The cost of heating and cooling your home

As our climate changes, extreme weather events have become more frequent and heatwaves or cold snaps have us turning on appliances to keep ourselves comfortable. But, as the cost of living continues to bite at people’s budgets, which state in Australia is paying the most?

New research from energy comparison service, iSelect, has analysed the average energy usage for different heating and cooling appliances to calculate the current estimated running cost for each appliance based on real-world usage rates, climate zones and the average kilowatt (kW) consumption. These figures only reflect the expected usage for each appliance, as actual usage may vary depending on the energy retailer and plan, usage rates, tariff types, appliances, climate and personal usage.

With every decade in Australia being warmer than the last,¹https://www.bom.gov.au/weather-and-climate/past-weather-and-climate/state-of-the-climate-2024/australias-changing-climate and the cost-of-living stinging budgets, you might be weighing up whether staying cool is worth the increase in electricity bills. And with winter approaching, you might be interested in whether heating is hurting your wallet. That’s why iSelect has identified which appliances are the most energy-efficient, and which are the biggest contributors to your electricity bill.

Most expensive states for heating and cooling your home

Which states pay the most for heating?

1. Australian Capital Territory

The most expensive state for heating is the ACT, due to a combination of high energy tariffs and the ACT’s cold climate, making residents feel the sting when turning on their heater. In ACT, a reverse-cycle air conditioner for heating can cost an estimated $1,471.20 per year, assuming a four-hour usage each day for half the year.

Window wall air cons use less energy on average, so the annual cost is approximately $893.23, with portable heaters being the cheapest option at $472.89.

2. South Australia

While not as cold as other states, South Australians see higher usage rates for their electricity driven partly by their reliance on gas-fired power, limited interconnection to our other states and unpredictability in the SA energy market.²https://energyaction.com.au/why-electricity-expensive-south-australia/

Reverse-cycle air cons remain the most expensive heating appliance ($1,164.62 per year). Window wall air cons follow close behind, costing an estimated $694.69 per year, compared to  $368.04 per year that portable electric heaters may cost.

3. Tasmania

Tasmania is the third most expensive state for heating in the analysis. Reverse-cycle air conditioners cost an estimated $1,048.58 per year to heat the home, window wall air cons costing $636.64 per year, and portable electric heaters costing an assumed $337.04 per year.

4. Victoria

Victoria ranks in fourth place, with reverse-cycle air conditioners costing an estimated $1,045.71 per year, window wall air cons costing an average $634.89 and portable electric heaters setting VIC residents back by an estimated $335.12 per year, assuming a four-hour usage per day for half the year for each appliance.

Despite being a cold climate, unlike South Australia, Victoria stays out of the top three thanks to their cheaper than average tariff prices.

5. New South Wales

Sitting in fifth place, heating your home in New South Wales may cost residents $938.27 per year when using a reverse-cycle air conditioner (assuming an average climate with two and a half hours of usage per day for 183 days a year). Portable heaters, on the other hand, could cost an estimated $296.30 per year.

The most expensive states for cooling your home

1. Queensland

It should come as no surprise that the sunshine state has topped the list on who is paying the most to stay cool. A reverse-cycle air conditioner running for 4 hours a day for half the year costs an estimated $1,380.61, almost double the national average of $723.25.

Unlike heating appliances, however, fans provide a cost-effective alternative to energy guzzling appliances. When ran for the same amount of time, standing fans are only a fraction of the cost of running an air con at $12.33 per year, and ceiling fans are even cheaper at $9.86 per year.

2. Northern Territory

The Northern Territory ranks second on most expensive states to cool your home with large cooling appliances costing an estimated $1,062.67 per year for reverse-cycle air cons (running four hours a day), $799.68 for window wall air cons and $703.46 for portable air cons.

3. South Australia

Despite having an average climate, South Australia is the only state to make the top three for both heating and cooling. Assuming South Australian residents are only using their cooling appliances for 2.5 hours a day (less than a hot climate might), reverse-cycle air cons could cost an estimated $1,015.47 per year.

