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.
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Hopefully not all retailers will be required to introduce the 24kwh limit. Many of us are using more than this fairly regularly.
So how many $billion of $ of taxpayer home battery subsidies has it taken to barely make a dent in retail price. Another Albo/Labor ideological stuffup. No wonder this gen will be the highest taxed in history.
Hi Media,
Australia’s top personal income tax rate is 47%, the same as in the United Kingdom, Germany, Italy and South Korea. The Netherlands, Spain, Portugal and Iceland, Sweden, Belgium, Finland and Israel are all higher. Austria, France, Japan and Denmark are above 55%.
Australia’s total tax take is now among the world’s lowest. This is primarily because the goods and services tax (GST) is just 10%. Equivalent retail sales taxes are above 18% in Germany, the United Kingdom, the Netherlands, Spain, Italy, Belgium, Ireland and elsewhere; and above 24% in Norway, Sweden, Denmark, Finland and Hungary.
Last month’s Fiscal Monitor, published by the International Monetary Fund (IMF), shows taxation relative to GDP for 31 advanced economies.
In both 2025 and 2026, Australia ranked 26th out of the 31 on high tax rates. Only Ireland, Japan, South Korea, Switzerland and the USA were lower.
With all the new batteries added to the network my Amber Bills are increasing. There are no longer the high feed-in tariffs when the network is under stress. In the past most invoices were negative. Now they’re $50/month.
Did they mention connection fees and daily usage fees will go up?
Doubt it, but it will keep happening. To cover their lost revenue from so-called cheaper energy. If we’d stayed with coal the prices would still be low and would have stayed steady
Hi Royce, What’s more reliable than sunrise? Even the Liberal party is claiming credit for it
https://reneweconomy.com.au/five-years-after-blackout-south-australia-now-only-state-with-no-supply-shortfalls/
Tesla big battery at Jamestown has saved SA consumers literally tens of millions of dollars.
Modern coal plants run higher temperatures & pressures, thus they’re less reliable.
https://reneweconomy.com.au/australias-least-reliable-coal-generators-are-the-oldest-and-the-youngest-58717/
Problem with established “reliable baseload” coal plants is the *weather* can force them offline for months causing massive losses.
https://www.smh.com.au/business/companies/coal-power-problems-plunge-energyaustralia-to-1-billion-loss-20230227-p5cnyx.html
https://reneweconomy.com.au/coal-outages-strike-across-two-states-as-power-prices-march-up/
https://www.electranet.com.au/strength-reliability-boost-to-south-australias-electricity-network/
royce N: – “If we’d stayed with coal the prices would still be low and would have stayed steady”
Evidence/data? Newcastle thermal coal (6,000 kcal per kilogram) is currently trading around US$132/tonne. Ten years ago it was around US$48/tonne.
https://tradingeconomics.com/commodity/coal
Specific coal supply constraints in NSW have contributed to sustained high wholesale electricity prices. High international coal prices persist, impacting local generation costs and forcing Australian coal-fired generators to bid higher in the market.
Increased maintenance and reliability issues with aging coal plants can reduce supply and drive up prices.
https://www.aer.gov.au/system/files/2025-06/Q1%202025%20Wholesale%20quarterly%20report.pdf
Burning more carbon-based substances is ‘civilisation suicide!’
https://www.ipcn.nsw.gov.au/sites/default/files/2026-02/Geoff_Miell-PresentationSlides-ChainValleyCollieryConsolidationProject%28SSD-17017460%29-20260216.pdf
Regarding that 3 hours free setting: That wont be sufficient to top up most betteries.
Most battery systems have charging limits that would mean 10 to 15kWh charge for the 3 hour free peiod.
Ok if your solar system system can generate SOME power on a string of rainy days.
But then shifting other loads, (say HWS) onto that time period would help. And also make better use of the free period.
Why is SAs electricity costs going to rise from July and all other states drop! We constantly get the highest electricity orices!
Hi Keryn,
It’s largely about retail & distribution.
Intercast & Forge, Australia’s largest iron foundry, is viable in historically expensive South Australia because of cheap wind and solar power available on the wholesale 5 minute spot market.
(SA has always had high prices because it’s the same footprint as Victoria with 25% of the population. ie there’s fewer customers per kilometre than even Qld)
They know when volatility & high prices are likely, and they’re flexible enough to switch off or do maintenance.
Like farmers they will work Sunday if the weather is right though, because energy is cheap when the wind is blowing.
Domestic users can get cheaper power but they need to be more engaged with time of use.
