Gas vs electric: which heating system is more efficient?
How reverse cycle efficiency, tariffs and duct losses affect the comparison.
AEU designs and installs energy-efficient reverse-cycle air conditioning for Victorian homes, from one-room split systems to zoned whole-home ducted systems. We assess your existing equipment, heat load and eligible Victorian Energy Upgrades (VEU) discount before we quote, then apply the confirmed discount upfront. If you are comparing residential heating and cooling in Victoria, start with the system your home actually needs, not the largest rebate number on the market.
Most HVAC installers offer a 5-year workmanship guarantee — if they’re still operating to honour it. AEU backs every residential installation for three full decades — split, multi-split and ducted reverse cycle systems.
Heat or cool a single room or open-plan space. Quick install, VEU rebate-eligible, and perfect for bedrooms, living areas or home offices.
One outdoor unit powers 2–5 indoor units. Control each room independently. Perfect for 3–4 bedroom homes — comfort without the cost of ducted.
The gold standard for whole-home comfort. Zoned control, invisible vents, silent operation. Highest VEU rebates available — up to $10,290.
Switching to reverse cycle air conditioning for home heating and cooling can dramatically cut your energy bills compared to gas. A 2.5-star multi-split costs about $400/year, while gas ducted can run up to $1,760/year.
The household VEU heating and cooling discount is available across Victoria without an income test, including for private rental properties with the necessary owner and tenant coordination.
The new reverse cycle air conditioner must provide heating and cooling, be on the VEU approved-product register and carry the required warranty. If equipment is being replaced, it must generally be more than two years old. An accredited provider must be engaged before installation, confirm the eligible model, include the discount in the quote and manage the evidence and certificates.
A property with no eligible equipment to remove may still receive a smaller discount; therefore, decommissioning is not a universal yes-or-no test. The quote must use the correct baseline, and replaced equipment must be safely decommissioned with the required evidence.
Products that are not VEU approved, cooling-only new systems, unverified DIY work and installations completed without an accredited-provider pathway do not qualify for the standard upfront discount.
Capacity is heating and cooling output in kilowatts, not electricity consumption. A unit that is too small may run continuously without holding temperature; one that is too large can cost more, cycle excessively and produce wider temperature swings. AEU should complete an on-site load assessment that considers floor area and ceiling height, insulation and draughts, glazing, orientation and shade, construction, local winter conditions, occupancy, room use, airflow, outdoor-unit clearance, noise, switchboard capacity and future electrification.
Get a free site assessment →Indicative only — actual sizing follows an on-site load assessment.
Use this Victorian Government table only as a first pass. Ducted design also needs room-by-room air volumes, return-air sizing, zone diversity and duct heat-loss calculations. Existing gas ducts often need replacement when converting to reverse cycle.
Source: energy.vic.gov.au — choosing the right reverse cycle air conditioner
AEU works across Mitsubishi Electric, Mitsubishi Heavy Industries, Daikin, Fujitsu, Midea and Panasonic ranges. Check VEU approval, rated heating output, zoned energy label, sound power, controller, warranty and service support model by model.
Pay nothing today may be available to approved applicants through AEU's heating and cooling finance options, including the named CommBank Home Energy Upgrades option where eligible. Finance is separate from the VEU discount and is subject to lender approval, fees, terms and credit criteria. Before accepting, compare the cash price, VEU deduction, deposit, repayment amount, term, interest and total amount repayable. A $0 deposit is not a $0-cost system.



*Subject to lender approval. We'll find the right option for you.
Australian Energy Upgrades was founded in 2017 by two brothers, one of whom is a licensed electrical contractor. As a family-owned team, AEU has worked in the energy industry since 2014 and operates as a Registered Electrical Contractor (REC 23631). The design starts at your switchboard and usage rather than a package. The same team stays with the job from network approval to after-sales support.
Read verified heating and cooling feedback from homeowners who have dealt with AEU from quote through installation and commissioning.
