Millions of Australian households and small businesses are set to see changes to their electricity bills from 1 July 2026, following the final Default Market Offer (DMO) and Victorian Default Offer (VDO) determinations by the Australian Energy Regulator (AER) and the Essential Services Commission (ESC). While most regions will experience price reductions, South Australian households on flat-rate tariffs face a slight increase. Crucially, new “free power” initiatives are also being rolled out, offering significant savings opportunities for customers with smart meters.
Released between May 26 and May 29, 2026, these final decisions outline the maximum prices retailers can charge customers on standing offers across New South Wales, South East Queensland, South Australia, and Victoria. They also serve as a reference price for market offers, influencing competitive plans across the board.
“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,” stated AER Chair Clare Savage. “The reductions compared to last year reflect easing cost pressures in parts of the electricity supply chain.”
State-by-State Breakdown: What to Expect from July 1, 2026
The price changes vary significantly by state and even by tariff type, reflecting regional network costs and market dynamics. The overall trend is driven by falling wholesale electricity costs, largely attributed to increased wind and battery generation, which has offset rising network charges in many areas.
| Region | Customer Type | Tariff Type | Price Change (Average) | Annual Saving/Increase (Average) |
|---|---|---|---|---|
| New South Wales | Residential | Flat Rate | -3.4% to -5.0% | -$66 to -$137 |
| Residential | Time-of-Use | -3.7% to -7.7% | -$72 to -$211 | |
| Small Business | Flat Rate | -9.0% to -20.9% | -$449 to -$1,303 | |
| South East Queensland | Residential | Flat Rate | -7.2% | -$155 |
| Residential | Time-of-Use | -10.7% | -$229 | |
| Small Business | Flat Rate | -10.4% to -14.0% | -$445 to -$601 | |
| South Australia | Residential | Flat Rate | +1.4% | +$33 |
| Residential | Time-of-Use | -1.1% | -$25 | |
| Small Business | Flat Rate | -6.8% to -12.1% | -$379 to -$673 | |
| Victoria | Residential | Average | -5.0% | -$84 |
| Small Business | Average | -6.0% | -$241 |
Small businesses are generally seeing more substantial reductions across all DMO regions, with some NSW businesses on time-of-use tariffs benefiting from cuts exceeding 20%.
New Free Power Offers: Shift Your Usage, Cut Your Bills
For the first time, a Solar Sharer Offer (SSO) will be introduced in DMO regions (NSW, South East Queensland, and South Australia) from 1 July 2026. This opt-in plan will provide eligible customers with smart meters three hours of free electricity in the middle of the day. The free power window is 11 am to 2 pm in NSW and South East Queensland, and 12 pm to 3 pm in South Australia. This initiative aims to maximise the use of abundant daytime solar generation and reduce reliance on more expensive evening peak power. The offer is available even to households without rooftop solar and can be a significant opportunity for those able to shift appliance usage, such as washing machines, air conditioning, or Optimise EV Charging with Solar in 2026: Slash Bills by $1,500+ Annually.
Similarly, Victorian households will benefit from the new Victorian Midday Power Saver, announced by the Victorian Government on May 28, 2026. Available from 1 October 2026, this scheme will also offer a three-hour free power window between 11 am and 2 pm daily. While offering potential bill reductions, the ESC notes that electricity prices outside these hours may be slightly higher, and actual savings will depend on a customer’s ability to shift their energy consumption.
Why are Prices Changing?
The AER’s analysis indicates that a significant surge in renewable energy generation, particularly wind and grid-scale batteries, has played a key role in driving down wholesale electricity costs. These cheaper sources are displacing more expensive gas and hydro generation during peak periods, leading to flatter prices throughout the day. This positive trend in wholesale costs has largely outweighed the increasing network charges observed across much of the National Electricity Market.
Despite these positive changes, the AER and ESC consistently advise consumers that the DMO and VDO are safety net prices, and generally, more competitive market offers are available. Households are strongly encouraged to use independent comparison tools like the AER’s Energy Made Easy website or the Victorian Energy Compare website to find the Best Electricity Plans in Australia 2026: A Comprehensive Guide for Households to Cut Costs that suit their consumption patterns.
For those looking to take greater control of their energy costs, understanding how to leverage these new free power windows, exploring home battery systems to maximise solar self-consumption, and engaging in Virtual Power Plant (VPP) programs can unlock further savings. You can learn more about these opportunities in our guide: Unlock $1,000+ Annually: Best Home Battery VPP Programs in Australia 2026 Ranked.
This latest round of price adjustments and the introduction of innovative demand-shifting offers underscore the ongoing transformation of Australia’s energy landscape, moving towards a more decentralised, renewable-powered grid with greater consumer participation.