How to Lower Your Electricity Bill in Australia (2026 Guide)

Why Your Electricity Bill Keeps Going Up

Electricity prices in Australia have increased significantly over the past decade. The average annual residential electricity bill now sits between $1,400 and $2,100 depending on your state, with South Australia consistently the most expensive and the ACT among the cheapest.

There are several reasons bills keep rising:

• Network costs: The poles and wires that deliver electricity to your home make up around 40–50% of your bill.
• Wholesale prices: The cost of generating electricity fluctuates with fuel costs and renewable energy supply.
• Retailer margins: Energy retailers add their own margin on top of network and generation costs.

The good news is that many Australian households are paying more than they need to. Switching to a cheaper plan is the single most effective way to reduce your electricity costs.

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Step 1: Understand Your Current Bill

Before comparing plans, you need to know what you are currently paying. Your electricity bill contains several key figures:

• Usage rate (c/kWh): What you pay for every kilowatt-hour of electricity you use.
• Daily supply charge ($/day): A fixed charge for being connected to the grid, regardless of usage.
• Total consumption (kWh): How much electricity you used in the billing period.
• AER reference price: A benchmark rate set by the Australian Energy Regulator. Plans above the reference price are considered expensive.

If your plan is above the reference price for your state, you are almost certainly paying too much.

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Step 2: Compare Electricity Plans

Comparing plans is the most reliable way to reduce your bill. Use an independent comparison service to see available plans in your area.

When comparing, look at:

1. Usage rate (c/kWh) — lower is better for high-usage households
2. Daily supply charge — lower is better for low-usage households
3. Contract type — fixed rates offer price certainty; variable rates can go up or down
4. Exit fees — avoid plans with exit fees unless the savings justify the risk
5. Solar feed-in tariff — if you have solar, this is critical

Compare electricity plans in your state →

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Step 3: Check Your State's Average Rates

Average electricity rates vary significantly by state. Here is a guide for 2026:

State	Avg. rate (c/kWh)	AER reference price
NSW	28.5c	$1,726/year
VIC	27.5c	$1,469/year
QLD	26.8c	$1,589/year
SA	35.2c	$2,120/year
WA	29.1c	$1,680/year
TAS	26.5c	$1,510/year
ACT	25.8c	$1,420/year

If your annual bill is significantly above the reference price for your state, switching plans should be a priority.

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Step 4: Optimise Your Solar Setup

If you have rooftop solar, your energy bill strategy looks different. Key considerations:

• Solar feed-in tariffs: Make sure you are on a plan with a competitive feed-in tariff (currently 6–13c/kWh depending on state and retailer).
• Self-consumption: Use more of your solar during the day to reduce what you buy from the grid.
• Time-of-use tariffs: If you can shift usage to off-peak periods (usually evenings or overnight), time-of-use tariffs can reduce costs.
• Battery storage: A home battery lets you store excess solar generation for use at night, reducing grid imports.

See solar energy plans by state →

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Step 5: Reduce Household Energy Usage

While switching plans has the biggest impact on your bill, reducing your usage compounds the savings:

• Heating and cooling account for 40% of the average Australian household energy bill. Set your thermostat to 18–20°C in winter and 24–26°C in summer.
• Hot water is another major cost. Consider a heat pump hot water system or solar hot water.
• Appliances: Run dishwashers and washing machines during off-peak hours if you are on a time-of-use tariff.
• Lighting: LED globes use up to 75% less energy than halogen alternatives.
• Standby power: Electronics on standby can account for 10% of household energy use. Use power boards with switches.

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Step 6: Review Your Plan Annually

Energy plans change frequently. Retailers regularly update their offers, and new plans that were not available when you last compared may now offer better value.

Set a reminder to review your electricity plan once a year, or whenever you receive your annual electricity bill summary.

Use our free bill calculator to estimate your savings →

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Frequently Asked Questions

How much can I save by switching electricity plans?

Most Australian households can save between $150 and $500 per year by switching from a standard default market offer to a more competitive plan. The actual saving depends on your usage, state, and current plan.

Does switching electricity plans affect my supply?

No. When you switch electricity retailers, your electricity supply is unaffected. You will not experience any outage or interruption. The same poles and wires deliver your electricity — only the bill changes.

What is the AER reference price?

The Australian Energy Regulator (AER) reference price is a benchmark set annually for each state. Retailers are required to show how their plans compare to the reference price. Plans above the reference price are considered above-average cost.

Is it worth switching if I am already on a discounted plan?

Yes. Discounts are calculated off the base rate, which can be high. A plan with a lower base rate and no discount may still be cheaper than a plan with a large discount off a high base rate. Always compare the actual rate (c/kWh) rather than the discount percentage.