Based on our research, the cheapest way to heat your home is to use a reverse cycle air conditioner
Electric heaters have a lower daily running cost of $2.44. For gas heaters it is $2.90 per day based on 4 hours running time.
Given energy prices are set to rise on 1 July 2023, it is important to understand which heaters will not end up being power guzzlers
How much does it cost to run a heater in winter 2023?
We looked at a 100 heaters in total to find out it would cost an average of $228 to heat your home this winter.
This includes 8 different types of electric heaters and 2 types of gas heaters.
Heater cost in winter
$228
COST/HOUSEHOLD
$2.54
DAILY COST
Your actual costs may be smaller or larger depending on a variety of factors, including:
How often you use your heater
The actual price you pay for electricity or gas from you provider
How many heaters you choose to run
Level of insulation in your home
Climate where you live
We compared over 100 heating units across 10 categories that are currently rated as 4.5 stars or better by their customers.
We sourced the kWh and MJ from a number of retailers, only choosing products that were highly rated by consumers. We multiplied these numbers by the median market usage rate (from the Australian Energy Regulator (AER) Annual Retail Markets Report 2021–22) for electricity and gas to get an hourly running cost.
Finally, to calculate our "winter running cost", we took the hourly cost and multiplied it by 4 hours of use every day for 90 days of winter.
Electric heaters details
Heater type
Average hourly usage (kW/h)
Hourly running cost
Winter running cost (4 hours per day)
Convection Heater
2.0
$0.58
$208
Fan heater
1.9
$0.54
$194
Oil-filled column heater
2.1
$0.60
$215
Panel heater
1.7
$0.49
$178
Radiant bar heater
2.1
$0.59
$214
Radiant Convection
2.6
$0.76
$272
Reverse cycle air conditioner
1.2
$0.35
$127
Tower heater
3.4
$0.98
$354
Gas heaters details
Heater type
Average hourly usage (MJ/h)
Hourly running cost
Winter running cost (4 hours per day)
Convection Heater
17.2
$0.69
$248
Radiant convection heater
19
$0.76
$274
Costs are an estimate only. Your actual running costs may be different. They can be affected by multiple factors including actual usage, level of insulation in your home, climate and prices.
What type of heater is the cheapest to run?
According to our calculations, reverse cycle air conditioners are the cheapest way to stay warm this winter. Our figures are based on running a heater for 4 hours a day.
Based on the 10 models we analysed, the average running cost per day is $1.41 or $127 for the winter period.
Just keep in mind that running costs will increase depending on how big your air con is and the size of the room you're heating.
Upfront costs are also high if you don't already have one installed. However, they can significantly save you money in the long run.
Alternatively, here are some other options to consider:
Panel heaters are the second cheapest type of electric heater to run, costing $1.97 per day. The average daily cost of electric heaters is $2.06.
Convection heaters are the cheapest type of gas heater to run, costing $2.76 per day. The average daily cost of gas heaters is $2.90.
Costs are an estimate only. Your actual running costs may be different. They can be affected by multiple factors including actual usage, level of insulation in your home, climate and prices.
Which type of heater is the most energy-efficient?
Reverse-cycle air conditioners are both the cheapest and most energy-efficient way to heat your home.
This comes down to the way they work. We won't get into the technicalities but it boils down to this:
While other electric and gas heaters have to use energy to "make" heat, a reverse-cycle system actually "takes" heat from outside of your home and releases it to warm a room. Isn't science wonderful?
Reverse-cycle air conditioners are able to generate 3 or more kilowatts (kW) of heating per 1kW of electricity consumed.
If you're not looking to install a reverse-cycle air conditioner, you can still look at the individual efficiency ratings of other appliances and choose the one with the highest energy rating.
Warming in winter, cooling in summer. Because a reverse-cycle air conditioner can perform both functions, you no longer have to worry about swapping over appliances each season or storing the unused appliance.
Cleaner air. Some air conditioners have purification features and filter the air, removing pollutants and dust as air passes through them.
Less noise. Compared to traditional eclectic or gas heaters, some reverse-cycle air conditioners make a lot less noise.
Cheapest form of heating to run. Compared to all types of electric portable heaters and gas heaters reverse cycle air conditioners are far cheaper.
What are the differences between electric and gas heaters?
There are many variables at play when considering if electric heating is cheaper or more expensive than gas.
Feature
Electric heater
Gas heater
Operation
Uses electricity to heat up elements.
Uses combustion of gas to heat up elements.
Installation cost
Cheap – often heaters are "plug and play" with no installation. Installation of reverse-cycle air conditioners can be between $600 and $750.
Expensive – often starts from $1,200 all the way to $5,000 depending on the number of fittings.
Running costs
Expensive – electricity rates are much higher than gas.
Cheaper, but requires more gas for the same amount of heat.
Safety concerns
Electrocution, electrical fires.
Carbon monoxide fumes (requires ventilation).
Environmental impact
Sustainable if your home is powered by solar. The majority of Australian homes are powered by burning fossil fuels.
Okay – gas heaters produce around 80% fewer emissions than electric heaters.
How else can I reduce my winter energy bills?
Finder's Cost of Living report shows rising energy costs are causing Aussies the 4th most stress, after groceries, rent/mortgage and petrol.
