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Gas vs electric: which appliance really costs less to run?

Hot water, heating, cooking — every household runs on one or the other. Pick your state, dial in your usage, and see the annual running costs side by side. No marketing spin, just the maths.

Updated · June 2026·Source: AEMO · AGL · Jemena · Sustainability Victoria·Read · 4 min

Your inputs

State — sets default electricity tariff
$/MJ
$/kWh

Default gas: $0.035/MJ (~$3.50/GJ, Australian mid-market). Electricity pre-filled from state averages.

Appliance usage

MJ/day
kWh/day

Inputs local. Nothing sent anywhere.

The result — Hot Water

Gas storage hot water saves · per year

$30

Gas storage hot water is cheaper at these tariffs

Gas storage hot water
$230
per year · 6,570 MJ
Heat pump hot water
$260
per year · 912.5 kWh

All appliances — side-by-side

ApplianceGas / yrElectric / yrCheaper
Hot Water$230$260Gas
Heating$378$385Gas
Cooking$115$125Gas
Total$723$770Gas saves $47

State electricity rates from AEMO 2025–26 standing offer averages. Gas tariff based on Australian Gas Networks and Jemena retail schedules. Benchmarks from Sustainability Victoria and the Australian Gas Networks efficiency guides.

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How to read the numbers

Gas is sold in megajoules (MJ) and electricity in kilowatt-hours (kWh). The running cost is simply usage × tariff. What makes the comparison tricky is that electric appliances — especially heat pumps — extract more usable heat per unit of energy than gas appliances.

A heat pump hot water system uses a refrigerant cycle to move heat from the air into the water. It delivers roughly 3 units of heat for every 1 unit of electricity consumed — a coefficient of performance (COP) of ~3. The 2.5 kWh/day default already reflects this real-world COP, compared to the 18 MJ/day a gas storage heater consumes.

Reverse-cycle A/C (split system or ducted) works the same way for heating. A typical system achieves a COP of 3.5–5 in mild conditions — dramatically outperforming gas heating, which loses 15–20% of its energy up the flue. The 15 kWh/day default reflects a medium-sized ducted system for a 4-bedroom home running on a cool day.

For cooking, the efficiency gap is smaller. Gas hobs are around 40–55% efficient (much of the heat escapes around the pot); induction is 85–90% efficient. The 3 MJ/meal vs 0.4 kWh/meal defaults already reflect these efficiencies.

§ Letters & replies

Gas vs electric, answered.

Common questions about switching household appliances from gas to electric.

Is it cheaper to run a gas or electric hot water system?+ open

It depends on your state. A heat pump uses ~2.5 kWh/day vs ~18 MJ/day for gas storage. At ACT, NSW and QLD electricity tariffs, heat pumps are cheaper. In SA (high electricity, ~34.8¢/kWh), gas can still win on running cost — though rebates often tip the balance.

How much does it cost to run a gas stove vs induction cooktop?+ open

For a household cooking ~1,095 meals per year: gas costs roughly $100–$155 and induction roughly $90–$175 depending on tariffs. Induction is cheaper below about $0.29/kWh. The real win is speed and precision, not just cost.

Is reverse-cycle A/C cheaper than ducted gas heating?+ open

Usually yes — a reverse-cycle system achieves a COP of 3.5–5, meaning it delivers 3.5–5 kWh of heat per kWh consumed. At 15 kWh/day vs 120 MJ/day for gas, reverse-cycle is cheaper in most states below ~$0.31/kWh.

What is the typical gas tariff in Australia?+ open

The Australian mid-market retail gas price is around $0.035/MJ (~$3.50/GJ). SA is the most expensive at roughly $0.044/MJ; WA is lowest at about $0.028/MJ. Find your exact rate on your bill under 'usage charge'.

Should I factor in the cost of replacing appliances?+ open

Switching has upfront costs. A heat pump hot water system runs $2,000–$3,500 installed vs $800–$1,500 for gas storage. Government rebates (federal and state) can reduce that to near-parity. The payback period depends on the running-cost saving — use the inputs above to calculate yours.