A reverse-cycle air conditioner is the Cheapest heater to Run Australia-Wide, costing roughly $0.10 to $0.18 per hour for a standard living room. A fan heater doing the same job costs $0.60 per hour. Over a 90-day winter, at a few hours a day, that gap adds up to hundreds of dollars. This Electricity and Gas Comparison ranks your main heating options from cheapest to most expensive, with real running costs based on average Australian rates in 2026. All running cost estimates below are based on an average electricity rate of 30 to 33 c/kWh and a gas rate of 3.5 to 4.1 c/MJ. Your actual costs will depend on your state, your retailer, and your specific plan.
The Most Cost-Effective Ways to Heat Your Home This Winter
1. Reverse-Cycle Air Conditioner (Split System)
Running cost: ~$0.10 to $0.18 per hour
This is the clear winner. A reverse-cycle split system has a coefficient of performance (COP) of 3–5. That means for every 1 kWh of electricity it draws, it pushes out 3 to 5 kWh of heat. No other household heating option comes close to that ratio. A typical 2.5 kW split system heats a medium-sized room. It draws 600 to 800 watts while running, keeping the hourly cost well under 20 cents. The catch is the upfront price. A split system installed costs between $1,500 and $3,500, depending on the size and brand. If you already have one, use it. If you are thinking about buying a portable heater instead, the running cost difference over two or three winters will likely cover the installation cost of a split system.
Best for: Living rooms, open-plan areas, bedrooms. Any room you heat regularly.
2. Electric Blanket
Running cost: ~$0.02 to $0.05 per hour
If you are asking what the cheapest electric heating to run at night is, it is an electric blanket. A standard model draws 60–150 watts. That translates to 2 to 5 cents an hour. Over an entire winter season with nightly use, the total running cost ranges from $20 to $48. You can preheat your bed for 20 minutes, then switch the blanket to low or off once you get in. A good doona holds that warmth for hours. This lets you turn off your room heater at bedtime, which is where the real savings stack up.
Best for: Bedrooms, night-time warmth, and anyone trying to cut their heating bill fast.
3. Oil Column Heater
Running cost: ~$0.30 to $0.66 per hour
Most oil column heaters range from 1,000W to 2,200W. A 1,000W model costs around $0.30 per hour. A 2,200W model sits closer to $0.66. Oil heaters take longer to warm up and longer to cool down. That slow cool-down means you can switch them off earlier and still feel warmth from the fins for a while afterwards. They run quietly, which makes them a good pick for bedrooms. The wattage you choose matters more than the heater type. A 2,200W oil heater in a small bedroom is paying for heat you do not need. A 1,000W model does the job at half the hourly cost.
Best for: Bedrooms, studies, and overnight use where quiet operation matters.
4. Panel or Convection Heater
Running cost: ~$0.45 to $0.66 per hour
Panel heaters warm the air through convection. Most sit in the 1,500W to 2,200W range. A 2,000W panel heater and a 2,000W oil heater draw the same amount of electricity. The total energy used over a few hours is virtually identical at the same wattage. The real difference in running cost comes down to thermostat quality, not heater type. Panel heaters warm up faster and cool down faster than oil models. Smart panel heaters with scheduling features can cut actual usage by 25–40% by running only during the hours you set. Pairing a scheduled panel heater with a competitive off-peak rate makes a noticeable difference too. OVO Energy Plans include bill smoothing that spreads your winter costs evenly across the year, which helps if panel heater usage pushes your bills up between June and August.
Best for: Living rooms, home offices, spaces where you want the room heated evenly.
5. Fan Heater
Running cost: ~$0.30 to $0.66 per hour
Fan heaters are cheap to buy. You can pick one up for under $30 at Kmart or Bunnings. The running cost is another story. A cheaper fan heater running on “Low” usually draws 1,000W ($0.30 per hour), and “High” draws 2,000W ($0.60–$0.66 per hour). Fan heaters blast warm air quickly, which makes them useful for short bursts. They are a good option if you need to warm a bathroom for 10 minutes before a shower. They are an expensive option if you leave them running for hours. Most budget models lack a thermostat. That means they run at full power the entire time they are on. There is no cycling down, so you pay the maximum hourly cost for every minute of use.
