Battery Boom Delivers Power Bill Drop For 2026/27

The Australian Energy Regulator (AER) has released its final Default Market Offer (DMO) determination for 2026–27, with most households across NSW, South East Queensland and South Australia set to see lower benchmark electricity prices from July.

The DMO acts as a regulated “safety net” price for customers on standing offers in those states. It also serves as the reference price retailers use when advertising market offers.

While rising network charges were expected to place upward pressure on bills, falling wholesale electricity costs — helped by increased wind and battery generation — appear to have outweighed them in most regions this year.

Flat-rate residential DMO prices are set to fall between 3.4% and 7.2% across NSW and South East Queensland, while South Australia is the only region facing a small increase of 1.4%.

Small business customers generally fare better, with benchmark prices falling between 6.8% and 11.3%.

It comes after Victoria’s Essential Services Commission cut the cap on standard electricity offers, with bills set to drop by roughly 5% for homes on the Victorian Default Offer.

Again the savings are bigger for small businesses, at around 6% on average.

Why Are Prices Falling Despite Higher Network Costs?

The fall in wholesale electricity costs comes despite higher network charges across much of the National Electricity Market. Network costs still account for roughly 39% to 54% of typical DMO costs.

But wholesale electricity costs have moved the other way.

According to the AER, wholesale costs fell by between 2% and 14% for the coming financial year, driven by:

• more wind and battery generation entering the system
• less reliance on expensive gas and hydro generation during evening peaks
• lower electricity futures prices
• reduced spot market volatility

Environmental scheme costs also fell sharply, while retailer operating costs eased compared to previous years.

In other words, the cost of producing electricity dropped enough to offset rising grid costs — at least for now.

That said, the AER noted South Australia remained more exposed to network cost increases, contributing to the state’s small residential price rise.

Energy Minister Chris Bowen on Tuesday highlighted the growth of home batteries as key to the DMO drop, in the wake of the federal battery rebate:

“We’re seeing batteries working to what we call flatten the peak. So the biggest pressure on prices is in the night time when coal and gas are called upon more… [saving] the renewables from the middle of the day for the night, that is really putting very significant down pressure on prices,” Bowen said.

Solar Sharer Offer Included In Final DMO

The final determination also cements plans for the Solar Sharer Offer (SSO), which gives households access to three hours of free daytime electricity under regulated conditions.

Retailers with more than 1,000 customers will now need to offer eligible customers a tariff that includes three hours of free electricity in the middle of the day:

• 11am–2pm in NSW and South East Queensland
• 12pm–3pm in South Australia.

The offer includes a daily free usage cap of 24 kWh, with normal time-of-use rates applying outside those periods.

The idea is straightforward: encourage households to shift electricity use into the middle of the day when rooftop solar generation is abundant and wholesale prices are often extremely low — or even negative.

It’s another sign the market operator and regulators increasingly want consumers to help absorb excess daytime solar generation rather than simply curtail it.

The DMO Is Still Not The Cheapest Deal

The AER continues to stress the DMO is not intended to be a competitive market offer. Only around 8% of households remain on standing offers, with most customers already on discounted market plans.

Still, the DMO matters because it influences the reference prices retailers use in advertising, and because it provides a benchmark against which other offers are measured.

This year’s determination also introduces tariff caps for the first time, limiting not just annual bills but also maximum daily supply charges and usage rates. The change should make retailer pricing easier to compare line-by-line, particularly for households trying to navigate an increasingly complex mix of flat-rate, time-of-use and solar-style offers such as the Solar Sharer Offer.

For more, read our guide on the ways home batteries cut energy bills and how to choose the right one.