The cheapest way to heat your home this winter — honestly ranked.
It's July, the bills are landing, and every heating ad claims its box is the answer. Here's the honest version: on government running-cost figures, reverse-cycle wins for most homes — but the cheapest heating upgrade this winter is usually a $20 roll of draught tape, a working ducted gas system isn't always worth ripping out mid-season, and the middle of winter is exactly when pressure sellers hunt. We sell heaters, and we'll still tell you the free fixes come first.
Reviewed by the Mission Green Energy Team · Updated July 2026
What's actually cheapest
this winter?
For most homes: seal the draughts, close the doors, and run the reverse-cycle you probably already own. If you're choosing a heater, reverse-cycle wins on running cost. If yours works — gas or electric — the best value this July is almost never a new appliance.
Here's the frame the ads skip. Heating and cooling account for 20% to 50% of the energy used in Australian homes depending on climate zone (source: energy.gov.au, accessed July 2026) — so winter is where bills are won and lost. But the ranking of what to run matters less than most people think, because the biggest lever isn't the appliance at all: it's how much heat your house leaks and how much of it you're heating.
So this guide does both, honestly. First the appliance ranking, with government running-cost figures and their assumptions attached. Then the free-and-cheap fixes that beat any appliance upgrade per dollar. Then the caveats a heater seller won't volunteer: when a working ducted gas system should stay, when a $40 resistive heater is genuinely the right tool, why solar only helps if you're home in daylight — and why panic-buying a heat pump in July from a doorknocker is how you overpay.
Heating types, ranked by
cost to run — with sources.
Efficiency is physics, not marketing. A reverse-cycle unit moves heat instead of making it, so it delivers several units of heat per unit of electricity. Every resistive heater delivers exactly one.
1. Reverse-cycle air conditioning — cheapest to run for most homes. Reverse-cycle units on the Australian market are 300% to 600% efficient — three to six units of heat per unit of electricity — because they transfer heat from outside air rather than generating it (source: energy.gov.au, accessed July 2026). Non-ducted split systems are the most efficient option of all, since nothing is lost pushing air through ducts.
2. Gas heating — mid-field, and no longer the cheap option it once was. Flued gas heaters and ducted gas systems lose heat through the flue and ducts, and gas prices have eroded their old running-cost advantage. Efficient gas still beats resistive electric, but not reverse-cycle.
3. Resistive electric — most expensive for whole rooms over long hours. Panel, fan, oil-column and radiant heaters are all exactly 100% efficient: one unit of electricity in, one unit of heat out, regardless of price tag (source: energy.gov.au). A $300 designer panel heats no more efficiently than a $30 fan heater.
What that means in dollars, per Sustainability Victoria's heating running-cost guidance (Victorian Government; figures updated 23 July 2025, modelled on a pre-2005 Melbourne home heated to 20°C, accessed July 2026):
- Small room (12 m²), annual running cost: reverse-cycle split (3.5-star) about $69 · gas space heater (4.5-star) about $245 · electric panel heater about $344.
- Large room (60 m²): reverse-cycle (3-star) about $382 · gas heater (4.5-star) about $1,059 · electric panel about $1,720.
- Whole small house (100 m²), central heating: multi-split reverse-cycle about $513 · gas hydronic about $1,288 · 6-star ducted gas about $1,540.
The honest caveats on those numbers: they're modelled estimates at mid-2025 Victorian energy prices, not quotes — your tariff, climate zone, insulation and habits will move them, and a colder climate or a leakier house widens every gap. For a deeper head-to-head on the gas question specifically, see our guide to reverse-cycle vs gas heating running costs.
The fixes that beat every
heater upgrade, per dollar.
No heater — not even the best reverse-cycle unit — outperforms stopping the heat leaving. These three cost between nothing and a hardware-store trip, and they're what energy.gov.au lists before any appliance advice.
Seal the draughts
Gap-seal doors and windows with weather strips, block unused chimneys, cover exhaust fans. Government guidance puts draught-sealing first on the list of ways to cut heating load (energy.gov.au) — it's a $20–$100 job most homes can do in an afternoon.
Zone: heat rooms, not hallways
Close doors and heat only the rooms you're in. Half the argument for ducted anything disappears if you're conditioning empty bedrooms all evening. A split system heating one living zone is the cheapest comfortable winter most households can have.
Mind the thermostat
Every extra degree of heating increases energy use by 5–10% (energy.gov.au). Set 18–20°C, wear the jumper, and switch off when you leave or sleep. This one habit is worth more than most appliance swaps.
Where the "just get a heat pump"
advice goes too far.