Best for: Short bursts. Bathrooms. Small spaces where you need heat fast and will switch it off within 30 minutes.
6. Gas Heater (Portable or Ducted)
Running cost: ~$0.25 to $0.60+ per hour (portable), $600 to $960 per season (ducted)
A small, portable gas heater uses about 6 MJ/h on low and 13 MJ/h on high, costing about $0.25 to $0.53 per hour. Ducted gas systems cost $600 to $960 over a Melbourne winter. Gas heaters warm a room faster than most portable electric models. But an electricity and gas comparison on running costs shows that a reverse-cycle air conditioner does the same job for roughly half the price per season. There is also the gas daily supply charge to consider. If heating is the main reason you keep a gas connection, you are paying $219 to $328 per year in supply fees on top of your usage.
Best for: Homes already connected to gas with a working ducted system. Replacing a gas system with a reverse-cycle unit makes more financial sense when the gas unit reaches the end of its life.
Quick Comparison: Running Cost Per Hour
| Heating option | Typical wattage/input | Cost per hour
|
| Electric blanket | 60–150W | $0.02–$0.05 |
| Reverse-cycle split system | 600–800W input (2.5 kW output) | $0.10–$0.18 |
| Oil column heater (1,000W) | 1,000W | ~$0.30 |
| Panel heater | 1,500–2,200W | $0.45–$0.66 |
| Fan heater | 2,000W | ~$0.60 |
| Portable gas heater (high) | 13 MJ/h | ~$0.53 |
So, what is the cheapest electric heating to run for your home? A reverse-cycle split system is the cheapest for heating a room. An electric blanket is ideal for warming yourself in bed. Everything else costs noticeably more per hour.
A Few Things That Make Any Heater Cheaper to Run
These small changes apply regardless of which heater you use:
● Close doors and curtains
Keeping warm air in one room is much cheaper than heating an entire house. Curtains with a thermal backing make a real difference on cold windows.
● Use a timer
Set your heater to switch on 30 minutes before you get home, rather than leaving it running all day.
● Match the wattage to the room
A 2,200W heater in a 10 sqm bedroom is paying for heat that spills into the hallway. A 1,000W model does the job in that space at half the hourly cost.
● Check your energy plan
The cheapest heater to run Australia-wide still costs more than it should if you are on an expensive default tariff. OVO Energy plans include bill smoothing and a 3% interest reward when your account is in credit, which can help spread winter costs evenly across the year. A quick electricity and gas comparison takes a few minutes and could save you more than any heater swap.
Summary
Overall, choosing efficient appliances, using them only when needed, and improving insulation or switching energy plans can significantly reduce winter heating costs. Simple habits like heating only occupied rooms, sealing drafts, and managing thermostat settings can make a noticeable difference over time, helping households stay warmer while using less energy.
Frequently Asked Questions
Q: What is the cheapest heater to run in Australia?
A reverse-cycle air conditioner costs $0.10 to $0.18 per hour. For bedrooms at night, an electric blanket costs just 2 to 5 cents per hour.
Q: Are gas heaters cheaper to run than electric heaters?
A portable gas heater on high costs around $0.53 per hour. A reverse-cycle split system costs $0.10 to $0.18 for the same space. You also pay a daily gas supply charge of 60 to 90 cents just to stay connected.
Q: Is it cheaper to run one big heater or two small ones?
One correctly sized heater is almost always cheaper. Two smaller units running together draw more total wattage. Pick the right wattage for your room and let the thermostat do its job.
Q: How can I reduce my heating bill without buying a new heater?
Check your energy plan. OVO Energy plans and other competitive retailers often have lower rates than default standing offers. Seal gaps under doors, close curtains at dusk, and only heat the rooms you are using.