For Australian households and small businesses, navigating the electricity market in 2026 requires understanding key price benchmarks, available relief, and the competitive landscape. While the Default Market Offer (DMO) and Victorian Default Offer (VDO) for FY2025-2026 saw increases, the Australian Energy Regulator (AER) has released a draft DMO for FY2026-2027 indicating potential price reductions across most regulated regions from 1 July 2026. The most effective strategy for securing a competitive electricity plan remains actively comparing offers from various retailers.
Australia’s Energy Landscape in 2026
Electricity prices across Australia have experienced significant fluctuations. The Default Market Offer (DMO), set by the AER for New South Wales, South East Queensland, and South Australia, and the Victorian Default Offer (VDO), set by the Essential Services Commission (ESC) for Victoria, act as a safety net and a reference price for standing offers. For FY2025-2026 (1 July 2025 – 30 June 2026), residential DMO prices in NSW rose by 8.5%–9.1%, in SE QLD by 3.7%, and in SA by 3.2%. Similarly, Victoria’s domestic VDO increased by an average of 1.2% to approximately $1,675 for a typical household consuming 4,000 kWh annually.
However, a positive shift is on the horizon. The AER’s draft DMO for FY2026-2027, released on 19 March 2026, proposes potential electricity price reductions for households and small businesses across all regulated regions, driven by lower wholesale electricity, environmental, and retail operating costs. Final DMO prices for the upcoming financial year are expected by 26 May 2026.
The Impact of Wholesale Prices and Gas
Wholesale electricity prices, which constitute 30-40% of your bill, have been volatile. Average spot prices surged from $48.98 per MWh in November 2025 to $152.25 per MWh in January 2026. This volatility is largely attributed to an ageing coal fleet and the significant influence of gas prices. Gas generators often act as the ‘marginal generator,’ setting the spot price for electricity, meaning rising international LNG export prices directly impact domestic electricity costs. While March 2026 saw year-on-year spot price declines across the National Electricity Market (NEM) due to strong renewable generation, global events, such as the Middle East conflict, can quickly introduce uncertainty to gas price expectations.
Average Electricity Bills by State (2026)
Average annual electricity bills vary significantly across Australia due to differing regulations, network costs, and energy mixes. These figures are indicative for a typical household consuming around 4,900 kWh per year.
| State | Average Annual Bill (AUD) | Average Usage Rate (c/kWh) | Daily Supply Charge (AUD/day) |
|---|---|---|---|
| South Australia (SA) | $1,580 | 32.1c | $1.12 |
| Western Australia (WA) | $1,490 | 28.9c | $1.08 |
| New South Wales (NSW) | $1,450 | 28.5c | $1.05 |
| Queensland (QLD) | $1,420 | 27.2c | $1.00 |
| Victoria (VIC) | $1,380 | 26.8c | $1.02 |
| Tasmania (TAS) | $1,340 | 26.2c | $0.98 |
| Australian Capital Territory (ACT) | $1,310 | 25.8c | $0.95 |
Source: EnergyPlans research, 1 April 2026. Estimates based on AER reference data and public market information.
“South Australia remains Australia’s most expensive state for electricity, averaging $1,580/yr — $270 more than the cheapest state (ACT).”
Average bills also vary by household size, with a single-person household averaging $1,377 annually, while a five-person household averages $2,676.
Comparing Retailer Offers: Beyond the Default
While the DMO and VDO provide a safety net, they are rarely the cheapest options available. Most households are on market offers, which are typically 10-25% cheaper than the regulated defaults. Major retailers like Origin Energy, AGL, and EnergyAustralia hold significant market share, but smaller providers such as GloBird Energy, Tango Energy, and Sumo Power often present competitive headline rates.
When comparing plans, look beyond introductory discounts. Consider:
- Usage Charges (c/kWh): The rate you pay for each unit of electricity consumed. These can be flat, or vary by time-of-use (peak, off-peak, shoulder).
- Daily Supply Charges (AUD/day): A fixed daily fee for being connected to the grid, regardless of usage. These typically range from $0.85 to $1.20 per day.
- Controlled Load Rates: Separate rates for appliances like hot water systems or slab heating.