Extremely happy with my experience installing solar & batteries with Australian Energy Upgrades. Jon and all the crew were a pleasure to deal with and very knowledgeable and helpful in all aspects of the installation. Would highly recommend
Very happy with the service and delivery. We originally were quoted from another provider, but after speaking to Jon and the team we ended up with a much better solution. Would recommend to anyone considering adding solar and battery to your home.
From the outset Australian energy upgrades have been of great assistance even after the installation they were still there. Prices were competitive and Derek helped when little obstacles from the power supply put in a charge I wasn’t expecting. The installer was great too working in 40c temperature. My friend also engaged A E U and was pleased with the entire process and service. Give them a chance to quote and you won’t be disappointed.
It was a pleasure experience installing our GoodWe system with the company. Everything was done (including inspection) before May. Our next consideration would probably be induction cook top and electrical Hot water system. Highly recommend 👍🏻👍🏻👍🏻 …
AEU installed a battery to my existing solar system, as well as a battery and solar panel system at my daughter’s home. From first contact through to completion, I was confident we were getting quality products installed by qualified and competent installers. The work at both properties was completed to a very high standard, communication was terrific, and everything was cleaned up afterwards. I have no hesitation recommending Australian Energy Upgrades.
We did our research with multiple companies before we chose AEU but Derek was just so thorough and knowledgeable and honest he made the decision easy in the end. Our contractor on the day of install was Tim and he was fantastic. I highly recommend this organisation.
From the moment I first contacted Australian Energy Upgrades I was in good hands navigating the complexities of a home solar battery installation. Thanks to Jon, Dean and the team for a smooth and professional experience.
My wife spoke with several companies and these guys offered the best deal but also came across as the most professional. What they probably didn’t know is that she used to work for the energy ombudsman and has great knowledge of what bad looks like, and these guys were great. Great communication all the way through. The team that delivered everything were really fast, efficient and helpful.
We were impressed with the honest and professional appraisal Jon provided. He took the time to put together a quality system for our needs and outcomes that we required. Thanks to Jon and his team we are confident that the system will future proof our property. We have no hesitation in recommending Australian Energy Upgrades to anyone.
Jon arrived as arranged and was straight to the point. He fully explained what we required to meet our demands — no sales pressure and left us to consider. Nick and his team are very professional and helpful. Their workmanship was nothing short of perfect. I fully recommend Australian Energy Upgrades.
Really happy with my recent installation of a new Sigenergy battery from Australian Energy Upgrades. Professional throughout and a speedy process given the increased demand due to govt rebate expiry. Special thanks to Jon for making things quick and easy during the sales phase and for Tim on install who had to deal with the supplier shipping the wrong inverter and coming back to finish it off promptly once we had the correct inverter delivered.
Timely and quality job by Australian Energy Upgrades. Sales consultant Jon was good for organising a variety of quotes to ensure we ended up with a system that suited. Installers completed 13.3kw system, battery and whole home blackout protection in one day and to a high standard.
Jon was my POC throughout my solar and battery installation process and he was fantastic. Very prompt, communicative and went above and beyond to get me installed. Very happy with my experience.
Extremely happy with my experience installing solar & batteries with Australian Energy Upgrades. Jon and all the crew were a pleasure to deal with and very knowledgeable and helpful in all aspects of the installation. Would highly recommend
Very happy with the service and delivery. We originally were quoted from another provider, but after speaking to Jon and the team we ended up with a much better solution. Would recommend to anyone considering adding solar and battery to your home.
From the outset Australian energy upgrades have been of great assistance even after the installation they were still there. Prices were competitive and Derek helped when little obstacles from the power supply put in a charge I wasn’t expecting. The installer was great too working in 40c temperature. My friend also engaged A E U and was pleased with the entire process and service. Give them a chance to quote and you won’t be disappointed.