Thanks. Im as engaged with time of use as i possibly can but that really dies little when it cone to going to work between 9 and 5 and mealtimes etc. I really cannot understand why with millions of hones generating power with solar and giving it away to the power networks why its so expensive. Householders have paid fir the power networks infrastructure and they take our power and sell it. I remember believing the spin that no corporation can own the sun – well be our own power generators and we are…but corporations have changed the rules and stolen that freedom. Thats why ill never join a corporation run public power plant because theyll do the same to that. Were screwed!
Keryn, that’s the price you pay for reliance on gas power and imports. Last evening for instance SA hit over 60% gas power plus more than 20% from imports – brown coal most likely given that was supplying over two-thirds of Victoria’s power at the time.
Yes the wind and solar advocates will insist that for the last year, solar generated over a quarter of all power, and wind contributed almost half the power demanded, but what sets prices isn’t the free power (when it works) but the power that works when nothing else does, and that has to be priced at levels to recover all the losses for when it can’t sell, or has to sell negative.
Worse, if I understand it correctly, the top bid price accepted sets what everyone receives so low bidders like wind or solar can earn a bundle from the little they provide if gas actually is supplying required power. The system is fundamentally broken.
Yes i understand all that. Dont the other states rely on gas and coal too?
Tasmania is hydro, but yes Victoria, NSW, and QLD are all coal reliant, and cheap.
Per OpenElectricity:
Vic 1 Year: 56.8% Coal, 26% Wind, 16.7% Solar, 2.2% Gas, 4% Imports – -$9 to +$532.11 – Av.$47.13
Vic 30 Day: 64.3% Coal, 24.1% Wind, 10.3% Solar, 1.8% Gas, 2.9% Imports – -$1.76 to +$173.14 per MWh – Av. $62.31
Tas 1 Year: 70.6% Hydro, 19% Wind, 1.2% Gas, 7.5% Imports $8.36-$416.13 per MWh – Av. $94.24
Tas 30 Day: 79% Hydro, 13.6% Wind, 0.6% Gas, 5.4% Imports – $79.76 to $120.25 per MWh – Av. $96.11
SA 1 Year: 47.4% Wind, 26.4% Solar, 17.7% Gas, 11.7% Imports – $26.38 to $690.02 per MWh – Av. $120.38
SA 30 Day: 46.4% Wind, 22.4% Gas, 17.1% Solar, 15.4% Imports – -$0.34 to +$152.45 per MWh – Av. $73.45
QLD 1 Year: 61.7% Coal, 25% Solar, 8.6% Wind, 5% Gas, 0.9% Imports – $43.43 to $448.61 per MWh – Av. $80.5
QLD 30 Day: 60.7% Coal, 21.8% Solar, 12.4% Wind, 5.3% Gas, 0.4% Imports – $39.35 to $177.73 per MWh – Av. $73.33
Seems cheapest power goes Vic > QLD > Tas > SA. Coal FtW?
Hi John,
Coal isn’t cheap. Australia hasn’t built a new one in 17 years & the newest already went broke
If you think it’s promoted by moral people then start at the bottom of the links below
Coal is only profitable when it doesn’t have to pay for the damage it does to everyone’s health.
The workers, the nearby residents, the kids downwind, they subsidise coal;
with their very lives.
https://www.adelaidenow.com.au/news/south-australia/port-augusta-is-sas-cancer-hotspot/news-story/d2ed7532527bf669df9666b933dc7cd9
https://www.abc.net.au/news/2019-02-26/dozens-of-new-black-lung-cases-qld-advocates-say/10851482
https://www.newcastleherald.com.au/story/5950821/piper-backs-independent-review-of-damning-lake-macquarie-report/
https://www.theguardian.com/australia-news/2021/jun/29/hazelwood-coalmine-fire-has-had-lasting-health-effects-on-latrobe-valley-residents-study-finds
https://electrek.co/2019/12/18/bob-murray-science-denial-instead-coal-workers-wages-bankrupt/
The last coal fired plant built in Aus was Kogan Creek located on the Darling Downs Qld 6hrs drive west from Brisbane. It sits on the cheapest mined coal in Aus. It was built in only 3 yrs for a rediculously low $1 per MWh. Its also one of the most efficient and the largest single units in the country, 750MW !
The 2nd unit could not be built due to the introduction of an Aus ban on new coal yet it has the coal reserves for another 30 yrs ! The station is located in farmland country nowhere near any population centres. So the issue of exposure to fine particles is irrelevant.
I know that as I was the EGM Asset Management that oversaw the warranty & latent defect period of the new plant in the late 2000s.
Hi Media,
Sounds like you would have some good insight into why coal is history. We haven’t built one in 17 years.
The newest coal plant is in fact Bluewaters. The private owners have torched $1.2 billion because it’s unviable without state government subsidy for the coal miner who went broke after building the plant.
