Air conditioning (or heat pumps in New Zealand) and gas heating are the main options for heating a home in Australia and New Zealand.
Gas heating is simple to use but has a low efficiency of around 60-70%, producing harmful carbon dioxide and water vapour when burned. Reverse-cycle air conditioning is more efficient, providing 3-3.5 kWh of heat for every 1 kWh of electricity and having an energy efficiency of 300-400%.
Air conditioning has a higher upfront cost, ranging from $2,000 to over $12,000, but lower running costs. In comparison, gas heating has a lower upfront cost but higher running costs, especially with increasing gas prices. However, air conditioning is often cheaper to run in the long term than gas heating.
Which one is cheaper to heat the home – gas heater or air conditioner?
When winter comes around, you’ll want to choose the most energy-efficient and cheapest way to heat your home. In Australia and New Zealand, the primary heating options are air conditioning (referred to as heat pumps in NZ) and gas heating.
Gas heating – an old favourite
Gas is relatively simple to heat with. Flammable natural gas enters your home, ignites within a heater ideally, and releases heat.
A gas heater will transfer all of the chemical energy in the gas into heat energy unless it is dangerously faulty. Gas heating appears to be 100 per cent efficient, as all the gas seems to be burned, but this is not the practice case.
The efficiency of natural gas heaters is typically around 60 – 70%. Furthermore, methane makes up a significant part of natural gas. When this is burned, carbon dioxide and water vapours are released. The CO2 produced by a non-flued gas heater can also harm your health.
A failing gas heater can produce carbon monoxide, which your body can’t detect and can cause injury or death. Therefore, experts recommend regularly maintaining gas heaters. Prefer flued models over non-flued ones and avoid using them in bedrooms.
With the most recent gas price hikes and with many predictions saying that the price of natural gas will continue to increase over the following years, now would be a good time to move away from gas heating and identify the best option for your house to keep energy bills to a minimum.
Air conditioners do heating and cooling
An air conditioner can be designed to either heat your home or heat and cool your home. This occurs by extracting air from outside the house and then heating or cooling the room. So its functionality trumps gas straight away.
A gas heater combines gas fuel and radiant heat to warm the air. An air conditioner heats the room by extracting air from the outside, while a gas heater warms your space by creating heat energy inside.
Fans of reverse-cycle air conditioners claim it is the most efficient way to heat your home. Claims suggest that new air conditioning units can cut your heating expenses by over half, contingent on your location and the efficiency of the air conditioner.
Because air conditioners also use energy to circulate heat around rather than only generate it, they are significantly more efficient at heating than gas heaters. Consequently, even the most inefficient air conditioner is still several times more power-saving than a gas-powered unit.
Even the most inefficient air conditioner will provide roughly 3 – 3.5 kilowatt-hours of warmth for every kilowatt-hour of electricity usage, resulting in a high energy efficiency of around 300 – 400%, up to four times more than that of a conventional gas heater.
So which is more expensive to run – the air conditioner or gas heater?
The majority of people seem to think that air conditioners are more expensive to use than gas heating. However, with the current increasing gas prices, it may be that gas heating is more costly, so let’s explore.
Air conditioners have a higher upfront cost, with options ranging from $2,000 to over $12,000 for units fully installed, depending on their size and technology. While a single 2.5kW unit is at the bottom of the price range, a fully ducted unit for the whole house can cost a 5-figure sum. In contrast, the gas heater has a much lower upfront cost, ranging from $800 to $1,200 for a top-of-the-range unit.
Many of you might interpret these numbers and immediately conclude that the air conditioner holds higher long-term expenses. However, this assessment only reflects the initial purchase cost and doesn’t factor in the long-term running costs.
Also, the price quoted for the gas heater is for a single living room, not the whole house, while the ducted air-conditioning top-of-the-range quote is for the entire house. Also, one assumes in the quoted price that the plumbing for the gas heater is already in place.
So maybe a more realistic comparison is a single room purchase for the units being $1200 for a modern programmable gas unit vs $2200 for the air conditioning unit.
What about the ongoing running costs?
Let’s give a rough number in cents. A typical gas heater will cost roughly 30 – 40 cents per hour to run a small 2.6kW gas heater. This is much higher than the average reverse cycle air conditioner for a room which costs 15 – 18 cents per hour to run at the same heating capacity as the gas heater.
If we have heating needs for 6 hours per day on 100 days a year, then the 600 hours of heating cost approximately $108 with the air con and roughly $240 with the gas. If we now have to heat several areas of the house, the difference in running costs could easily be $600 to $800 more for gas per season.
This means the initial purchase savings for the gas appliance will have evaporated after only a few short years.
Air conditioners trump gas heaters in cost-effectiveness due to their ability to retain heat. While gas heaters might rapidly warm a particular area, an air conditioning system can sustain a comfortable temperature with low energy consumption. It operates by running only when necessary to top up the temperature.
On the other hand, a gas heater will, in many cases, just power along and be less energy efficient. This means with the air-con, less energy is being paid for that is going to waste.
Therefore the verdict is – that although gas heaters may be cheaper to purchase initially, air conditioners will save you more money in the long run.
Furthermore, gas heating requires a lot more energy to heat an entire room than air conditioners, and with rising gas prices, one can only assume that your gas bills will significantly increase in future years.
Of course, suppose one uses solar power to run the air conditioner during the day or has a solar battery to power it at night. In that case, the running cost will be even lower again, an option not available for gas heating.
Environmental benefits need to be counted as well
As our electricity grid is moving more and more toward renewable energy, the electricity to power the air conditioning will most likely be renewable in a few short years. Burning gas, on the other hand, will contribute to climate change, so on the environmental score, gas only gets the 2nd price.