- Solar Feed-in Tariffs (FiTs): If you have solar panels, the credit you receive for exporting excess energy to the grid. In 2026, standard FiTs are generally low, around 3-10 cents per kWh. Victoria no longer has a regulated minimum FiT from 1 July 2025, allowing retailers to set their own rates (not below 0c/kWh). The focus for solar owners has shifted to maximising self-consumption and battery storage to reduce reliance on grid exports. For more on optimising your solar investment, see our guide on Best Solar Panel & Home Battery Financing Options in Australia 2026: Loans, PPAs & Green Mortgages Explained.
- Contract Length & Exit Fees: Understand the terms and conditions.
- Green Energy Options: Many retailers offer plans with GreenPower or carbon offsets.
Indicative Retailer Rates (Early 2026)
| Retailer | Avg. Usage Rate (c/kWh) | Daily Supply (c/day) | Est. Annual Bill (AUD) |
|---|---|---|---|
| AGL Energy | 28.5 | 99 | $1,520 |
| Origin Energy | 29.1 | 101 | $1,560 |
| EnergyAustralia | 30.2 | 105 | $1,620 |
| Red Energy | 29.8 | 98 | $1,580 |
| Alinta Energy | 27.4 | 95 | $1,470 |
Source: EnergyPlans research, early 2026. Rates are indicative averages across major distribution zones and may differ by postcode. Estimated annual bills assume typical residential usage of ~4,800 kWh/year.
Government Energy Relief & Rebates (FY2025-2026)
To help alleviate cost-of-living pressures, the Australian Government extended the Energy Bill Relief Fund in the 2025-26 Budget. Households and eligible small businesses received up to $150 in energy bill rebates between 1 July 2025 and 31 December 2025, applied automatically in two $75 quarterly instalments. This built on the $300 relief for households and $325 for small businesses in FY2024-2025.
Beyond this federal relief, state and territory governments offer various concessions for eligible individuals and households, often for concession card holders. For example:
- NSW: The Family Energy Rebate offers up to $180 annually for eligible households with dependent children.
- ACT: The Electricity, Gas and Water Rebate can provide up to $800 annually for eligible concession card holders.
- Victoria: Has a range of concessions for pensioners and low-income households, which can be explored via the Victorian Energy Compare website or directly with retailers. For more detailed information on specific state-based support, refer to our guide on Centrelink Energy Rebates Australia 2026: Your Guide to Expanded Eligibility & Automatic Bill Relief.
How to Find the Best Electricity Plan in 2026
- Understand Your Usage: Your electricity bill provides a breakdown of your consumption patterns. Knowing your peak and off-peak usage can help you choose a time-of-use plan if it aligns with your habits. For strategies to reduce your overall consumption, particularly during colder months, consider reading How to Cut Your Electricity Bill This Winter in Australia 2026: Strategies After Federal Rebates End.
- Use Government Comparison Sites: These free, independent services are the most reliable way to compare all available plans in your area:
- Energy Made Easy: For NSW, ACT, QLD, SA, and TAS.
- Victorian Energy Compare: For VIC. You will need a recent electricity bill (for your National Meter Identifier number) to get a personalised comparison.
- Check the Reference Price: Retailers are required to show how their market offers compare to the DMO (or VDO in Victoria), making it easier to gauge a plan’s competitiveness.
- Read the Fine Print: Always check the Fact Sheet for any plan, which outlines all charges, terms, and conditions, including conditional discounts or exit fees.
- Review Regularly: Energy plans and pricing change frequently. It’s advisable to compare plans at least once a year, or whenever you receive a price change notification from your retailer. Even if you’re happy with your current provider, contact them and ask if they can offer a better deal.
Bottom Line
In 2026, the Australian electricity market remains dynamic. While FY2025-2026 saw price increases for default offers, the draft DMO for FY2026-2027 indicates potential relief for many households and small businesses. The most significant savings are achieved by moving off standing offers and actively comparing market offers. Utilise government comparison websites like Energy Made Easy and Victorian Energy Compare to find the most competitive plan tailored to your usage and location. Combine this with smart energy consumption habits and leveraging available government rebates to effectively manage your electricity costs.