As Australians brace for another winter, the perennial question of appliance running costs becomes critical. With fluctuating energy prices, understanding the real impact of your heating and drying choices on your household budget is more important than ever. In 2026, the cost of keeping warm and dry will largely depend on your location, your energy retailer, and crucially, the efficiency of your appliances.
While draft Default Market Offer (DMO) and Victorian Default Offer (VDO) prices for July 2026 suggest some relief in NSW, Queensland, South Australia, and Victoria, with proposed residential decreases ranging from 1.3% to over 10%, Tasmanians on standing offers will see an average increase of 2.06% from July 1, 2025. This guide breaks down the actual costs, state by state, to help you make informed decisions this winter.
Understanding Your Winter Energy Bill in 2026
Your electricity bill is a complex mix of wholesale energy costs, network charges, environmental schemes, and retail operating costs. The Australian Energy Regulator (AER) sets the DMO for NSW, South East Queensland, and South Australia, while the Essential Services Commission (ESC) sets Victoria’s VDO. These serve as price caps for standing offers and reference prices for market offers.
State-by-State Electricity Prices (Proposed for July 2026)
As of April 23, 2026, the final determinations for the 2026-27 DMO and VDO are expected in May 2026. However, draft proposals indicate the following changes for residential customers on standing offers:
| State/Territory | Average Electricity Rate (Feb 2026, c/kWh) | Proposed DMO/VDO Change (July 2026) | Estimated New Average (c/kWh) |
|---|---|---|---|
| New South Wales | 35.9 - 40.0 | -2.4% to -8.2% | ~33.0 - 38.0 |
| Victoria | 26.3 - 33.4 | -$43 to -$48 annual bill drop | ~29.0 - 32.0 |
| South East Queensland | 33.0 | -10.1% | ~29.6 |
| South Australia | 43.4 | -1.3% | ~42.8 |
| Tasmania | 28.5 (Anytime Tariff 31) | +2.06% (from July 2025) | ~29.1 |
| ACT | 30.7 | No draft change specified | 30.7 |
| Western Australia | 32.37 (Synergy) | No draft change specified | 32.37 |
| Northern Territory | 30.08 (Power & Water Corp) | No draft change specified | 30.08 |
Note: These figures represent average rates for residential standing offers and are subject to final determination in May 2026 for NSW, VIC, QLD, and SA. Market offers from retailers are often more competitive than these default prices. We strongly encourage consumers to compare plans through Energy Made Easy or Victorian Energy Compare.
Gas Prices
Unlike electricity, comprehensive state-by-state residential gas price forecasts for 2026 are less readily available. In Tasmania, the natural gas residential tariff from January 1, 2026, includes a usage charge of 5.471 c/MJ and a fixed daily charge of $0.817 per day. Generally, gas heating can be more cost-effective than electric resistance heating in homes with existing gas connections, but the upfront cost of gas appliances and installation can be higher. For a deeper dive into managing gas costs, see our guide: Australia’s 2026 Winter Gas Squeeze: How to Prepare Your Home and Avoid Bill Shock.
Energy Relief and Rebates 2026
Government energy relief measures are subject to change annually. For the 2025-26 financial year, Victoria’s Federal Government energy rebate of $300 (from 2024-25) will reduce to two payments of $75 in July and October. Tasmania’s Annual Electricity Concession increased by 2.06% for 2025-26. Consumers should check their state government’s energy department websites for the latest on available concessions and rebates, as these can significantly offset winter bills.
Appliance Deep Dive: What Each Really Costs to Run
To provide a tangible comparison, we’ll use an average electricity rate of 35 c/kWh for calculations, acknowledging that actual costs will vary based on your state, retailer, and tariff structure (e.g., time-of-use rates).
Reverse Cycle Air Conditioners
Reverse cycle air conditioners are widely considered the most energy-efficient electric heating option, as they transfer heat rather than generating it. Modern units boast a Coefficient of Performance (COP) between 3 and 6, meaning they produce 3 to 6 units of heat for every unit of electricity consumed.
A 7 kW reverse cycle unit might draw 2.8–3.2 kW in heating mode on a cold winter day.
Using a 3 kW draw for 6 hours a day at 35 c/kWh:
- Daily Cost: 3 kW * 6 hours * $0.35/kWh = $6.30
- Monthly Cost (30 days): $6.30 * 30 = $189.00
Heating costs for reverse cycle systems can range from $18 to $528 annually, depending on room size, efficiency, and usage. For comparison, a 2.5 kW unit might cost around $0.22 per hour, while a 9 kW unit could reach $6.30 per hour at full blast.
