Energy bills remain a major pressure point for many households, but changes coming next month could bring some relief. However, while lower default prices and free electricity offers may help reduce costs for some customers, it’s still worth comparing your options to see whether a better deal is available.
What’s changing from July?
Lower default electricity prices
From 1 July 2026, new default electricity prices will apply in several parts of Australia, setting the maximum amount retailers can charge customers on standing offers for 2026–27.
These prices are set through the Default Market Offer (DMO) in NSW, SE QLD and SA, and the Victorian Default Offer (VDO) in Victoria. Both are designed to act as a safety net for customers who have not chosen an electricity plan, helping protect them from excessively high energy prices.
For many households, the new default prices will be lower than they were in 2025–26. Customers in NSW, SE QLD and Victoria will pay less on average. In SA, the change depends on tariff type: time-of-use (ToU) customers, who are charged different rates depending on when they use electricity, will see a small decrease, while flat-rate customers, who pay the same usage rate throughout the day, will see a 1.4% increase.
The biggest savings are for time-of-use customers in SE QLD and parts of NSW, where annual bills will fall by more than $200 in some cases.
Here’s how the changes break down:
DMO year-on-year change, 2026–27
| State | Residential flat rate | $ change | Residential ToU | $ change |
|---|---|---|---|---|
| NSW | −3.4% to −5.0% | −$66 to −$137 | −3.7% to −7.7% | −$72 to −$211 |
| SE QLD | −7.2% | −$155 | −10.7% | −$229 |
| SA | +1.4% | +$33 | −1.1% | −$25 |
| Source: AER DMO figures are based on annual usage assumptions set by the Australian Energy Regulator (AER) for each distribution network: Ausgrid (3,900 kWh per year), Endeavour Energy (4,900 kWh per year), Essential Energy (4,600 kWh per year), Energex (4,600 kWh per year) and SA Power Networks (4,000 kWh per year). Actual bill impacts will depend on household usage, tariff type and distribution area. |
||||
VDO year-on-year change, 2026–27
| Residential flat rate change | $ change |
|---|---|
| −3.0% to −8.0% | −$50 to −$160 |
| Source: Essential Services Commission VDO figures are based on an assumed annual consumption of 4,000 kWh for domestic customers on flat tariffs across the five distribution zones: AusNet, CitiPower, Jemena, Powercor and United Energy. Actual savings will vary by household usage and location. |
|
Victoria has updated its time-of-use tariff structure for 2026–27, moving from a two-period model to a three-period setup. Because of this change, ToU results aren’t directly comparable to previous years.
Free midday power
Eligible households will also be able to access free electricity during the middle of the day from July.
In DMO-regulated areas, the new Solar Sharer Offer will provide three hours of power each day for households with smart meters. The initiative is designed to encourage households to use more electricity when solar generation is high, even if they do not have solar panels on their own roof.
The free electricity window will run from:
- 11am to 2pm each day in NSW and SE QLD
- 12pm to 3pm each day in SA
Victoria has also announced its own version, called the Midday Power Saver. This will also offer residents free energy from 11am to 2pm each day, although it will not start until 1 October 2026.
Most energy retailers will be required to make the offer available, but customers will need to opt in by contacting their provider.
For households that can shift some of their electricity use, this could help reduce bills.
In DMO-regulated areas, the Department of Climate Change, Energy, the Environment and Water estimates that households shifting 10% to 30% of their energy use from the evening peak to the free daytime window could save anywhere from around $150 a year for a one-person household changing when they use some appliances, to more than $1,000 for larger households able to move appliances, pool pumps or EV charging into the free period.
Similarly, the Victorian Government estimates households could save between $149 and $428 a year by shifting 5% to 30% of their electricity usage into the free three-hour window, with even greater savings possible for households that can move EV charging into the free period.
Who could be better off?
The DMO and Solar Sharer Offer only apply in NSW, SE QLD and SA, while Victoria has the VDO and the Midday Power Saver scheme. Other parts of Australia (WA, the NT, Tasmania, the ACT and regional QLD) are covered by different electricity pricing arrangements and will not be able to access these specific offers.
For households in eligible areas, savings will depend on their plan, tariff and how easily they can change when they use electricity. Those who may benefit include:
- Customers on standing offers in areas where default prices are falling, as their bills may come down from July without them needing to change plans.
- Households on time-of-use tariffs, particularly if they can avoid using too much power during more expensive peak periods.
- Customers with smart meters, who may be able to opt in to a free midday power offer depending on where they live.
- Households that can move some electricity use into the middle of the day, such as running the dishwasher, washing machine, pool pump or hot water system during the free window.
- EV owners or households with home batteries, who may be able to charge during the free period and reduce how much paid electricity they use later.
Could another energy plan be cheaper?
Yes, while lower default prices and free midday power could bring bills down for some households, that doesn’t automatically make a standing offer or Solar Sharer-style plan the cheapest option.
Standing offers are safety net prices. Some customers will pay less from July, but market offers may still have lower usage rates, cheaper supply charges, better solar feed-in tariffs or discounts.
For example, a South Australian household using 4,000kWh a year on a flat-rate standing offer would have an estimated annual default bill of $2,334 under the 2026–27 DMO. If that household found a market offer 10% below the reference price, that could mean a saving of around $233 a year.
The same goes for free midday power. Three hours of free electricity can be useful, but the rest of the plan still matters. Customers should check what they will pay outside the free window, especially during peak or evening periods. For example, if a plan offers free electricity from 12pm to 3pm but charges higher rates in the evening, it may not deliver the best overall value for a household that uses most of its power after work.
Comparing electricity plans can help households understand whether they’re better off staying on a standing offer, opting into a free midday power deal or switching to another market offer. The cheapest option will depend on the full plan, including usage rates, supply charges, peak pricing and how much electricity can realistically be moved into the free window.