It was a pleasure experience installing our GoodWe system with the company. Everything was done (including inspection) before May. Our next consideration would probably be induction cook top and electrical Hot water system. Highly recommend 👍🏻👍🏻👍🏻 …
AEU installed a battery to my existing solar system, as well as a battery and solar panel system at my daughter’s home. From first contact through to completion, I was confident we were getting quality products installed by qualified and competent installers. The work at both properties was completed to a very high standard, communication was terrific, and everything was cleaned up afterwards. I have no hesitation recommending Australian Energy Upgrades.
We did our research with multiple companies before we chose AEU but Derek was just so thorough and knowledgeable and honest he made the decision easy in the end. Our contractor on the day of install was Tim and he was fantastic. I highly recommend this organisation.
From the moment I first contacted Australian Energy Upgrades I was in good hands navigating the complexities of a home solar battery installation. Thanks to Jon, Dean and the team for a smooth and professional experience.
My wife spoke with several companies and these guys offered the best deal but also came across as the most professional. What they probably didn’t know is that she used to work for the energy ombudsman and has great knowledge of what bad looks like, and these guys were great. Great communication all the way through. The team that delivered everything were really fast, efficient and helpful.
We were impressed with the honest and professional appraisal Jon provided. He took the time to put together a quality system for our needs and outcomes that we required. Thanks to Jon and his team we are confident that the system will future proof our property. We have no hesitation in recommending Australian Energy Upgrades to anyone.
Jon arrived as arranged and was straight to the point. He fully explained what we required to meet our demands — no sales pressure and left us to consider. Nick and his team are very professional and helpful. Their workmanship was nothing short of perfect. I fully recommend Australian Energy Upgrades.
Really happy with my recent installation of a new Sigenergy battery from Australian Energy Upgrades. Professional throughout and a speedy process given the increased demand due to govt rebate expiry. Special thanks to Jon for making things quick and easy during the sales phase and for Tim on install who had to deal with the supplier shipping the wrong inverter and coming back to finish it off promptly once we had the correct inverter delivered.
Timely and quality job by Australian Energy Upgrades. Sales consultant Jon was good for organising a variety of quotes to ensure we ended up with a system that suited. Installers completed 13.3kw system, battery and whole home blackout protection in one day and to a high standard.
Jon was my POC throughout my solar and battery installation process and he was fantastic. Very prompt, communicative and went above and beyond to get me installed. Very happy with my experience.

Authorised by the Victorian Government to deliver rebates directly at point of sale — your incentives processed correctly, every time.

Licensed by EnergySafe Victoria. Every installation is completed by a licensed electrician — legally certified, compliant and safe.

Independently verified work health & safety management — required by Australia's largest commercial clients.

Factory-trained and certified by Tesla to design and install Powerwall systems with full manufacturer warranty.

Solar Accreditation Australia — the national standard for solar and HVAC system design and installation.

Signatory to Australia's consumer protection code — bound by transparent pricing, fair contracts and honest sales practices.
How reverse cycle efficiency, tariffs and duct losses affect the comparison.
Why room area is only the first input in a residential load calculation.
Insulation, draught sealing, zoning, set-points and maintenance.
Find out how much VEU rebate you qualify for. Free assessment. Rebates applied upfront. No paperwork on your end.




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Since 2017: family-owned Australian energy-upgrade specialist. 5,000+ customers and businesses shown on AEU’s current About page. REC 23631: Registered Electrical Contractor. 30 years: AEU heating and cooling workmanship warranty. Australian Energy Upgrades was founded in 2017 by brothers Tom and Sam Vandermark. One team coordinates the site assessment, system design, incentive paperwork, installation, commissioning and after-sales support. Before a gas-to-reverse-cycle upgrade in Victoria goes ahead, AEU checks the electrical supply, outdoor-unit position, pipe or duct routes, controls and the evidence needed for decommissioning.
AEU positions its 30-year workmanship guarantee as long-term cover for installation workmanship, separate from the manufacturer’s product warranty. Work is completed by appropriately licensed electrical and refrigeration trades, with the relevant electrical, refrigerant and gas compliance certificates supplied at handover. Your proposal and AEU’s published heating and cooling terms should state exactly which work the guarantee covers, along with exclusions, servicing conditions and the claims process.
