If you’re trying to lower your energy use around the home, you might be wondering if gas or electricity is cheaper. We’ve compared the efficiency, cost and environmental impact of gas and electric appliances and compiled a few key takeaways to help you decide which ones may be best for you:
- Gas appliances cost more to install but can have cheaper running costs than their electricity counterparts.
- Gas cannot power your entire home; even if you use gas appliances, you’ll still receive electricity bills.
- Gas appliances can be powered by liquified petroleum gas (LPG) which is bottled, or natural gas, which needs your home to be connected to the mains gas pipeline.
Expert tips for choosing between gas and electricity
Whether you choose gas or electricity, our Head of Energy, Meredith O’Brien, offers her expert tips on helping you save on your energy bills and deciding if gas is right for your household:
Consider purchasing appliances with high energy-efficiency
Energy-efficient appliances may cost more upfront but use less energy to run, which can benefit your household budget and lower your impact on the environment.
You don’t need to bundle electricity and gas
If you use both electricity and gas, you don’t need the same energy retailer for both. It may be cheaper to compare and purchase plans separately, rather than using a combined electricity and gas plan.
Be aware of installation costs
Switching to a new gas or electricity retailer doesn’t incur a connection fee or interrupt your supply. However, there’ll be installation costs if you’re switching from electricity to gas run appliances, or vice versa.
Comparing gas and electricity
Gas vs electricity: Is one cheaper than the other?
It depends on what you’re powering! Heating has the potential to be cheaper through electric appliances, but sometimes using gas (e.g. for cooking) is more efficient. While electricity charges are typically more expensive, the efficiency of your appliances can mean that gas is cheaper.
For example, while gas only makes up a part of your energy bill, it has cheaper usage charges (the price you pay for how much you consume) and supply charges (the cost to transport it to your home) than electricity. So, you could potentially save money by relying solely on gas for some appliances.
It’s worth noting that domestic and international pressures have pushed up gas prices, with prices expected to rise over 20% from 2022-24.1 As gas prices increase, so does the cost of running gas appliances. Costs can also depend on what type of gas you use. Natural gas is cheaper but requires a connection to the gas mains pipeline, while LPG is more accessible but also more expensive to run appliances with.
Types of gas appliances
Gas can only be used to power a few appliances that can cost more to purchase than their electric counterparts, so it’s good to consider which is right for you. Common gas appliances include:
Stove cook-tops and ovens
A gas oven is typically more expensive to purchase than an electric oven, but it can have lower energy usage costs overall. For this reason, it can be a good long-term purchase. However, unlike an electric stove-top that heats evenly, with a gas stove, you may waste energy if your stove sits near an open window or you use the wrong size pots and pans. Induction stovetops also use electricity. They’re heated by electromagnetic technology and are the most environmentally friendly and energy-efficient option, but also have the highest upfront cost.
Hot water systems
When it comes to gas vs electric hot water systems, the most common is the electric hot water system. It generally has the lowest upfront costs but is the most expensive to run. A gas system is more efficient and economical in heating, but the upfront cost will be higher. However, an electric heat-pump water heater outclasses gas systems in environmental benefits and lowering energy costs, especially when used in conjunction with a solar PV system.2
Gas heaters can be a cheap way to heat specific rooms, as long as they’re running on natural gas and the room is properly sealed.3 Gas heating systems for the entire home (e.g. hydronic and ducted) can be an efficient way of heating a home quickly. They’re most efficient when run by natural gas and the house is zoned, so you only heat the rooms you’re using. A downside to gas heating is installation costs can be expensive, and air conditioning may still be required for the home’s cooling needs.
Clothes dryers are huge energy consumers, so getting an energy-efficient appliance can help save on your power bills. Gas dryers can heat quicker than electric dryers and therefore dry clothes faster; however, they have higher upfront costs and are harder to maintain. While electric dryers may be a bigger energy consumer, heat pump clothes dryers are typically the most energy-efficient option.4
Depending on the efficiency of all your appliances and your usage of them, the cost efficiency of gas or electricity appliances will differ from household to household.
Installation and running costs
Typically, gas appliances cost more to buy and install but have cheaper running costs than electrical appliances. However, some modern electric appliances, like split-system heating, are actually more efficient and cheaper to run than most gas systems.
Different models and brands use varying amounts of power, so it pays to keep in mind the energy efficiency rating of the gas or electric appliance you have or plan on installing. The more efficient the device, the less power you’ll use, and the lower your energy bill will be. There are also ways to reduce your gas bill, such as periodically turning the gas system off, maintaining it and adjusting the thermostat. Likewise, there are ways you can save on your electricity bills, such as taking advantage of off-peak tariffs and controlled loads.
You’ll need to weigh up whether gas is more affordable versus running purely electric appliances, and whether it’s worth the more expensive installation cost. If natural gas isn’t available in your area, you may still be able to power your gas appliances with LPG bottles, but they may need to be converted from natural gas to LPG. It’s also worth noting that some gas appliances will still have electrical running costs (e.g. fans on ovens) and not be run solely on gas.
Is gas or electricity more powerful?
Gas is less powerful than electricity, as you need more gas to reach the same output of electricity. It takes 3.6 megajoules (MJ) of gas to equal 1 kilowatt-hour (kWh) of electricity.5
Once you have a rough understanding of how much energy gas and electricity appliances use, it’s easier to work out (roughly) which would cost more, given that gas usage charges are typically cheaper than electricity in Australia. If you have mainly electric appliances, you can find out more about the cost of appliances with our guide to technology energy consumption.
Important to know
Is gas cheaper than electricity for heating?
Due to rising gas prices and modern electric heaters (like reverse cycle air-conditioners) becoming more energy-efficient,3 it may be cheaper to warm your home with an electric heater than a gas heater. However, this will differ depending on which appliance you choose and where you live.
Is gas still cheaper if I have solar electricity?
Like gas, solar power can be costly to set up; however, having solar power means the running costs of electricity could become cheaper than gas in the long run. You may also be able to use any credits you get from your solar panels to help pay your electricity bill, which could lower the amount you spend on energy in general.
You can also combine solar energy with a gas or electric booster for specific appliances, mostly water heating systems, that will kick in if there isn’t enough sunshine to power the heater.
Is gas or electricity more environmentally friendly?
Gas is a fossil fuel; however, burning gas to generate electricity usually produces lower emissions than electricity generated from burning coal.6 Electricity sourced from green renewables like wind, hydro and solar is cleaner and more environmentally friendly than gas and coal-fired power.
What is a seasonal gas rate?
A seasonal gas rate charges different amounts for gas usage depending on the season. For example, as gas is typically used for heating, the price you pay during the winter months (the ‘peak season’) will be higher. You’ll typically be charged a lower amount in the non-winter months, or ‘off-peak season’.
You may be charged for how much gas you use within a set period or at a fixed rate for peak and off-peak seasons. This type of gas tariff is common in Victoria.
Do split system air conditioners use gas or electricity?
Split system aircon units are electric appliances. They use a refrigerant gas inside the system, but the appliance does not require a gas connection, as air conditioners don’t need a continuous gas supply. It’s unlikely that your appliance will need re-gassing unless there’s a fault with the aircon unit.
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