate Leslie is an energy and water analyst at the Alternative Technology Association, a national not-for-profit organisation that promotes sustainable living.

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  1. As Jack says – there is a distinct difference between the room heated with gas and the one heated with split system. On top of this there is another very significant difference – the ducted gas heating with properly acoustically insulated ducts is quiet – one can barely hear it, compared to the split systems which are invariably noisy.
    Cooking on gas is something that all chefs around the world use (if they can). There are very good reasons for that – instantaneous temperature control, faster cooking etc. Different for ovens – they are better electric.
    I live in inner East Melbourne. My place has highly efficient gas ducted heating and equally efficient instantaneous flow gas boiler, gas stove and gas oven. I use electricity for lighting (all fluoerescents), fan in the central heating machine, and an umber of other small white goods (hair drier, kettle, toaster, computers, TV). If I total gas and electricity bills over one year, the electricity is about 30% less. I pay around $1200/an gas (all big users are gas) and around $900 electricity (almost nothing).
    It might be that switching to electricity from old inefficient appliances is cost effective, but it is certainly not true generally.

  2. Challenging topic.
    We have both AC unit and gas fire.
    A gas fire, we have one in an old wood fireplace that makes a great red coal look alike, radiates infa red warmth that heats not only your body but the walls the couch the table everything in the room. Not only is it proven that warm surfaces near your body make you physically hotter the psycholocal effect far exceeds being near cool surfaces.
    What people don’t often realize is that the AC unit heats only air and has limited to no heating effect on the surfaces of objects around you.
    So a room that is heat to 25C by AC and a room at 25C heated by radiant heat like gas the latter is always sensed as warmer. It is because of the surfaces being hotter.

    Also the AC heated room once the unit turns off goes down in temp straight away. The Gas heated room particularly if it has thermal mass and insulation takes a long period of time to cool down slowly tackling out the embedded warmth.

    Gas is a clean energy zero carbon burn however electricity in most of Australia burns Co2 from coal generated power.

    Be warm stay warm and be gentle on the planet – use gas!

    1. Hi all,

      Thanks for contributing to the conversation and adding your comments. You can read our 2014 study, with all its assumptions (in the Appendices) at

      Zorana, Our study compared the same level of service from efficient appliances readily available, whether gas or electric. Yes, the gas hot water system was ‘5 star’ (I believe gas energy labelling is an Australian industry-led scheme). With respect to space heating, I’m not sure exactly what star rating it is, but our report (p79) says “The 2012 EnergyConsult report showed that the sales were clustered around 25MJ-30MJ gas wall furnaces with 67%-70% efficiency.”

      Nathan, space heating demand is of necessity modelled. Have a look at our report – Section 7. It addresses most of your questions. We also did supplementary research into the carbon emissions of a household choosing gas or efficient electric appliances.

      Colin, no we didn’t look at hydronic or geothermal. As an economic study, we just compared gas to the lower cost efficient electric alternatives.

  3. Did you measure the energy use in real life conditions or use the designers specs, because heat pump efficiency is extremely variable with outdoor climate and only in a few areas meet the expected efficiency. I would very much doubt that a heat pump in southern Victoria operating as a heater would provide the same level of operational efficiency (eg heat the room adequately in quick time), have the environmental benefits (eg scope 2 and 3 carbon emissions from gas in Victoria is markedly less than electricity) and even provide a greater energy efficiency than a well designed and installed gas heating system.

  4. Interesting article
    Did the study include underfloor hydronic heating with high efficiency condensing boilers ? Or Geothermal heat pumps ?
    That’s something I would like to see, can we do a study on these ?