Electric Heaters (Space Heaters)
Electric resistance heaters (e.g., bar heaters, oil column heaters, fan heaters) are generally the least efficient and most expensive way to heat a room, as they convert all electricity directly into heat. Most common models range from 750W to 1500W (0.75 kW to 1.5 kW).
Using a 1.5 kW electric heater for 5 hours a day at 35 c/kWh:
- Daily Cost: 1.5 kW * 5 hours * $0.35/kWh = $2.63
- Monthly Cost (30 days): $2.63 * 30 = $78.90
While seemingly lower daily, space heaters are often used for smaller areas. Running multiple units or using them for extended periods in poorly insulated rooms will quickly escalate costs. Consider Draught-Proofing vs. a New Heater vs. Solar Panels: Best ROI for Cutting Your Australian Winter Energy Bills in 2026 for more context.
Electric Blankets
Electric blankets are one of the cheapest ways to keep warm, as they provide targeted heat directly to you, rather than heating an entire room. They typically consume between 60W and 150W.
Using a 100W (0.1 kW) electric blanket for 2 hours a night (pre-heating) at 35 c/kWh:
- Daily Cost: 0.1 kW * 2 hours * $0.35/kWh = $0.07
- Monthly Cost (30 days): $0.07 * 30 = $2.10
Energy Australia estimates they cost around 4 cents an hour to run. CHOICE calculates a seasonal cost of around $20-$48 for a single bed electric blanket used every night for three months. This makes them an exceptionally cost-effective personal heating solution.
Clothes Dryers
Clothes dryers are notorious energy guzzlers, especially during winter. However, significant differences exist between types.
| Dryer Type | Typical Energy Use per Load (kWh) | Estimated Cost per Load (at 35 c/kWh) | 10-Year Running Cost (CHOICE, 1 load/week) |
|---|---|---|---|
| Vented Dryer | 2.4 - 5.94 | $0.84 - $2.08 | ~$1,930 |
| Condenser Dryer | 2.8 - 5.5 | $0.98 - $1.93 | ~$1,864 |
| Heat Pump Dryer | 0.6 - 3.5 | $0.21 - $1.23 | ~$759 (or lower for 10-star models) |
Heat pump dryers use a closed-loop system to recycle heat, consuming up to 60% less energy than conventional dryers. Models like the Electrolux UltimateCare Plus 8kg heat pump dryer achieve a 10-star energy rating with a 10-year running cost as low as $554.19. While they have a higher upfront cost (e.g., Samsung 9kg Bespoke Smart heat pump dryer for $1,999 or Haier 8kg heat pump dryer for $713), the long-term savings are substantial, making them a worthwhile investment for frequent users.
Strategies to Slash Your Winter Energy Bills
- Optimise Your Heating: Prioritise reverse cycle air conditioners for whole-room heating. Use electric blankets for personal warmth. If using a space heater, target small, well-sealed rooms for short periods. Set thermostats efficiently – every degree higher can add 10% to heating costs.
- Seal Your Home: Draughts are major energy thieves. Seal gaps around windows, doors, and floorboards. Insulate ceilings and walls where possible. This significantly reduces the workload on your heating appliances. For more, see: Draught-Proofing vs. a New Heater vs. Solar Panels: Best ROI for Cutting Your Australian Winter Energy Bills in 2026.
- Smart Dryer Use: Whenever possible, use a clothesline or drying rack. If using a dryer, opt for a heat pump model. Always clean the lint filter, spin clothes thoroughly in the washing machine beforehand, and avoid overloading. Running your dryer during off-peak electricity hours can also save money if you’re on a time-of-use tariff.
- Understand Your Tariff: Many Australians are on time-of-use (TOU) tariffs, where electricity prices vary throughout the day. Using high-consumption appliances during off-peak periods can lead to significant savings. Learn more here: How to Avoid Peak Demand Charges and Slash Your Time-of-Use Electricity Bills in Australia in 2026.
- Consider Energy-Efficient Upgrades: Beyond heating and drying, consider upgrading other major appliances like hot water systems to heat pumps, which offer substantial savings. Read our guide: Best Heat Pump Hot Water Systems in Australia 2026: Costs, Rebates & Buyer’s Guide.
Bottom Line
For Australian households in winter 2026, the most significant savings will come from prioritising efficient heating methods like reverse cycle air conditioners and electric blankets, coupled with strategic use of clothes dryers, ideally highly-rated heat pump models. While draft DMO/VDO prices indicate some relief in key states, remaining proactive in understanding your electricity tariff and investing in energy-efficient appliances and home sealing measures offers the most reliable path to lower winter energy bills. Don’t rely solely on default offers; actively compare market offers from retailers to secure the best deal for your circumstances.