Reverse-cycle winning the running-cost table doesn't mean everyone should rip out what they have this week. Three honest exceptions the sales pitch skips.
A working ducted gas system
If your ducted gas is mid-life and running well, the running-cost saving from switching can take years to repay a whole-home changeover. The switch makes clear sense at end of life, when you're replacing something anyway — not necessarily mid-winter, mid-lifespan. Plan it; don't panic it.
Resistive heaters have a job
A small electric heater warming a bathroom for ten minutes or one person at a desk is cheap to run because the hours are short. That's the honest use-case. As the main heater for a living room all winter, it's the most expensive option on the government's numbers.
Solar helps if you're home
Winter heating peaks mornings and evenings — when solar output is low or zero. Home during the day? Pre-heating on your own generation genuinely cuts the grid share. Out until 6pm? Your heating runs on grid rates, solar or not. Start with whether solar stacks up for you at all.
Is gas heating being
banned? Not for your home.
Victoria's electrification rules are real — and routinely overstated by people selling replacements. Here's what actually applies, as at July 2026.
Under Victoria's Gas Substitution Roadmap building regulations (source: energy.vic.gov.au, as at July 2026):
- New homes: from 1 January 2027, new homes must be built all-electric and won't connect to the gas network.
- Gas hot water: from 1 March 2027, when a gas hot water system in an existing home reaches end of life, it must be replaced with an efficient electric one (with some exemptions, such as apartments on centralised systems). Note: that's hot water, not your heater.
- Rentals: from 1 March 2027, rental properties must replace heating or hot water systems that fail beyond repair with efficient electric options, alongside new rental minimum standards for insulation and draught-proofing.
- Owner-occupiers' existing heaters and cooktops: no change. There is currently no requirement to replace a working gas heater or cooktop in an existing owner-occupied home — and like-for-like replacement remains allowed.
So if a salesperson tells you your working gas heater "is about to be illegal", that's a misrepresentation of the rules — walk away. What is true: the policy direction is one-way, Victorian Energy Upgrades offers point-of-sale discounts on efficient reverse-cycle replacements (amounts vary by product and provider — check energy.vic.gov.au), and planning your eventual switch on your own timetable is smarter than having it forced on you by a dead heater in July. Other states have their own settings — check your state's energy site rather than assuming Victoria's rules apply. If you're weighing up going all-electric across the board, our electrification page and honest guides cover the whole-home question.
Don't panic-buy a heat pump
in the middle of July.
Mid-winter is peak season for heating installers — and for pressure sellers. Cold house, urgent need, quote that "expires today". Recognise the setup.
The worst time to negotiate a heating changeover is when your house is cold. Installers are at peak demand, wait times stretch, discounting appetite shrinks — and the pressure-sales playbook comes out: the today-only price, the invented deadline, the "gas ban" scare, the doorknocker who happens to have a team in your suburb this week. These are the same tactics we document in our guide to solar and battery sales scams and red flags — winter just changes the product being pushed.
The honest sequence instead:
- Heater still works? Do the free fixes now, run what you own, and plan any changeover for the warmer months when quotes are keener and you're not deciding under duress.
- Heater actually died? You still control the process. Get at least two quotes even under time pressure, check the installer's credentials and reviews, and in Victoria confirm what Victorian Energy Upgrades discounts apply before accepting any on-the-spot-only price.
- Never sign because of a countdown. A genuine quote survives a week of thinking. Rebates and discounts don't vanish at the end of a sales visit.
So what should you
actually do this winter?
The call we'd give a friend, in order — including the part where we tell you not to buy anything from us yet.
First, spend a weekend, not thousands: seal draughts, close doors, heat only occupied rooms, set 18–20°C. Second, run the most efficient heater you already own — for most homes that's the reverse-cycle unit on the wall, even if you bought it for summer. Third, if a heater must be replaced, reverse-cycle is the running-cost winner on the government's numbers, and end-of-life is the natural moment to switch a gas system — see our air conditioning page for what we install, and browse all our honest guides for the surrounding decisions. What we'd urge against is ripping out working equipment mid-winter because a salesperson dressed policy up as panic. Full disclosure: Mission Green sells and installs reverse-cycle systems and heat pumps — which is exactly why you should hold us to the advice above. The free fixes come first, and "not yet" is a recommendation we make often.
Winter heating costs
— your questions, answered.
