Gas vs Electric Heating: Which Is Cheaper and More Efficient in 2025?
With energy prices shifting and Victorian government rebates on offer, now’s the perfect time to compare three leading heating solutions: traditional gas ducted, reverse—cycle split (single and multi—head), and ducted refrigerated systems.
At Coldflow, we break down total costs, carbon emissions and rebate eligibility so you can make an informed decision.
10 Year Cost & Emissions Comparison
| System | Base Install Cost | VEU Rebate* | Net Install Cost | Annual Running Cost | 10 yr Total Cost | CO₂ Emissions |
|---|---|---|---|---|---|---|
| 6 Star Gas Ducted | $6,000 | — | $6,000 | $800 | $14,000 | 3t |
| Reverse Cycle Split (2 heads) |
$3,500 × 2 = $7,000 | –$1,400 × 2 = –$2,800 | $4,200 | $700 | $11,200 | 0.8t |
| Ducted Refrigerated** | $9,000+ | –$3,000 | $6,000 | $650 | $12,500 | 1.0t |
* Victorian Energy Upgrades (VEU) rebates depend on the specific unit being installed and the gas heater being replaced.
**Please note Ducted refrigerated systems typically heat and cool the entire home.
1. Gas Ducted Heating
How it works
A central gas furnace heats air, distributing it via concealed ducts.
Pros
Quick, wholehome warmth; low per MJ fuel cost; existing duct retrofits cost effective.
Cons
Heating Only; No VEU rebate; higher carbon footprint; annual safety and duct cleaning requirements
2. Reverse Cycle Split & Multi–Head Systems
How it works
Heatpump extracts warmth from outside air, delivering it through wall mounted or ceiling cassette units. Multiple indoor heads let you heat or cool up to four zones independently.
Pros
Dual heat/cool function; highly efficient (COP 3 to 5); rebates of $1,400 per head under VEU; minimal disruption to install.
Cons
Visible indoor units; total upfront rises with each additional head; outdoor unit footprint.
3. Ducted Refrigerated Systems
How it works
A central refrigerated coil unit in the roof cavity connects to your duct network and a single outdoor condensing unit, providing evenly distributed heating and cooling.
Pros
Whole home comfort with no visible heads; up to 7 stars energy rated; rebates available under VEU; seamless integration with zoning thermostats.
Cons
Highest upfront cost; requires full home ductwork and refrigerant line install; outdoor unit is larger.
Environmental Impact
- Gas Ducted: ~3t CO₂ per winter season
- Reverse Cycle Split: ~0.8tCO₂ (Vic grid mix)
- Ducted Refrigerated: ~1.0t CO₂, with potential for near zero when paired with solar PV
Our Conclusion
Gas ducted remains straightforward if you already have ducts and gas—but offers no rebate.
Reverse cycle split (single or multihead) delivers excellent efficiency, cooling versatility.
Ducted refrigerated provides discreet whole home comfort but at higher upfront cost.
Ready to crunch your personalised numbers?
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