Reverse cycle vs gas heating: running costs, rebates and replacing gas ducted

Is reverse cycle cheaper than gas heating?

Yes, in most homes, and by a margin that governments now publish. These are the figures we could check on official sources in September 2026. They are estimates for typical homes, so treat them as a guide to scale, not a promise on your bill.

Your own number depends on the unit's efficiency and your tariff. Our running cost calculator does the electricity side, and a local quote will tell you what the swap costs upfront.

How does heat pump heating work?

A reverse cycle air conditioner is an air source heat pump. In winter it pulls heat out of the outside air, even cold air, concentrates it with a compressor and pushes it inside. In summer it runs the other way. The electricity moves heat rather than making it.

That is why the ACT Government describes reverse cycle as 300 to 600 percent efficient: one unit of electricity in, three to six units of heat out. A gas heater burns fuel to make heat and can't deliver more energy than the gas it burns. An electric bar heater or panel heater turns one unit of electricity into one unit of heat.

The catch is that a heat pump's efficiency falls as the outside temperature drops, because there is less heat to move. Good units handle it. Cheap ones struggle. More on that below.

Reverse cycle vs gas ducted heating: side by side

The honest summary: if your gas ducted is young and you don't want cooling, run it. If it's old, noisy or needs a big repair, or you're about to buy cooling anyway, the swap wins. Get a quote before the furnace makes the decision for you in July.

Replacing gas ducted heating with ducted reverse cycle

It's a bigger job than swapping a furnace for a furnace. Expect the installer to size the new system for your heating load, not just cooling, and to replace the ductwork. The ACT Government's buyer guide says gas ducts are too narrow for reverse cycle and may have age problems, and recommends at least R1.5 insulation on the new ducts, because a ducted system can lose as much as 30% of its heat through the ducting.

There's also an outdoor unit to place, a dedicated circuit (about $300 to $900) and possibly a switchboard upgrade ($1,000 to $3,500), and the old furnace to decommission and remove. In Victoria, decommissioning evidence is part of the VEU paperwork.

Size matters twice here: the heating load sets the kW, and the kW sets the VEU band. Our size calculator is a start, the ducted cost guide breaks the price down further, and a local quote turns both into your number.

Brivis, Braemar and older gas ducted systems: repair or replace?

Brivis and Braemar are two of the names you'll often see on a gas ducted furnace in a southern roof space. The brand on the furnace doesn't change the rebate. What matters is that it's a ducted gas heater, that it's more than two years old, and that it is decommissioned when the new system goes in.

The replace-or-repair call usually comes down to three questions.

• How big is the repair? A service or a part is one thing. A major component on an old furnace is the moment to price the alternative.
• Do you want cooling? If you're about to spend money on cooling anyway, one ducted reverse cycle does both jobs.
• Is heating your last gas appliance? If hot water and cooking are already electric, removing the gas heater lets you drop the supply charge as well.

Don't let a furnace fail in June and force a rushed decision. Get the swap priced in spring or summer, when installers have time. Get up to three local quotes with the furnace removal itemised.

Gas to electric rebates in 2026

The rebates that reward removing gas heating are concentrated in Victoria and the ACT.

• Victoria (VEU): up to $5,530 for ducted gas to ducted reverse cycle, up to $2,940 for ducted gas to a multi-split, and $630 to $1,610 for a gas room heater to a split. No income test. See the Victorian rebate page.
• ACT: ActewAGL electricity customers can get $2,500 off a ducted reverse cycle replacing ducted natural gas, plus $500 in bill credits over three years, under the Energy Efficiency Improvement Scheme; concession card holders up to $5,000. Concession card homeowners can also get 50% back up to $2,500 through Home Energy Support. See the ACT rebate page.
• NSW and SA: the Energy Savings Scheme and REPS discount efficient reverse cycle whether or not gas comes out. See NSW and SA.

All of these are applied through the installer or an accredited provider. The full national picture is in our 2026 rebates guide.

Getting off gas: the supply charge and what's changing

The daily supply charge is the part of the gas bill people forget. You pay it whether you use one burner or heat the whole house. The Victorian Government estimates that disconnecting once your last gas appliance is gone saves around $350 to $400 a year in supply charges. Before you book it, ask your gas retailer and distributor what closing the connection involves and costs at your address.

Victoria is also changing the rules. From January 2027 new homes must be built all-electric. From 1 March 2027, when a rental's heater breaks and cannot be repaired, the landlord must replace it with an efficient reverse cycle in the main living area. For owner-occupiers, a broken gas hot water unit must be replaced with electric from 1 March 2027, but there is no requirement to replace gas space heating. The ACT has said it intends to transition away from fossil gas by 2045.

Does reverse cycle heating work in cold climates like Canberra, Hobart and Ballarat?

Yes, if you buy the right unit. The ACT Government says good systems keep working at minus 10 degrees. Efficiency falls as the temperature drops, and the outdoor unit periodically runs a defrost cycle on frosty mornings, so a unit that looks fine on paper at 7 degrees can fall short at zero.

• Compare heating capacity at low outdoor temperatures, not just the nominal kW on the brochure.
• Read the cold-zone rating on the Zoned Energy Rating Label, which rates each unit separately for hot, average and cold climates.
• For splits, ask about the H2 rating, which the ACT Government flags as the sign a unit will work efficiently in a Canberra winter.
• Size for the coldest morning. In Ballarat, Hobart or Canberra, heating sets the size, not cooling.
• Put the outdoor unit where defrost water can drain away and won't ice up a path.

Local prices are on our Canberra, Hobart and Melbourne pages. For a house in the cold, get a quote that states the low-temperature heating output in writing.