Meh, I'm 80% in favour of using the dryer. The cost is worth it to me.
But I put cloth diapers out to dry in the sun or on hangers because the elastics' durability is significantly affected by putting them in the dryer, and that's one load every 2 days.
As far as initial cost, there are always dozens of used washer/dryers for sale.
We got a used set (it needs a washer part replaced, but that's a <$60 job) for $300. High-efficiency front-loader washer and dryer, 4 years old. Another $80 for the stacking kit to put them upstairs in the washroom, plus some DIY plumbing/venting.
So the only space "lost" is vertical space, which we didn't need for storage anyway. It was empty before.
We were given the washer/dryer we had beforehand, so those were free. Although a lot less energy-efficient.
It was hard to air-dry before, because I had a stone basement that was moldy and damp (wet with water in a trench running down around it). Mold would literally grow on damp things down there, so that was a no-go.
With the laundry upstairs, I still have to put built-in cupboards around it and I'll have a drying rack pull out of the top.