If you’re heading into another Sydney winter wondering whether to fire up the gas heater or run the reverse cycle, the answer in 2026 has shifted hard in one direction. With NSW gas prices climbing and electricity rates relatively stable, reverse cycle air conditioning is now the cheapest mainstream way to heat a home in Sydney.

Here’s how the numbers stack up, and what it means for your power bill this winter.

The short answer

For most Sydney homes in 2026, a modern reverse cycle air conditioner costs less per hour to run than gas heating. The savings range from $250 to $400 a year for the average home, and more for households that run heating heavily.

The Climate Council’s Switch & Save report found that fully electric homes save between $500 and $1,900 per year on energy bills compared to homes still running gas appliances. That’s not a sales pitch. That’s an independent body looking at real bills.

The cost per hour

Modern reverse cycle systems cost around $0.13 to $0.36 per hour to run in heating mode, depending on the size of the unit and the room being heated. A standard gas heater runs at $0.42 to $0.82 per hour for the same heat output. The gap is roughly two to three times.

The reason comes down to one technical concept called COP, or Coefficient of Performance. A gas heater turns one unit of energy into roughly 0.8 to 0.9 units of heat. A reverse cycle air conditioner moves heat from outside to inside using refrigerant, which lets it produce 3 to 5 units of heat for every single unit of electricity it uses.

So even though electricity costs more per unit than gas in NSW, you need a lot less of it.

Why this matters more in Western Sydney

Western Sydney winters are colder than people give them credit for. Liverpool gets around 4 nights a year below 2°C, and out toward Richmond and Penrith you’re looking at 17 to 38 nights at or below freezing. That’s a lot of heating hours over a season, and that’s where the running cost gap really adds up.

A home in Prestons, Liverpool or Penrith running a gas heater for 6 to 8 hours a night through June, July and August can easily push past $400 in heating costs alone. The same home with a reverse cycle system might come in at $150 to $200 over the same period.

“We see it all the time. A family will switch from a gas heater to reverse cycle and call us in August telling us their power bill barely moved compared to what they were spending on gas. The system pays for itself within a few winters, and that’s before you factor in summer cooling.”

Helal, Crown Air

When gas might still make sense

If you’ve already got a paid-off gas heating system that’s working fine, ripping it out tomorrow probably isn’t the move. Gas heaters do warm a room faster from cold, and they hold their efficiency in low temperatures the way some older reverse cycle units can’t.

But if your gas heater is on its last legs, or you don’t have one yet, reverse cycle is the smarter long-term play. You get heating in winter, cooling in summer, and one system to maintain instead of two.

The other benefit you can’t put a number on

Reverse cycle systems double as your summer cooling. Western Sydney summers regularly push past 40°C, with Penrith hitting a national record of 48.9°C in January 2020. The same unit that’s keeping you warm in July is the one keeping you cool in January. With a gas heater, you’re paying for two separate systems to do two separate jobs.

Get the numbers for your home

Every home is different. The right system depends on your insulation, ceiling height, room layout, and how many hours a day you actually run heating. Our team can run the numbers on what a reverse cycle system would cost to install and what you’d save compared to your current setup.

Get a free quote for reverse cycle air conditioning at your Sydney home.