Calculate heating running costs
This page provides approximate annual energy costs and 10-year greenhouse gas emissions for a range of types and sizes of common heating systems.
These should be used as a guide only. Actual energy costs will depend on:
- the area of your home being heated
- how well insulated your house is
- your thermostat settings
- the amount of time the heating is run for each day
- your local climate
- your energy tariffs.
The energy costs and emissions are based on an average pre-2005 existing house in a Melbourne climate.
To estimate the annual energy costs for a cold climate, such as Ballarat, multiply these figures by 1.5. For a warm climate, such as Mildura, multiply these figures by 0.8.
To estimate the annual energy cost for a 5-star house in a Melbourne climate multiply these figures by 0.4. For a 6-Star house multiply these figures by 0.3.
The calculations for slow combustion wood heaters only include greenhouse gas emissions. Wood heaters can also produce smoke pollution.
Read EPA’s advice on reducing wood smoke pollution.
Please note:
- Figures were last updated in August 2024.
- The star ratings for the reverse-cycle air conditioners are based on the new (post April 2020) zoned energy rating labels.
Annual energy costs of central heating 2025 graph
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The figures in the graph and the tables are approximate annual energy costs for operating the different heating options. They’re based on an average existing pre-2005 house in a Melbourne climate, heating to 20°C.
The calculations are based on current default offer electricity and natural gas tariffs in Melbourne. An electricity tariff of 29.2c/kWh (peak) and 21.3/kWh (off peak). Natural gas tariffs are based on the standing offer of a major metropolitan gas retailer using a typical "declining block" structure for a house with gas heating, water heating and cooking, which means the more gas that is used during each billing period (e.g. the larger the area being heated), the cheaper the unit cost of the gas.
Natural gas tariffs used for central heating are:
- 100m² to 3.67 c/MJ
- 160m² to 3.41 c/MJ
- 220m² to 3.26 c/MJ.
Natural gas tariffs used for room heating are:
- 12m² to 4.66 c/MJ
- 30m² to 4.40 c/MJ
- 60m² to 4.01 c/MJ
The electricity and gas tariffs do not include any pay on time discount or any fixed supply charges.
LPG costs are based on a winter rate for a 45 kg gas bottle in Melbourne (7.07 c/MJ) and wood (2.9 c/MJ) is based on the cost per tonne of supplying Australian hardwood in Melbourne.
10-year greenhouse gas emissions are based on the estimated average emission coefficients of the different fuels over the next ten years:
- 0.440 kg CO2-e per kWh for electricity
- 0.05553 kg CO2-e per MJ for natural gas
- 0.0642 kg CO2-e per MJ for LPG
- 0.005 kg CO2-e per MJ for plantation-grown bulk firewood.
Home heating running costs update
Figures have been updated to reflect the energy prices in mid-2025. Compared to the last update (August 2024), electricity prices have decreased slightly, while the price of natural gas and LPG have increased. The price of wood as remained about the same. The 10-year emission coefficient for electricity has decreased slightly due to the increasing share of renewables for electricity generation.