On government figures, a reverse-cycle air conditioner is the cheapest way to heat for most Australian homes. Reverse-cycle units on the Australian market are 300 to 600 per cent efficient because they move heat rather than generate it, while every plug-in electric resistance heater is exactly 100 per cent efficient — one unit of electricity in, one unit of heat out. Sustainability Victoria's running-cost modelling (updated July 2025) for a Melbourne-climate home puts a 3.5-star reverse-cycle unit at about $69 a year to heat a small room, against about $245 for a 4.5-star gas heater and about $344 for an electric panel heater, and the gap widens in larger spaces. Your actual costs depend on your tariff, climate and home, so treat these as indicative comparisons, not promises. And the honest first step is not an appliance at all: draught-sealing, closing off unused rooms and easing the thermostat down beat any heater upgrade per dollar spent.
Often not straight away — and July is usually the worst-value time to make the call. Reverse-cycle is cheaper to run, but a whole-home ducted-gas-to-reverse-cycle changeover is a significant installation, and if your gas system is mid-life and running well, the running-cost saving alone can take years to repay the changeover cost. The economics are strongest when the gas unit is at or near end of life and you were replacing something anyway. If your ducted gas dies mid-winter you will need to decide quickly — get more than one quote even then. If it still works, plan the switch for the warmer months, when installers are quieter and you are not negotiating from a cold house. Victorian rentals are the exception to watch: from 1 March 2027, a rental heater that fails beyond repair must be replaced with an efficient electric system.
For whole rooms over long hours, yes. For one person, a small space or a short burst, they are fine — and often the sensible choice. Every resistive electric heater, whether it is a $30 fan heater or a $300 designer panel, converts one unit of electricity into one unit of heat: 100 per cent efficient, no more and no less, per energy.gov.au. Sustainability Victoria's modelling puts an electric panel heater at roughly five times the annual running cost of an efficient reverse-cycle unit heating the same small room. But that comparison assumes hours of use every day: warming a bathroom for ten minutes or your feet under a desk for an hour costs little on any heater. The mistake is not owning one — it is using one as the main heater for a living room all winter.
No — solar only offsets heating you run while the sun is up. Winter heating demand peaks in the mornings and evenings, exactly when solar output is low or zero, and winter days are the year's weakest for generation. If someone is home during the day, running a reverse-cycle unit through the middle of the day on your own solar — and letting the house coast into the evening — genuinely cuts the grid-supplied share of your heating. If the house is empty until 6pm, most of your heating will run on grid power at whatever your tariff charges, solar or not. A battery changes the equation, but that is a separate purchase with its own economics. Be wary of any pitch that bundles solar and heating into one unconditional savings number.
No. As at July 2026, Victoria's building electrification rules work like this: from 1 January 2027, new homes must be built all-electric and cannot connect to the gas network; from 1 March 2027, a gas hot water system that reaches end of life in an existing home must be replaced with an electric one, with some exemptions; and from 1 March 2027, rental properties must replace heating or hot water systems that fail beyond repair with efficient electric options. For owner-occupiers, there is no requirement to replace an existing gas heater or cooktop — you can keep running them, and current rules still allow like-for-like replacement. Any salesperson implying your working gas heater is about to become illegal is misrepresenting the rules. Check the current settings at energy.vic.gov.au before making decisions based on policy claims.
Only if yours has actually died. Mid-winter is peak demand for heating installers, which means longer waits, less appetite to discount, and fertile ground for pressure sellers — the same urgency tactics we document in our solar and battery scams guide turn up in July heat-pump pitches. If your heater works, the cheap moves this winter are draught-sealing, zoning and thermostat discipline; plan any changeover for the warmer months and get multiple quotes. If your heater is genuinely dead, you still control the decision: get at least two quotes, check the installer and the product, and in Victoria check what Victorian Energy Upgrades discounts apply before accepting any on-the-spot-only price. Full disclosure: Mission Green sells and installs reverse-cycle systems — and our honest advice is still that the free fixes come first.
Where these figures come from.
Efficiency, running-cost and policy claims on this page are drawn from official primary sources and were current as at July 2026. Energy prices and regulations change — confirm at the source before relying on a figure.
- energy.gov.au — Heating and cooling (reverse-cycle 300–600% efficiency; resistive heaters 100%; 20–50% of household energy; 5–10% per degree; draught-sealing and gas-heater ventilation guidance)
- Sustainability Victoria — Calculate heating running costs (annual cost comparisons by heater type and room size; figures updated 23 July 2025)
- energy.vic.gov.au — Electrification and efficiency standards for Victorian buildings (new-home all-electric from 1 Jan 2027; hot water end-of-life rule and rental standards from 1 March 2027)
- energy.vic.gov.au — Victorian Energy Upgrades heating and cooling discounts (current eligible products and providers)