Millions of Australian households and small businesses are set to experience reductions in their electricity bills from 1 July 2026, following the release of the Australian Energy Regulator’s (AER) final Default Market Offer (DMO) and the Victorian Essential Services Commission’s (ESC) final Victorian Default Offer (VDO) decisions this week. These announcements provide a crucial update on energy costs for the upcoming financial year, offering a mix of price cuts across most regions, though South Australia will see a modest increase for residential customers.
AER Finalises Default Market Offer for NSW, SE QLD, and SA
On 26 May 2026, the AER confirmed that electricity prices for customers on standing offers in New South Wales, South East Queensland, and South Australia will change from 1 July. The DMO serves as a safety net for customers who haven’t switched to a market offer and acts as a reference price, helping consumers compare different electricity plans.
Across New South Wales, residential flat rate standing offer prices are projected to decrease by between 3.4% and 5.0%, equating to annual savings of approximately AUD$66 to AUD$137. Small business customers in NSW can expect even larger reductions, with prices falling between 9.0% and 11.3%, saving them AUD$432 to AUD$705 per year.
South East Queensland households will see a notable 7.2% decrease, cutting around AUD$155 from their annual bills, while small businesses in the region will benefit from a 10.4% reduction, saving approximately AUD$445.
However, South Australian residential customers on the DMO will face a modest 1.4% increase, adding around AUD$33 to their annual bills. In contrast, South Australian small businesses will experience a 6.8% decrease, saving AUD$379 annually. The AER attributed these varied outcomes to easing costs across the energy supply chain, including wholesale energy costs and retail operating expenses.
“Electricity prices will fall for most households and small businesses on the Default Market Offer (DMO) from 1 July, with the AER today releasing its final prices for 2026-27.”
In a new development, the AER also announced that, for the first time, retailers will be required to offer a default Solar Sharer Offer. This opt-in energy plan, available to customers with smart meters, provides three hours of free electricity daily in the middle of the day. This initiative aims to help more households, including those without rooftop solar, leverage Australia’s abundant solar generation and potentially reduce their bills by shifting usage to these periods.
Victoria’s VDO Delivers Further Reductions
Just days prior, on 24 May 2026, the Victorian Essential Services Commission (ESC) released its final Victorian Default Offer (VDO) for 2026–27, confirming further reductions for the state’s households and small businesses. The VDO, Victoria’s regulated electricity price, will be, on average, 5% lower for households, cutting approximately AUD$84 off their annual electricity bills. Small businesses in Victoria will see an average 6% reduction, saving them around AUD$241 per year.
These reductions are even greater than initially projected in the draft VDO released in March. Approximately 512,000 households and 62,000 small businesses currently on the VDO will directly benefit from these price cuts when the new rates commence. The VDO also acts as a reference price for other market electricity rates, encouraging private energy retailers to pass on similar reductions to their customers from 1 August this year.
Victoria has consistently maintained some of the lowest energy prices in the country, a trend the state government attributes to its significant investment in renewable energy and energy efficiency upgrades, such as the Victoria Energy Upgrades program.
What These Changes Mean for Your Energy Bill
The combined impact of the AER’s DMO and Victoria’s VDO decisions signals a period of easing energy costs for many Australians. These regulated offers provide a baseline, but active engagement with the market remains crucial for maximising savings. Households and businesses are encouraged to compare their current plans against these new default prices and explore competitive market offers. For guidance on navigating your options, consider reading our guide on the Best Electricity Plans in Australia 2026: A Comprehensive Guide for Households to Cut Costs.
While wholesale energy costs have eased, the importance of energy efficiency and distributed energy resources like solar and batteries continues to grow. These technologies can help consumers further reduce their reliance on grid electricity and take advantage of new programs like the Solar Sharer Offer. For those interested in understanding broader support, our Navigating Australian Energy Bill Relief and Utility Costs in 2026: Your Essential Guide provides comprehensive information.
Price Changes Overview (July 2026)
| Region | Residential Flat Rate Change | Annual Household Saving/Increase | Small Business Change | Annual Small Business Saving/Increase |
|---|---|---|---|---|
| New South Wales | -3.4% to -5.0% | AUD$66 to AUD$137 savings | -9.0% to -11.3% | AUD$432 to AUD$705 savings |
| South East QLD | -7.2% | AUD$155 savings | -10.4% | AUD$445 savings |
| South Australia | +1.4% | AUD$33 increase | -6.8% | AUD$379 savings |
| Victoria (VDO) | -5.0% (average) | AUD$84 savings | -6.0% (average) | AUD$241 savings |
These updated prices reflect ongoing shifts in the energy market, driven by increasing renewable energy generation and evolving regulatory frameworks designed to ensure fairness and affordability for all Australians. As the energy landscape continues to transform, staying informed about policy changes and market offerings remains key to managing your energy expenditure. For those with batteries or considering them, exploring options like Virtual Power Plant (VPP) programs can also yield significant savings. Unlock $1,000+ Annually: Best Home Battery VPP Programs in Australia 2026 Ranked