Power Bills Set to Drop Up to 10% From July: What to Check Before Then

Electricity prices on Australia's east coast are set to fall from July, with the energy regulator proposing cuts of up to 10% for households and 21% for small businesses. It's the first meaningful bill relief in years, and it's being driven by renewables.

The Australian Energy Regulator (AER) released its draft Default Market Offer for 2026–27 last week, covering NSW, south-east Queensland and South Australia. The proposal points to lower wholesale costs, thanks largely to increased wind generation, battery storage and falling electricity contract prices.

What the numbers look like

The savings vary by region. Households in south-east Queensland could save around $216 a year, while NSW customers on the Essential Energy network could see bills drop by $226. Small businesses in NSW could save more than $1,300 annually, a significant reduction for operators already dealing with rising fuel and finance costs.

Victoria's Essential Services Commission has proposed a separate 3% reduction under its own default offer, translating to about $46 less per year for the average household.

These are default offer prices: the maximum a retailer can charge customers who haven't actively shopped around. The AER says about 8% of households and 15% of small businesses are still on these plans. If you're on a competitive market offer, you may already be paying less, but the benchmark drop signals relief across the board.

The new Solar Sharer Offer

From July, a new opt-in tariff called the Solar Sharer Offer will give households three hours of free electricity during peak solar hours: 11am to 2pm in NSW and Queensland, noon to 3pm in South Australia.

You don't need solar panels to sign up. You just need a smart meter. The idea is simple: shift energy-hungry tasks like running the dishwasher, doing laundry or heating water into the free window, and your bill drops further.

The catch is that rates outside those hours are slightly higher than the standard default offer. So it works best if you can genuinely shift usage into the middle of the day.

The catch: the Middle East

AER chair Clare Savage was clear that the draft doesn't yet account for the impact of the Iran conflict on global energy markets. Australia's electricity system still relies on gas and coal for a significant share of generation, and both are exposed to international price swings.

Gas made up 4.5% of electricity production in 2025, down from 6.6% in 2022. Coal dropped from 58.3% to 51.9% over the same period. The trend is heading in the right direction, but the system isn't immune to a sustained oil and gas price shock.

The AER will make its final determination in May. If global energy prices stay elevated, some of the proposed savings could be wound back.

What to do now

Don't wait for July to act. The default offer is a safety net, not the best deal available. The AER says some market offers are already up to 23% below the default price.

Check whether you're on a standing offer or a market offer. If you don't know, you're probably overpaying. Compare plans through the government's Energy Made Easy website. If you have a smart meter, look into whether the Solar Sharer Offer could work for your household.

For small business owners, the potential savings are even bigger. Review your energy contract, check when it expires, and get quotes before July. A 21% reduction on the default price means competitive market offers could be even sharper.

Update, May 2026: the AER's final determination, published on 26 May 2026, landed lower than this draft. Flat rate prices for the year from 1 July fell 3.4% to 5.0% for NSW households and 7.2% in south-east Queensland, while South Australian household prices rose 1.4%.

This article is general information only and is not financial advice.