Many Australian households are receiving an unexpected jolt to their electricity bills this July, with rising daily supply charges and plummeting solar feed-in tariffs (FiTs) offsetting the widely publicised Default Market Offer (DMO) price reductions. While the Australian Energy Regulator (AER) announced average price falls for most customers on default plans, market offers from major retailers are revealing a more complex and often costlier reality for consumers.
Effective 1 July 2026, the AER’s final DMO determination saw residential flat rate standing offer prices decrease by 3.4% to 5.0% in New South Wales and 7.2% in South East Queensland. Victoria’s Essential Services Commission also announced an average 5% reduction for residential customers on the Victorian Default Offer (VDO). However, South Australian households on flat rates experienced a modest 1.4% increase.
Retailers Shift Costs: The Rise of Daily Supply Charges
Despite these benchmark reductions, reports from customers and industry analysis indicate that major retailers, including AGL, Origin Energy, and EnergyAustralia, have significantly increased daily supply charges on their market offers. This strategic shift means that even if per-kilowatt-hour (kWh) usage rates have decreased, the fixed daily cost of simply being connected to the grid has climbed.
Federal Energy Minister Chris Bowen last week expressed concern over this trend, stating that some companies were choosing to “increase their fixed supply costs while reducing their per-kilowatt hour costs.” He has requested that both the AER and the Australian Competition and Consumer Commission (ACCC) investigate these practices to ensure fair pricing.
This change disproportionately affects households with lower energy consumption, who may find their overall bills increasing despite using less electricity. For example, some NSW customers have reported significant increases in daily supply charges, which can negate any savings from reduced usage rates.
Solar Households Hit by Plummeting Feed-in Tariffs
Compounding the bill shock, solar households are facing substantial reductions in feed-in tariffs (FiTs) from 1 July 2026. These are the credits solar owners receive for exporting surplus electricity back to the grid. Several major retailers have implemented steep cuts:
| Retailer (Region) | Old FiT (c/kWh) | New FiT (c/kWh) | Change (c/kWh) |
|---|---|---|---|
| AGL (Standing Offer) | Varies | 0.0 | Significant Reduction |
| EnergyAustralia (NSW) | 4.0 | 3.0 | -1.0 |
| Momentum Energy (NSW) | 5.0 | 3.0 | -2.0 |
| Momentum Energy (QLD) | 2.9 | 2.0 | -0.9 |
| Momentum Energy (SA) | 2.5 | 0.8 | -1.7 |
| Ergon Energy (Regional QLD) | Varies | 6.006 | Reduction |
These reductions mean solar owners will earn less for the energy they export, increasing their reliance on consuming their own generated power or drawing from the grid at higher rates.
“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. The reductions compared to last year reflect easing cost pressures in parts of the electricity supply chain… However, customers should always shop around to ensure they are on the best possible deal.” — Clare Savage, AER Chair (May 2026)
While wholesale electricity prices have eased due to increased renewable energy generation and battery storage, this benefit is not fully translating to lower bills for all consumers due to retailer adjustments.
New Solar Sharer Offer: A Potential Mitigation
For smart meter customers, a new opt-in “Solar Sharer Offer” became available from 1 July 2026. This initiative provides three hours of free electricity daily during the middle of the day, typically when solar generation is at its peak. This could allow households to cut power bills by shifting high-usage activities into this free-power period. The offer has a daily cap of 24 kWh of free electricity and is available to both homeowners and renters with smart meters, regardless of whether they have solar panels.
This new tariff structure highlights the growing importance of understanding and leveraging time-of-use (ToU) tariffs to manage energy costs. For guidance on maximising these opportunities, see our detailed guide on Slash Your 2026 Peak Electricity Charges by Up To 70%: Your Daily ToU Tariff Playbook.
What About Other States?
While the DMO applies to NSW, South East Queensland, and South Australia, other states have also seen price adjustments. In the ACT, ActewAGL’s regulated standing offer tariffs increased by an average of 2.7% from 1 July 2026, translating to an annual bill increase of approximately $64 for an average residential customer. This rise was attributed to higher network costs and government policy expenses, despite a decrease in wholesale electricity purchase costs.
Western Australia’s Synergy also implemented changes to regulated electricity tariffs, fees, and charges for businesses from 1 July 2026.
Navigating Your Bill: Act Now
The current market conditions underscore the importance of active engagement with your energy plan. The DMO and VDO are safety nets, not necessarily the cheapest available options. Many competitive market offers exist below these benchmarks.
Consumers are strongly advised to:
- Review your latest bill: Understand your daily supply charge and usage rates. Compare them against previous bills and the DMO/VDO reference prices.
- Shop around: Use government comparison websites like Energy Made Easy to compare market offers from different retailers. Even if your current retailer’s standing offer has reduced, a market offer from a competitor might provide greater savings. For more on optimising your energy plan, read Slash EV Charging Costs by Up To $800/Year: Best Electricity Plans in Australia 2026.
- Consider the Solar Sharer Offer: If you have a smart meter, investigate if the Solar Sharer Offer aligns with your consumption habits, especially if you can shift significant energy use to midday. More information can be found in our Unlock $800+ Savings: Your Smart Meter Guide for Australia 2026.
- Utilise concessions: Check your eligibility for state and territory government energy bill relief and concession programs. The universal federal Energy Bill Relief Fund ended on 31 December 2025, but targeted state programs continue.
The disparity between announced price cuts and the reality of many household bills highlights the need for vigilance in Australia’s evolving energy market. Checking your plan and actively seeking better deals remains the most effective strategy to manage costs.