Australian households and businesses can anticipate further reductions in electricity costs over the coming years, with a new report from the CSIRO and the Australian Energy Market Operator (AEMO) confirming that renewable energy, supported by battery storage, remains the lowest-cost pathway for the nation’s energy system. Released on July 14, 2026, the GenCost 2025-26 Final Report provides a definitive outlook, projecting average National Electricity Market (NEM) generation prices to fall significantly by 2030.
This authoritative assessment underscores the critical role of rooftop solar and grid-scale batteries in driving down wholesale electricity prices and stabilising the grid against global energy shocks. It also highlights a growing divergence in cost trajectories, with fossil fuel generation becoming more expensive due to rising global demand, particularly for gas turbines to power data centres.
Wholesale Prices Set to Drop by 2030
The report reveals that the average NEM generation price stood at approximately $104 per megawatt-hour (MWh) in 2025, a substantial decrease from the peak of $189/MWh recorded in 2022. This reduction was largely driven by the increasing penetration of renewables and the subsequent decline in high global gas prices. Looking ahead, market expectations, based on electricity futures, indicate that generation costs could further fall to between $80 and $90/MWh by 2030.
“Renewables supported by storage remain the lowest-cost generation investments for Australia’s future electricity system to achieve net zero, with solar PV and onshore wind projected to supply 93 per cent of electricity by 2050.”
This forecast provides a strong signal for continued investment in renewable energy projects, particularly solar and wind, which are projected to supply an overwhelming 93 per cent of Australia’s electricity by 2050 under a net-zero scenario.
Batteries: The Key to Stability and Savings
Battery storage is emerging as an increasingly vital component of Australia’s electricity market. The GenCost report explicitly states that lower battery costs and significant new capacity are enabling storage to compete effectively with traditional gas peaking generation. This competition is directly contributing to lower peak evening electricity prices, a crucial benefit for consumers as they transition away from fossil fuels.
The federal government’s Cheaper Home Batteries Program, which offers an upfront discount of approximately $252 per usable kilowatt-hour (kWh) for eligible battery systems, continues to incentivise household adoption. This support is making home battery systems more financially viable for a growing number of Australians. Integrating a home battery with an existing solar system allows homeowners to store excess daytime solar generation for use during evening peak demand periods, significantly reducing reliance on grid electricity and maximising savings.
While the federal rebate value has seen some adjustments, with a faster reduction over time and reduced funding for larger batteries from May 1, 2026, the program’s overall funding increased from $2.3 billion to $7.2 billion, signalling strong government commitment. Homeowners considering a battery installation can still benefit substantially, with an expected saving of approximately $3,528 off a standard 14 kWh home battery.
The Diverging Cost of Energy Sources
The GenCost report highlights a clear trend: the cost of renewable energy technologies, particularly solar and batteries, continues to decline. Conversely, fossil generation technology costs are on the rise. This is largely attributed to increasing global demand for gas turbines, driven by the expanding needs of international data centres.
This cost divergence reinforces the economic imperative for Australia to accelerate its transition to a renewables-dominated grid. By investing in solar and storage now, Australia is not only working towards its net-zero emissions targets but also insulating its economy from volatile international fossil fuel markets.
| Technology | Average NEM Generation Price (2022) | Average NEM Generation Price (2025) | Projected NEM Generation Price (2030) |
|---|---|---|---|
| Overall NEM Average | ~$189/MWh | ~$104/MWh | ~$80-$90/MWh |
This shift means that every dollar invested in renewable generation and storage capacity is a step towards a more affordable and secure energy future for Australia. For those considering a solar installation, understanding these long-term trends is crucial. More information on Solar System Installation Costs in Australia 2026: A Complete Guide can help homeowners plan their investment. Furthermore, strategies to Maximise Your Solar Savings in Australia 2026: Unlock $1,500+ Annually with Smart Strategies become even more pertinent as the energy landscape evolves.
By 2050, the report projects that all new electricity generation technologies will cost more than $100/MWh as ageing infrastructure is replaced across the system. This long-term outlook reinforces the value of investing in durable, low-operating-cost renewable assets today.