Current operator’s own financials state there is “material uncertainty as to whether Bluewaters can continue as a going concern”
Griffin needs coal prices to nearly double to stay afloat, but an increase large enough to save Griffin would immediately push Bluewaters into losses
Bluewaters carries about A$804 million in borrowings (including A$245 million owed to banks that bought debt at a 71¢ discount), making refinancing & survival highly sensitive to fuel costs & supply certainty
Bottom line is coal is filthy, digging holes isn’t cheap, big steam engines are expensive & the economics for nuclear ones are the worst.
Technically Kogan was commissioned after the first Bluewater unit came online the 2nd unit was indeed after Kogan. I actually visited Bluewater during construction and saw the coal mine to supply it coal as I was in the Alinta-Alcoa JV building cogen gas fired plants inside Alcoas alumina refineries up the road.
The coal mines in WA are no comparison to East coast mines and especially Kogan Creek mine. The WA are thin seamed, poor quality & highly faulted so difficult to process hence expensive. The reserves of better quality coal has long since been exhausted so what feeds Muja, Collie and Bluewater are two mining companies now both on govt life support to keep operating until the end of the service life of both Muja and Collie around 2030.
Renewables and its associated new transmission lines to the prospective mid west region some 500km north east of Perth is a long way behind schedule and probably end up way over budget. So the expensive coal mines need to run a little longer.
Bennett, coal plants aren’t being built is Green-Teal-Labor opposition. No private company is willing to take the risk their multi-million dollar investment is a write off before they’ve even finished construction.
Add to that an energy market designed to give preferential treatment to instant dispatch power over stable energy, & it’s even harder to get private investment.
Now factor in all the subsidies & legislative privileges that solar & wind get. It’s repeatedly said here & elsewhere that renewables are free energy i.e. zero cost ‘fuel’. Sure, when ‘fuel’ is supplied by nature, but they don’t even need to run at a profit. They can sell their power at a loss because their profit margin is based on selling off carbon credit certificates – no that’s not the correct name but I forget the official one.
Coal power is about selling electricity & making profit after costs, while Big Green is about selling credits with electricity a byproduct. The two are fundamentally incompatible.
Hi John,
*Seventeen* years ago the last coal burner built in Australia was privately funded.
It was planned & built under the tail end of Howard’s 12 years in office, notably after he legislated the renewable energy target.
From Bluewaters’ 2006 start, the LNP held office for nearly a decade in total.
It’s already gone broke and relies on state Governement subsidy.
The private foreign owners of the adjacent coal mine have written off their billion dollar purchase.
The economics mean coal is worthless, and it’ll be worse if pollution, like heavy metals in Lake Maquarie for instance, are taxed properly.
Fact is the newest coal plant in Australia will close before 2030.
https://en.wikipedia.org/wiki/Bluewaters_Power_Station
Think what the situation would be without your state’s Big Battery. It was expanded once, but is no longer comparatively “Big”, I figure. Na+ batteries began volume production last December. As scale reduces prices, and the longer cycle life also elevates economy, gridscale batteries must increasingly eat the lunch of gas.
Like PV panel production, battery supply is exploding exponentially. (See graph at https://www.iea.org/commentaries/global-battery-markets-are-growing-strongly-and-so-are-the-supply-risks )
In a decade, the only remaining niche for gas peakers may be cold standby – “Break glass in an emergency”.
Here, the HWS & excavator are charging on 100% rooftop photons, after a grey day yesterday. Ample domestic PV & battery do it all here. A few hundred $B will do wonders for the grid. When we all go BEV, the fuel savings can pay for it – with great foreign exchange benefits.
The ‘FREE’ power during the day is at the expense of us Solar providers that do not have a battery installed. We paid for these rooftop systems and rightly expect to have a return on our investment. But we have been ROBBED because it seems we have no voice at the energy table.
Not everyone can afford the exorbitant price Australian retailers are asking for batteries, nor do we necessarily want the increased fire hazard of having a battery attached to our house.
What do we have to do to be collectively heard? Turn off our inverters en masse at a critically high demand day to get a fair return on our valued contribution?
Have nother look at it. You add a battery and have it pay for itself in about the same time as solar setup did 5y ago by now no matter what you bought, some did under 2y.
I had to spend newrly the top $ thanks to lovely trees nearby and it still paid for itself in 4.5 years.
Then added 2x PW2 batteries, in 2 years half of 1 of them got paid for by not exporting almost anything.
Then get an EV and it just gets better from there.
You can also grab a free 3 plan from say OVO or AGL etc and cover all charging quite nicely, rain or shine.
Batteries pay for themselves well within warranty and you have a whole house UPS and drive for free as a bonus.
What is your battery’s charge capacity?