A split system rebate in Victoria is not the same as a multi-split or ducted reverse cycle rebate. VEU value changes with the old equipment, the new system’s type and capacity, approved-product status and the market value of Victorian Energy Efficiency Certificates. The following figures are current Victorian Government household examples current at August 2026, not fixed AEU offers.
One outdoor unit connects to one indoor head. A single split suits a bedroom, study, living room or open-plan zone and is often the lowest-cost way to electrify the rooms used most. Separate units also let you leave empty rooms off.
For an approved 3–9 kW model, indicative VEU discounts range from $630–$1,610 when replacing a non-ducted gas heater, up to $840 for hard-wired resistance heating and about $210 for an older non-ducted reverse cycle unit. With nothing eligible to decommission, the example falls to $70–$140. Typical annual saving: up to $460 in the Victorian Government’s eligible gas-replacement example.
A multi-split connects several indoor heads to one outdoor unit, which can solve limited outdoor space while preserving room-by-room control. The design must account for simultaneous demand: the outdoor unit cannot always deliver every indoor head’s nameplate output at once. The current official example for a 10 kW multi-split replacing ducted gas is up to $2,940.
Four separate splits — one 8 kW and three 3 kW units — may attract up to $2,520. In Sustainability Victoria’s 100 m² model, a multi-split costs about $771–$1,448 less a year to heat than unzoned 3–6 star ducted gas, depending on system rating. A useful proposal includes the indoor-unit schedule, outdoor-unit diversity, sound data and winter heating output.
A central unit sends heated or cooled air through insulated ducts and ceiling or floor outlets. It is the closest functional replacement for whole-home gas ducted heating, with cooling added. Good zoning keeps bedrooms and living areas independent, while correct return-air sizing and sealed, insulated ducts limit losses.
For ducted gas replacement, current examples are up to $2,520 at 10 kW, $4,200 at 16 kW and $5,530 at 22.4 kW. Central electric resistance replacement is up to $5,460; replacing an old 22.4 kW ducted reverse cycle unit is up to $910. The Victorian Government estimates annual bill savings of up to $1,140 for an eligible large ducted upgrade. Tariffs, insulation, zoning, set-points and operating hours determine the household result.
Reverse cycle systems move heat rather than creating it by combustion or electric resistance. In Sustainability Victoria’s current small-home comparison, the modelled annual heating cost is $513 for a 2.5-star multi-split, $769 for a 1.5-star multi-split and $1,153 for an unzoned 1-star ducted reverse cycle system. The same comparison puts unzoned ducted gas at $1,540 for a 6-star unit, $1,754 at 4 stars and $1,961 at 3 stars.
These are comparative estimates, not a bill guarantee. The best decision uses your floor area, building fabric, local climate, energy tariff and operating pattern.
Residential solar can reduce daytime electricity purchases, while solar battery storage can shift stored energy into evening heating. Draught sealing and insulation reduce the load before a larger system is considered.
AEU is a Registered Electrical Contractor (REC 23631). Its wider company credentials include Solar Accreditation Australia credentials, Solar Victoria approved-retailer requirements, CM3 contractor prequalification, New Energy Tech Consumer Code approval and NECA membership. Each credential should be presented for what it covers. Tesla certification has been omitted from this service page because it does not establish heating and cooling competence. HVAC work must be completed by appropriately licensed trades, with the required electrical and refrigerant compliance document supplied at handover.
Availability is confirmed from the property postcode and project type. Planning a broader home-energy upgrade? Compare heat-pump hot water, residential solar, solar battery storage and home EV charger installation.
Melbourne CBD, North Melbourne, Richmond, Kew, Balwyn, Box Hill, Doncaster, Doncaster East, Donvale, Glen Waverley, Ringwood, Preston, Sunbury, Melton, Point Cook, Hoppers Crossing, Werribee, Wyndham Vale, Narre Warren, Pakenham, Dandenong, Cranbourne, Frankston, Mornington and Seaford.
