Australian households and small businesses in New South Wales, South East Queensland, and South Australia could see their electricity bills fall from July 1, 2026, following the Australian Energy Regulator’s (AER) draft determination for the Default Market Offer (DMO) 2026-27. Released on March 19, 2026, the draft decision proposes significant reductions in benchmark electricity prices, driven by easing wholesale costs and new regulatory reforms.
This crucial announcement offers a potential reprieve for consumers after several years of rising energy expenses. The AER’s DMO acts as a safety net for customers on standing offer contracts and serves as a reference price for comparing market offers. The consultation period for this draft determination officially closed on April 9, 2026, with the AER now reviewing feedback ahead of a final decision by May 26, 2026.
Potential Savings for Households and Businesses
The draft determination indicates varied price reductions across different regions and customer types. Residential customers could see annual DMO prices fall by between 1.3% and 10.1%, while small businesses might benefit from even larger decreases, ranging from 7.6% to 21.2%.
“This draft decision points to the potential for some welcome relief for households and small businesses after several years of rising energy costs,” said AER Chair Clare Savage.
These proposed cuts are attributed primarily to lower wholesale electricity costs, reduced spot price volatility, and increased generation from wind and battery sources. Retailers have also reported lower operating costs, and environmental scheme costs have decreased.
Specific regional impacts for residential customers under the draft decision include:
| Region (Distribution Zone) | Proposed Residential Price Decrease | Annual Saving (Approx.) |
|---|---|---|
| New South Wales (Essential Energy) | 8.2% | -$226 |
| New South Wales (Ausgrid/Endeavour) | 2.4% - 4.2% | -$58 to -$103 |
| South East Queensland (Energex) | 10.1% | -$216 |
| South Australia (SA Power Networks) | 1.3% | -$31 |
For small businesses, the savings are even more substantial:
| Region (Distribution Zone) | Proposed Small Business Price Decrease | Annual Saving (Approx.) |
|---|---|---|
| New South Wales (Essential Energy) | 21.2% | -$1,320 |
| New South Wales (Ausgrid/Endeavour) | 7.6% - 10.1% | -$379 to -$505 |
| South East Queensland (Energex) | 12.8% | -$550 |
| South Australia (SA Power Networks) | 15.2% | -$845 |
It’s important to remember these are draft figures, and the final determination in May could see some adjustments. However, the overall trend points towards a positive shift for energy consumers.
Victoria’s Separate Price Review
While the AER sets the DMO for NSW, SE Queensland, and South Australia, Victoria’s Essential Services Commission (ESC) conducts its own review for the Victorian Default Offer (VDO). The ESC’s draft decision for the 2026-27 VDO, also released in March 2026, proposes an average reduction of $46 (3%) for domestic customers and $172 (5%) for small businesses on flat tariffs.
Similar to the AER’s reasoning, Victoria’s proposed decreases are largely due to lower environmental costs and stable wholesale electricity prices. The consultation for the VDO draft decision closed on April 10, 2026, with a final decision expected by May 24, 2026.
Introducing the Solar Sharer Offer (SSO)
A significant new element in the AER’s draft DMO is the introduction of the Solar Sharer Offer (SSO). This opt-in electricity plan, set to commence on July 1, 2026, will require retailers to provide at least three hours of free electricity during the middle of the day.
Designed to leverage Australia’s abundant daytime solar generation, the SSO aims to help households reduce bills by shifting energy-intensive tasks to these free periods. Crucially, customers do not need to have rooftop solar panels themselves to benefit, only a smart meter. This makes the benefits of solar energy accessible to renters and apartment dwellers.
The free usage windows are proposed as 11 am to 2 pm in New South Wales and South East Queensland, and 12 pm to 3 pm in South Australia. The SSO will have the same annual cost as the DMO Time of Use tariff, with free energy during the specified window and slightly higher prices (1 to 4 cents/kWh) at other times.
This initiative not only offers bill savings but also supports grid stability by encouraging the consumption of excess solar power that might otherwise be curtailed. For those looking to maximise savings, understanding how to shift energy use to these periods will be key. This could involve running dishwashers, washing machines, or even charging electric vehicles during the designated free hours. For more insights on optimising home energy, consider guides like Are Heat Pump Hot Water Systems Worth It in Australia 2026? A Guide to Costs, Savings & State Rebates, which can help align appliance use with these new tariff structures.
What This Means for Your Bills in 2026
While the draft decisions point to lower regulated prices, consumers are always encouraged to actively engage with the market. The DMO and VDO serve as benchmarks, but competitive market offers often provide better value. Less than 10% of households and about 15% of small businesses remain on a DMO.
With the final DMO and VDO decisions due in May, Australians should prepare to review their energy plans ahead of July 1, 2026. Even with proposed price reductions, staying on an outdated market offer or a standing offer without comparing could mean missing out on further savings. Articles such as Are You Paying More? How to Beat Australia’s Energy ‘Loyalty Tax’ in 2026 remain highly relevant, urging consumers to shop around for the best deal. The introduction of the Solar Sharer Offer also presents a new opportunity for many to significantly cut their electricity costs by adapting their usage habits to align with peak solar generation. This proactive approach will be crucial in navigating Australia’s evolving energy landscape in 2026.