Central heating – small house 100m²
| Heater type | Efficiency rating | Annual energy cost | 10-year GHG emissions (tonnes) |
|---|---|---|---|
| Multi-split reverse-cycle air conditioner | 1.5 star | $769 | 11.6 |
| 2.5 star | $513 | 7.7 | |
| Ducted reverse-cycle air conditioner (unzoned) | 1 star | $1,153 | 17.4 |
| 2.5 star | $721 | 10.8 | |
| Gas ducted (unzoned) | 3 star | $1,961 | 29.6 |
| 4 star | $1,754 | 26.5 | |
| 6 star | $1,540 | 23.3 | |
| Gas hydronic (unzoned) | European C rating (84%) | $1,411 | 21.3 |
| European A rating (92%) | $1,288 | 19.5 | |
| Electric in-slab (unzoned) | No ratings | $2,104 | 43.4 |
| Slow combustion wood heater (with heat shifter) | 60% | $1,812 | 4.4 |
Central heating – medium house 160m²
| Heater type | Efficiency rating | Annual energy cost | 10-year GHG emissions (tonnes) |
|---|---|---|---|
| Multi-split reverse-cycle air conditioner | 1.5 star | $1,230 | 18.5 |
| 2.5 star | $923 | 13.9 | |
| Ducted reverse-cycle air conditioner (unzoned) | 1 star | $1,846 | 27.8 |
| 2-star | $1,318 | 19.8 | |
| Gas ducted (unzoned) | 3 star | $2,921 | 47.4 |
| 4 star | $2,615 | 42.4 | |
| 6 star | $2,299 | 37.2 | |
| Gas hydronic (unzoned) | European C rating (84%) | $2,097 | 34.1 |
| European A rating (92%) | $1,915 | 31.1 | |
| Electric in-slab (unzoned) | No ratings | $3,366 | 69.4 |
| Slow combustion wood heater (with heat shifter) | 60% | $2,899 | 7.0 |
Central heating – large house 220m²
| Heater type | Efficiency rating | Annual energy cost | 10-year GHG emissions (tonnes) |
|---|---|---|---|
| Multi-split reverse-cycle air conditioner | 1.5 star | $1,692 | 25.5 |
| 2.5 star | $1,269 | 19.1 | |
| Ducted reverse-cycle air conditioner (unzoned) | 1 star | $2,538 | 38.2 |
| 2 star | $1,813 | 27.3 | |
| Gas ducted (unzoned) | 3 star | $3,853 | 65.2 |
| 4 star | $3,451 | 58.3 | |
| 6 star | $3,036 | 51.2 | |
| Gas hydronic (unzoned) | European C rating (84%) | $2,762 | 46.9 |
| European A rating (92%) | $2,522 | 42.8 | |
| Electric in-slab (unzoned) | No ratings | $4,629 | 95.5 |
| Slow combustion wood heater (with heat shifter) | 60% | $3,986 | 9.7 |
Room heating – small room 12m²
| Heater type | Efficiency rating | Annual energy cost | 10-year GHG emissions (tonnes) |
|---|---|---|---|
| Reverse-cycle air conditioner | 2 star | $98 | 1.5 |
| 3.5 star | $69 | 1.0 | |
| Electric panel, convection or fan heater | N/A | $344 | 5.2 |
| Gas heater (natural gas) | 3 star | $275 | 3.3 |
| 4.5 star | $245 | 2.9 | |
| Gas heater (LPG) | 3 star | $415 | 3.8 |
| 4.5 star | $369 | 3.4 |
Room heating – medium room 30m²
| Heater type | Efficiency rating | Annual energy cost | 10-year GHG emissions (tonnes) |
|---|---|---|---|
| Reverse-cycle air conditioner | 1.5 star | $287 | 4.3 |
| 3.0 star | $191 | 2.9 | |
| Electric panel, convection or fan heater | N/A | $860 | 12.9 |
| Gas heater (natural gas) | 3 star | $650 | 8.2 |
| 4.5 star | $579 | 7.3 | |
| Gas heater (LPG) | 3 star | $1,037 | 9.5 |
| 4.5 star | $924 | 8.4 |
Room heating – large room 60m²
| Heater type | Efficiency rating | Annual energy cost | 10-year GHG emissions (tonnes) |
|---|---|---|---|
| Reverse-cycle air conditioner | 1.5 star | $573 | 8.6 |
| 3.0 star | $382 | 5.8 | |
| Electric panel, convection or fan heater | N/A | $1,720 | 25.9 |
| Gas heater (natural gas) | 3 star | $1,190 | 16.5 |
| 4.5 star | $1,059 | 14.7 | |
| Gas heater (LPG) | 3 star | $2,075 | 19.0 |
| 4.5 star | $1,847 | 16.9 | |
| Slow combustion wood heater | 60% | $1,024 | 1.8 |