Geelong, North Geelong, West Geelong, Newtown, Belmont, Highton, Grovedale, Hamlyn Heights, Lara, Leopold, Moolap, Whittington, Waurn Ponds, Armstrong Creek, Charlemont, Ocean Grove, Barwon Heads, Drysdale, Clifton Springs, Portarlington, St Leonards, Indented Head, Queenscliff, Torquay, Anglesea and Wallington.
Ballarat, Bendigo, Colac, Mildura, Shepparton, Morwell, Traralgon, Warragul, Wonthaggi, Bannockburn and the Grampians.
Sydney and selected surrounding service areas.
A split suits one room or open zone. A multi-split serves several rooms from one outdoor unit where outdoor space is tight. Ducted reverse cycle provides discreet whole-home coverage through vents. Compare how many rooms run together, available pipe or duct routes, noise, appearance and budget. Several efficient splits can cost less to run than an unzoned ducted system when unused rooms remain off.
It is not a flat rebate. The accredited provider identifies the old equipment and approved new model, then calculates certificates from the system type, capacity, efficiency and VEU method. Certificate prices and provider costs affect the dollar value. Current examples run from $70–$140 for a new 3–9 kW split with nothing decommissioned to $5,530 for a 22.4 kW ducted reverse cycle system replacing ducted gas. The specific deduction belongs in your written quote.
Yes. Modern reverse cycle air conditioners are heat pumps designed to heat as well as cool. When comparing reverse cycle air conditioning Victoria-wide, look at the model’s rated heating output and cold-climate zoned energy label, not only cooling capacity. Sizing, defrost behaviour, outdoor-unit airflow and insulation matter most in colder locations such as Ballarat, Bendigo and the Dandenong Ranges.
A straightforward single split is often completed in one day. Multiple splits or a multi-split commonly take several days, while a ducted changeover may take two to five days depending on roof or underfloor access, new ducts, switchboard work, zones and removal of gas equipment. AEU should confirm scope, access, electrical work, decommissioning and commissioning before scheduling.
Possibly, but the discount is normally much smaller. Victorian Government examples allow about $70–$140 for a 3–9 kW system with no decommissioned product, compared with $630–$1,610 when eligible non-ducted gas heating is removed. If gas remains for other appliances, ask whether closing the gas account after later electrification would avoid the daily supply charge.
No. VEU is a Victorian program. NSW households may have different certificate pathways or retailer offers, and the product, baseline and installer rules are not interchangeable. AEU’s Sydney team can assess the current NSW pathway and provide a separate quote. Victorian discount figures do not apply to a NSW installation.
It depends on the system you replace and the system installed. Replacing ducted gas with an approved ducted reverse-cycle system attracts the largest discounts; replacing a non-ducted gas heater attracts less. AEU confirms the eligible amount before quoting and applies it upfront.
Not always. Many ducted systems up to roughly 16kW run on single phase. Larger systems generally require three phase, and where a property is single phase an upgrade may be needed. We confirm supply and switchboard capacity at assessment.
Split suits one room or a small area. Multi-split runs several indoor heads from one outdoor unit, which saves external space. Ducted conditions the whole home from one system and hides the equipment, but needs ceiling or subfloor space for duct runs.
Yes. Without zoning a ducted system conditions every room whenever it runs. Zone dampers close off unused areas so the system works against a smaller load, which cuts run time and makes overnight bedroom-only operation practical.
Rated heating output is measured at 7°C, so what matters in Ballarat, Bendigo and the ranges is output at 2°C and below. We specify cold-climate capable equipment where the location calls for it rather than sizing from the headline figure.
A single split system is usually a one-day job. Multi-split and ducted installations typically take two to three days depending on duct runs, roof access and any switchboard work. Known site work is identified in your quote.
AEU completes residential heating and cooling installation across metropolitan Melbourne, Greater Geelong, Ballarat, Bendigo, the Latrobe Valley, Colac and the Surf Coast, plus Albury–Wodonga, Wagga Wagga and Deniliquin in southern New South Wales.
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