Besides looking for a cheaper, and more energy efficient heater type, consider:
Switching energy providers. There's probably a better offer out there especially if you haven't switched energy plans in over 12 months. Consider providers that are offering electricity and gas deals, including sign up credit.
Using electric blankets. When it comes to staying warm, an electric blanket is actually the cheapest option according to our analysis, costing just 14 cents a day to run.
Switch things off. When you turn an appliance off, it's still using power in standby mode. It might not be much but the cost can quickly add up. Make sure to turn off electric devices at the power point. It's a small habit change that could save you $100 a year.
Keep an eye out for government incentives. With the rising cost of living, various states are offering reductions on your power bill via government subsidies. Keep an eye out for what you might be entitled to via your state government's website.
Government rebates
A few states and territories have rebates in place to help with the cost of upgrading your existing appliances.
The ACT runs the Wood Heater Replacement Program to replace wood heaters or fireplaces with energy-efficient reverse-cyle air conditioners.
Victoria has the Home Heating and Cooling Upgrades Program with a $1,000 rebate towards the cost of buying and installing energy-efficient heating and cooling systems for each household.
You can see the full list of rebates available on the government website.
Add extra insulation to your home. Finder's Consumer Sentiment Tracker shows that only 13% of Australians think their home is sufficiently insulated. Insulation is another upfront cost like solar but can help keep your energy bill down year-round.
According to YourHome, 25–35% of the heat of your home is lost via the ceiling in winter (the same amount of heat is gained in summer). Adding extra insulation can keep the heat in winter and out in summer. HiPages estimates installing insulation could cost between $2,500 and $4,500 but it depends on the size of your home and choice of materials.
Why you can trust Finder's energy experts
We've done the work
We've reviewed hundreds of energy plans and written 200+ guides to help you navigate the Aussie energy market. Our experts are seen on TV, print and digital media.
In the last 3 years, we've helped over 1.39 million people compare energy plans by explaining features clearly and simplifying confusing terms and conditions.
Learn more about energy
Our energy guides can help you compare and understand what plan is best for you.
Best energy plans:
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Solar power plans:
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Average energy bill:
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Frequently asked questions
While the exact cost of running your heater depends on what you pay for energy, you can get a rough idea of the cost based on the wattage or megajoules. Here we have calculated the hourly cost of running a heater (by wattage or megajoules) based on the median energy price.
Electric blankets are much cheaper than heaters, though an obvious drawback of only heating your bed or having a blanket that you walk around with.
Based on our comparison of 10 electric blankets, we found the total winter running cost to be $13 on average. That's significantly cheaper than the winter running cost of the heaters we compared which ranged between $127 and $354.
Calculating your heater's running cost is simple and the first step before shopping around for a cheaper one. 1. Find the label that describes the input power in MJ for gas or kW for electricity. 2. Check your power bill for the usage rate you're paying for your gas or electricity. 3. Multiply the input power by the usage rate to find your running cost per hour.
What if I want to know the cost for the whole of winter? To calculate an estimate of how much you'll pay to run your heater over the whole of winter, just take your formula a few steps further.
4. Take the running cost per hour and multiply it by the number of hours you think you'll use the heater each day. 5. Multiply that figure by 90 (the number of days in winter) to get your total winter running cost.
Your total winter cost all up will be higher or lower depending on if you bought a new heater or already had one. Simply add your retail price and your total winter running cost and you'll have your full heating and appliance cost figured out.
There are broadly 3 types of heaters available:
Gas heaters
Gas heaters are typically capable of heating a room faster than an electric heater. They come in 2 types: convection and radiant convection.
Convection gas heaters draw in cold air and heat it via a gas-powered element which is then released back into a room. Radiant convection heaters have an element that is slightly exposed, providing more focused heating. Due to the risk of carbon monoxide, Australian laws require some gas heaters to have a flue to vent any emissions. This makes them less portable.
Portable electric heaters
There's a greater variety of electric heaters and unlike gas heaters, they tend to be highly portable. Convection and panel electric heaters work similarly to gas heatings drawing in cold air, heating it via an element and dispersing it back into the room.
Oil-filled column heaters use electricity to heat oil inside a column which slowly heats the room. They can heat the room slower than other heaters.
Fan heaters blow hot air at a single location while tower heaters are similar but typically oscillate, spreading hot air around the room in an arc.
Reverse-cycle air conditioners
Reverse-cycle air conditioners can be a good investment as they can heat in winter and cool in summer. They may have different energy efficiency ratings for heating and cooling and will typically use more power to heat than cool.
Cameron Micallef was a utilities writer for Finder. He previously worked on titles including Smart Property Investment, nestegg and Investor Daily, reporting across superannuation, property and investments. Cameron has a Bachelor of Communication and Media Studies/ Commerce from the University of Wollongong. Outside of work Cameron is passionate about all things sports and travel.
Most Western Australia residents can't switch electricity providers but have a few options when it comes to gas. Find out if you can switch energy retailers.
Energy prices are expected to rise by up to 29% in QLD on 1 July 2023., but there's plenty of electricity and gas providers to choose from and potentially save money on your energy bills.
Residents of the ACT have several electricity and gas providers to choose from.
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