Gas used to be the cheap and cheerful champion of Aussie homes. For decades, it was the gold standard for heating up your living room and cooking a stir-fry.
But things have changed. A lot.
With wholesale gas prices climbing and insanely efficient electric appliances hitting the market, the old "gas is cheaper" rule of thumb is officially dead. If you're building, renovating, or just tired of paying two daily supply charges, going all-electric is now the smartest move for your wallet.
We've crunched the numbers to help you figure out the exact energy mix for your home, without the confusing jargon.
Technically, natural gas has a cheaper usage rate per unit than electricity. But that is only half the story.
To compare them fairly, you have to look at the energy equivalent. It takes 3.6 megajoules (MJ) of gas to equal 1 kilowatt-hour (kWh) of electricity.
Here is what the raw math looks like as of August 2026:
So, gas is cheaper, right? Wrong.
This math assumes gas and electric appliances are equally efficient. They aren't. Modern electric appliances, specifically reverse-cycle air conditioners and heat pump hot water systems are engineering marvels. They don't just generate heat; they move it around. This makes them up to 300% to 600% more efficient than gas appliances.
Because they use a fraction of the energy to do the same job, running efficient electric appliances is significantly cheaper overall than running gas ones.
When you have both gas and electricity connected to your home, you are hit with a daily supply charge for both.
A gas supply charge can cost anywhere from 22c to 85c a day. That is up to $310 a year you are paying just for the privilege of being connected to the gas main, before you even turn on the stove. Disconnecting your gas entirely instantly puts that money back in your pocket.
Let's take a look at the heavy hitters in your home and see how they stack up.
Reverse-cycle air conditioning is officially the cheapest way to heat a home in Australia. Because a heat pump extracts heat from the outside air, it produces three to five times more heat energy than the electrical energy it consumes. Gas ducted heating or space heaters simply cannot compete with that level of efficiency.
Heating water is usually the biggest energy drain in an Aussie household. A conventional electric storage tank is an absolute power hog. However, an electric heat pump water heater uses roughly 30% of the energy of a standard electric tank, making it much cheaper to run long-term than a gas hot water system.
We know, we know. Chefs love gas. But modern induction cooktops boil water faster, clean up easier, and don't leak indoor air pollution into your kitchen. They also cost less to run, saving you anywhere from $14 to $111 a year depending on where you live.
If your gas heater dies in the middle of winter, replacing it with another gas heater might be the cheapest fix for that afternoon. But if you play the long game, going electric wins hands down.
According to data from the Victorian Government in August 2026, a dual-fuel household that switches to all-electric can save an average of $1,900 a year on energy bills. Throw a decent rooftop solar system into the mix, and those savings jump to roughly $2,230 a year.
Depending on where you live, maybe not. Australia is rapidly phasing out residential gas to hit emission targets and lower household bills.
Here is what the gas ban landscape looks like across the country as of August 2026:
If you are building a new home, future-proofing it with an all-electric setup is a no-brainer.
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