Millions of Australian households and small businesses are seeing significant shifts in their electricity bills from July 1 and August 1, 2026, as new Default Market Offer (DMO) and Victorian Default Offer (VDO) prices take effect across the National Electricity Market (NEM). While most states will experience reductions, South Australian residential customers on standing offers face a modest increase, highlighting the varied impact of evolving energy market dynamics.
The Australian Energy Regulator (AER) finalised its 2026-27 DMO determination on May 26, 2026, impacting New South Wales, South East Queensland, and South Australia. Similarly, Victoria’s Essential Services Commission (ESC) announced its 2026-27 VDO on May 25, 2026, with market offers reflecting these changes from August 1, 2026. Regional Queensland’s regulated prices, set by the Queensland Competition Authority (QCA), also adjusted from July 1, 2026.
These adjustments come amidst a broader trend of falling wholesale electricity prices, driven by increased renewable generation and battery storage across the country. According to the International Energy Agency (IEA), Australia’s wholesale electricity prices were approximately 45% lower in the second quarter of 2026 compared to surging prices in Europe and Japan, primarily due to the rapid shift towards renewable energy.
“This is a positive outcome with prices coming down for the majority of households and all small businesses across the three regions where the DMO safety net applies,” AER Chair Clare Savage said on May 26, 2026, noting that the reductions reflect easing cost pressures in parts of the electricity supply chain.
State-by-State Breakdown: Who Saves and Who Pays More?
The impact of the 2026-27 DMO and VDO varies considerably by state and customer type:
New South Wales
Households and small businesses in New South Wales will generally see reductions in their electricity bills. For residential customers on flat-rate standing offers, prices are set to fall between 3.4% and 5.0%, equating to annual savings of AUD $66 to AUD $137. Those with smart meters on time-of-use standing offers could save between 3.7% and 7.7%, or AUD $72 to AUD $211 annually.
Small businesses are set for more substantial relief, with flat-rate standing offer prices decreasing by 9.0% to 11.3% (annual savings of AUD $432 to AUD $705). For small businesses on time-of-use tariffs, reductions range from 9.4% to 20.9%, potentially saving them AUD $449 to AUD $1,303 per year.
Queensland
Queensland residents and businesses are among the biggest beneficiaries of the new pricing structure. In South East Queensland (SEQ), residential customers on flat-rate DMO plans will see a 7.2% reduction, saving a typical household about AUD $155 per year. Those with smart meters on time-of-use plans will experience the largest rate drop, up to 10.7%, saving approximately AUD $229 annually. Small businesses in SEQ can expect reductions of 10.4% to 14.0%, translating to annual savings of AUD $445 to AUD $601.
Regional Queensland, regulated by the QCA, will also see power costs fall. Households on Tariff 11 can expect prices to drop by around 7%, saving a typical household approximately AUD $212 per year. Small businesses in regional areas will also benefit from an 8.1% decrease in power costs.
South Australia
South Australia stands as the exception to the general trend of price reductions. Residential customers on flat-rate standing offers will see a modest increase of 1.4%, adding approximately AUD $33 per year to their bills.
However, not all South Australian customers will face increases. Residential customers with smart meters on time-of-use standing offers will see a slight decrease of 1.1% (saving AUD $25 annually). Small businesses in South Australia will also experience significant reductions, with flat-rate standing offers falling by 6.8% (saving AUD $379 per year) and time-of-use offers dropping by 12.1% (saving AUD $673 per year).
Victoria
Victorian households and small businesses on the VDO will also enjoy lower electricity costs. For households, the VDO will be 5% lower than the previous year, cutting an average of AUD $84 off their annual electricity bill. Small businesses will see an average reduction of 6%, saving them approximately AUD $241 annually.
These VDO changes, effective from July 1, 2026, serve as a reference price, compelling private energy retailers to pass through similar reductions to customers on market offers from August 1, 2026.
New Solar Sharer Offer for Queensland
A significant new initiative introduced in Queensland from July 1, 2026, is the Solar Sharer Offer. This mandatory opt-in plan for smart meter users in both South East Queensland and regional Queensland provides three hours of free electricity daily between 11:00 AM and 2:00 PM. This aims to encourage consumers to utilise power during peak solar generation periods, even for homes without rooftop solar.
“The most exciting change hitting Queensland on July 1 is the introduction of the mandatory Solar Sharer Offer. To encourage consumers to use power when solar energy generation peaks, eligible retailers must offer this opt-in plan to smart meter users.”
This offer represents a tangible benefit for consumers looking to maximise their energy savings by shifting consumption to periods of abundant and cheap renewable energy. Understanding and utilising such smart tariffs can significantly reduce overall electricity costs. Charge Your EV for Under $5: Best Times in Australia 2026 with Solar & Smart Tariffs
What This Means for Your Bill
While DMO and VDO prices act as a safety net for customers on standing offers and as a benchmark for market offers, most Australians are on market contracts. Your individual bill will depend on your specific retailer, tariff, usage patterns, and network area. Energy retailers generally adjust their market offers in response to DMO/VDO changes, but the timing and extent of these adjustments can vary.
Consumers are encouraged to actively compare energy plans to ensure they are on the most competitive offer, as households on default plans can often overpay by hundreds of dollars annually compared to the cheapest market offers available. Utilising resources like the AER’s Energy Made Easy or Victorian Energy Compare can help you assess your current plan against available market offers. Energy Plans No Lock-In Contracts Australia 2026: Complete Guide
Investing in energy-efficient home upgrades or a Best Home Energy Management Systems in Australia 2026: Slash Bills by $1,000+ Annually can also provide long-term savings, further insulating you from future price fluctuations.
Annual Electricity Bill Changes for 2026-27 (Standing Offers)
| State/Region | Customer Type | Flat Rate Change (Avg.) | Annual Impact (AUD) | Time-of-Use Change (Avg.) | Annual Impact (AUD) |
|---|---|---|---|---|---|
| New South Wales | Residential | -3.4% to -5.0% | -$66 to -$137 | -3.7% to -7.7% | -$72 to -$211 |
| Small Business | -9.0% to -11.3% | -$432 to -$705 | -9.4% to -20.9% | -$449 to -$1,303 | |
| South East Queensland | Residential | -7.2% | -$155 | -10.7% | -$229 |
| Small Business | -10.4% | -$445 | -14.0% | -$601 | |
| Regional Queensland | Households (Tariff 11) | ~-7% | ~-$212 | N/A | N/A |
| Small Business | -8.1% | N/A | N/A | N/A | |
| South Australia | Residential | +1.4% | +$33 | -1.1% | -$25 |
| Small Business | -6.8% | -$379 | -12.1% | -$673 | |
| Victoria | Households | -5% | -$84 | N/A | N/A |
| Small Business | -6% | -$241 | N/A | N/A |
Note: Figures are averages for standing offers. Actual savings or increases may vary based on individual consumption, tariff type, and retailer. Regional Queensland small business annual impact not specified in sources.