The average Australian household spends $1,900 to $2,500 per year on electricity depending on the state. Most households are paying $300 to $800 more than they need to, not because they are using too much power, but because they are on the wrong tariff with the wrong retailer.
Here are the specific reasons bills run high and the actions that actually move the number.
When you move into a property and do not actively choose a retailer, the network connects you to the "standing offer" from the local distribution area's default retailer. Standing offers are legally required to be available to all customers, but they are not required to be competitive. In practice, they are almost always the most expensive tariff in the market.
The gap between a standing offer and the best market offer in the same network area is typically $400 to $800 per year for an average household. This gap exists purely because the household has not switched. Nothing about their usage or property causes it — it is an inertia tax.
Check your bill for the words "standing offer" or "default offer." If either appears, you are almost certainly paying more than the competitive market rate. This is the single quickest fix.
Your electricity rate is expressed in cents per kilowatt-hour (c/kWh) and appears on your bill. Common retail tariff rates in 2026: NSW, QLD, SA, ACT: 28 to 38 c/kWh for competitive plans; 35 to 45 c/kWh on standing offers. Victoria: 22 to 32 c/kWh for competitive plans. Standing offers in Victoria are regulated by the Essential Services Commission, but Victorian standing offers are still above competitive rates.
If you are paying above 35 c/kWh in NSW, QLD, or SA on a market offer, or above 28 c/kWh in Victoria, you are on a plan with room to improve. Use energymadeeasy.gov.au (NSW, QLD, SA, ACT) or Victorian Energy Compare (VIC) to see what the current market offers for your address and usage profile.
Many households sign up for "GreenPower" or renewable energy add-ons when they first join a retailer, pay a premium, and then forget it is there. GreenPower costs an additional 2 to 8 c/kWh on top of base rates. If you are paying for GreenPower and do not know why, check your bill details. Australia's grid is becoming increasingly renewable regardless of your specific GreenPower status — in many cases, the premium is for certification rather than a material difference in the energy you consume.
Your bill has two components: the usage rate (c/kWh) and the daily supply charge (a fixed fee per day simply for being connected, typically 70 to 120 cents per day regardless of usage). The daily supply charge is not negotiable with a different retailer — it is set by the network distributor. But the usage rate and the total plan cost, including what discount applies off the reference price, is negotiable.
The daily supply charge ($250 to $440 per year at typical rates) is a fixed cost you cannot eliminate without disconnecting. Keep this in mind when comparing plans — a plan with a lower usage rate and higher daily supply charge may or may not beat a plan with a higher usage rate and lower daily supply charge depending on your consumption.
Time-of-use (TOU) tariffs charge different rates at different times of day: typically peak (3pm to 9pm weekdays), shoulder (other daytime hours), and off-peak (nights and weekends). Flat tariffs charge a single rate all the time.
If your household uses most of its power in off-peak periods (evening consumption after 9pm, weekends, overnight), TOU tariffs can be meaningfully cheaper. If you use a lot of power during peak hours (cooking, heating or cooling at 5-7pm), a flat tariff may be better. The government comparison tools can model your usage against both tariff types if you enter your bill data.
Switching electricity retailers is administrative only. There is no interruption to your power supply. The physical infrastructure (poles, wires) is owned by the network distributor, not the retailer — the retailer change is purely a billing relationship. The process takes 10 to 15 business days and involves filling out a short online form with your new retailer.
Before switching, read your current contract for any exit fees. Most residential electricity contracts in Australia do not have exit fees, but some market contracts locked in with discounts do. Check your current retailer's terms before accepting a new offer.
Every state government offers electricity concessions or rebates for eligible households — pensioners, health care card holders, low-income households, and households with specific medical equipment. These concessions are applied through the retailer but are government-funded and available regardless of which retailer you are with. If you are eligible and not receiving a concession, contact your retailer or the state energy concession program directly. Federal Government energy bill relief payments are also available in some years — check energy.gov.au for the current status.
Check what electricity rate you should be paying and how your current plan compares to the market.
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