Heater vs Reverse-Cycle Air Conditioner: Running Cost
2 kW of heat for 6 hours a day over 120 days costs about $477 with a resistance heater and about $159 with a reverse-cycle air conditioner at COP 3, at the Ausgrid Default Market Offer rate of 33.14c per kWh.
Try your own numbers
Last checked 10/11/2026. Sources: Australian Energy Regulator: The Default Market Offer (tariff caps 2026-27); Essential Services Commission (Victoria): Victorian Default Offer price review 2026-27.
Where the rate comes from
The 33.14c per kWh is the Australian Energy Regulator’s Default Market Offer cap for the single-rate residential tariff in the Ausgrid network area (Sydney, Central Coast, Hunter) for 2026-27. It is the most a retailer can charge on a standing offer, so many households pay less on a market offer. The AER’s own published annual price for the same tariff (usage and daily supply charge together) is $1,899 for 3,900 kWh, which the tariffs reproduce.
2 kW × 6 h × 120 days is 1,440 kWh of heat. A resistance heater turns each kWh of electricity into one kWh of heat, so it uses 1,440 kWh: $477.22. A reverse-cycle air conditioner moves heat, so at a COP of 3 it uses 480 kWh: $159.07. The saving is $318.14 a year.
COP is an assumption. A COP of 3 is an editorial rule of thumb; real efficiency falls in very cold weather and depends on the unit. Check the Energy Rating label or specification sheet. The daily supply charge is the same either way and is not included.
Common questions
Does this apply outside NSW?
The AER’s Default Market Offer covers New South Wales, South East Queensland and South Australia. Elsewhere enter the usage rate from your bill.
Is the rate GST inclusive?
The AER page does not say. Compare with the usage rate on your own bill.