My 20 kW/h battery has a 3.8 kW charge limit, so 3 hours isnt enough.
Totally agree I have an EV 4 tiered tariff in WA from Synergy that offers 8.5c/kWh from 9am to 3pm to charge my Tesla. I trickle charge during these times when home. $5 for 500km range a bargain.
We also run our applies during these times even cook our main meal during these times to just reheat for dinner or more often enjoy it for lunch and have something light for dinner. From 3pm to 9pm we run a few lights and stream the TV at 55c/kWh for peanutes. Overnight tarriff 11pm to 6am is 18.5c/kWh which I use as backup EV charging if we have done a lot of kms over the week.
Rudolf,
Effective rebellion requires investment, I’m afraid.
Swap the old fossil-burner for a BEV, and you win a FiT on wheels, $1 per kWh. That’s typically the dinosaur-oil replacement benefit.
In order not to be a prisoner of grid market forces, just exit your energy export. Self-consumption ups yield from 6c to 30c or more, but the BEV offers unbeatable return. Drive a lot, and the fuel savings pay off a modest BEV surprisingly fast. The more you drive, the more you save – beat that.
Do the sums!
SA with the most renewables and the most expensive power prices in the country gets an increase. Unbelievable
Hi Stewart,
SA is largely about retail & monopoly privatised distribution.
Just like we had to invent stobie poles because there wasn’t enough timber available, SA has always had high prices. Initially, they burnt coal brought by ship to Pt Adelaide. Then coal was railed (with gauge change at Terowie) from Leigh Ck, which was still 280km from Northern PS once that was built at Pt Augusta.
Even now power is expensive, it can’t not be, because SA’s the same footprint as Victoria with 25% of the population. ie there’s fewer customers per kilometre of wire than even Qld.
However Intercast & Forge, Australia’s largest iron foundry, is viable in historically expensive South Australia because of cheap wind and solar power available on the wholesale 5 minute spot market.
And domestic customers can enjoy low priced power, without transmission costs by using solar behind the retail meter, which is why we’re at the bleeding edge internationally for distributed energy resources.
The 2026/27 Victorian default offer has mandated time of use Tariffs Peak time 4pm to 9pm : off peak all other times ( Controlled loads unchanged. ) Retailers have already introduced the new charges AGL have increased peak rate from about 27 cents per kWh to 37 cents and off peak down to 21 cents per kWh. .Also they have determined peak time is 3.00pm to 9.00pm
A Solar Share 3 hour free period is to be introduced from October 1st naturally during off peak.
I contacted AGL and 2 other retailers. They say this change in Victoria is driven by Distributors such as Powercor, to better manage the grid. I have solar but it’s a bit of a stretch to call this price reduction. It relies on consumers really managing how and when they use power and of course has landed right in the middle of the winter period. I live near Mildura, and a retiree but I don’t envy young families managing this change.
makes no difference how much wind, solar and batteries we have the energy retailers will manipulate the system so successive accounts always go north. I have all my accounts since installing solar that proves it so and with that momentum the future does not fair any better.
I may be paying less per year by having solar but the payback promises are being thoroughly weakened each year to the point solar may eventually be a liability. And of course now they want us to install batteries with the same reason we where told to install solar.
I now do not believe solar, wind and batteries are the long term answer to our energy needs. What it will eventually be will be up to my grandchildren.
Aale,
Unfortunately, the grandchildren will inherit the wind we sow. All that ameliorates the fatal winds and floods is the death-oil replacement that we achieve. Yes, until now, the species rescue effort is barely mole-whacking growing energy consumption, but the transition is exponential – headway is imminent. The peak harm can be clipped … somewhat.
The first AI bubble will burst soon, having served only to promote renewable energy supply, built for bankrupt AI infrastructure. Any later AI resurrection will then ride on exponentially higher renewables output and, crucially, batteries.
Denmark reports unprecedented high May temperatures. Living in Europe or India is not highly advisable from here to 2500, maybe 3000, in summer at least, I suggest. (Unless AMOC slows further) Global heating rate has recently doubled from 0.18°C/decade to 0.36 – another doubling is just normal exponential rise, and looks to give +4°C by 2084.
Knowledgeable folk moved to Tasmania 20 years ago.
Solar exports during the middle of the day is practically worthless. Nobody wants it. There’s so much of it being pumped into the grid that wholesale prices even go negative.
Why would someone buy something from you that nobody wants?
Right now we have a big rain/cloud system over much of NSW and southern QLD. Midday cost per KWh is higher than usual. It sounds bonkers to give away large amounts of free electricity at such times because there is a big shortage. It’s completely different if there is an unwanted surplus that is ‘going to waste’. Let’s get the price signals targeted mor accurately!