Residents could still potentially limit their energy use by relying on standing fans ($10.22 per year) or ceiling fans ($8.17) per year.

4. New South Wales

Also using running appliances for an assumed two and a half hours per day for half the year, NSW residents are spending an estimated $938.27 on cooling with a reverse-cycle air conditioner.

Other estimated yearly appliance costs include window wall air cons at $615.64, portable air cons at $541.56, standing fans at $8.23, and ceiling fans being the cheapest at just $6.58.

5. Western Australia

In fifth place with an average climate, WA’s energy use is the first to be under the national average. Cooling your home with a reverse-cycle air con (at two and a half hours per day for half the year) is estimated to be around $718.06 (compared to the national average estimated at $893.49). Fans remain the cheapest with iSelect analysis calculating standing fans will cost WA residents $7.22 a year, and ceiling fans $5.78.

Cheapest states for heating and cooling your home

Victoria is our cheapest state for electricity to run cooling appliances, paying over five times less than Queensland. Based on iSelect’s analysis, cooling the home can cost as little as $232.02 per year when using a reverse-cycle air conditioner (at an hour a day for 183 days), and only $1.87 per year with a ceiling fan. Victoria typically sees cheaper costs due to their investment in renewable energy, particularly solar, and having strong market competition between energy retailers, allowing the average costs for heating and cooling to sit well below the national average.³https://www.energy.vic.gov.au/about-energy/news/news-stories/energy-facts-renewables-and-electricity-prices

Meanwhile, the Northern Territory is paying the least for their heating, followed closely by Queensland. Running a reverse-cycle air conditioner in the NT cost an estimated $304.69 per year, with the Australian average being more than double at $893.49.

Heating vs Cooling

Through calculating the average energy consumption in kW for different heating and cooling appliances, iSelect has been able to determine which are adding to electricity bills the most.

Is heating hurting your wallet?

While newer Australian homes have higher standards for insulation, the average home in 2003 had a NatHERS star rating of only 1.8 out of 10, and many of these homes are still around today.⁴https://www.csiro.au/en/news/all/articles/2021/september/its-in-the-stars-how-scientists-figure-out-your-homes-energy-rating

Bad insulation means Australians often crank the heat to stay warm once the temperature drops, with cold climate regions running reverse-cycle air cons using a whopping 4,099.2 kW per year (1,043.1 kW in hot climates; 2,607.75 kW in average climates). That means the average Australian consumer might be spending $893.49 per year on heating alone, according to iSelect research.

Window wall air conditioners maybe using 2,488.8 kW per year in hot climates (622.2 kW in cold climates; 1,555.5 kW in average climates), or an estimated $537.71 on average. Portable air cons come in third by using an estimated 1,317.6 kW per year in hot climates (329.4 kW in cold climates; 823.5 kW in average climates), setting Australians back an average $284.67 per year.

The cost of cooling your home

It’s easy to reach for the aircon remote as soon as temperatures peak, but how much energy is it really using?

Hot climates may be consuming an estimated 3,638.04 kW per year, while colder climates such as Victoria or the ACT may only consume 909.51 kW per year. For the average Aussie home, that’s up to $1,191.87 per year in electricity costs. Window wall and portable air cons use a similar amount of energy, with their consumption at 2,727.68 kW and 2,408.28 kW respectively.

If you’re looking to save on your next bill while still beating the heat, fans can cost us a fraction of the energy of one of the large cooling appliances. With standing fans in hot climates only using 36.6 kW per year (9.15 kW for cold climates; 22.875 kW for average climates), they can be a cheap alternative if you can’t afford the installation and running costs of an air con, with Australians paying an average of just $7.08 per year.

Ceiling fans come in as the most energy efficient, with their energy consumption at only 29.28 kW per year for hot climates (6.32 kW for cold climates; 18.3 kW for average climates), costing the average Aussie consumer just $5.66 per year.