Australia is producing more renewable energy than ever. Solar farms and wind turbines are now supplying a large portion of the electricity that powers homes and businesses. The system is shifting, yet power bills haven’t dropped in the way many expected. In some cases, they’ve gone up.
Electricity prices are set to rise from 1 July 2025 for customers on standing offer plans. In New South Wales, households will see the biggest increases, between 8.3% and 9.7%. In South Australia, the rise will be between 2.3% and 3.2%, and in South East Queensland, between 0.5% and 3.7%. Small businesses across these states can expect price hikes ranging from 0.8% to 8.5%, depending on their region.
In Victoria, the new Default Offer will also take effect from 1 July 2025 through to 30 June 2026. These changes will bring a 1 per cent increase for average residential bills and a 3 per cent rise for small business customers.
This raises an important question. If renewables are cheaper to run, why are households and small businesses still paying more?
It helps to look beyond generation costs. The price you pay includes many layers: wholesale prices, infrastructure charges, geopolitical considerations, global fuel costs, and retailer margins. These combined factors explain why the move to cleaner energy hasn’t brought down bills across the board.Â
Here’s how the new prices compare by state and distributor:
The Cost of Power Has Changed
Wind and solar are now the cheapest ways to generate electricity in Australia. Once a system is in place, it doesn’t require fuel in the traditional sense. There’s no digging or shipping. The sun and wind do the work.
As a result, renewable energy systems are less expensive to run and their costs continue to fall. The Australian Energy Market Operator (AEMO) and other industry reports have confirmed that new wind and solar projects now offer a lower cost per unit than new coal or gas.
This shift is clear. The more clean energy enters the grid, the more it helps ease wholesale prices. That’s good news; however, wholesale savings are only one part of the picture.
Australia’s Energy Supply Is Becoming Cleaner
The amount of clean energy in our national grid has increased. Reports show that each quarter, around half of Australia’s electricity is produced from renewable sources. On some days, that number can rise above 75 per cent. This was unheard of a decade ago.
The change didn’t happen overnight. It’s the result of growing investment in renewable energy in Australia, which is committed to the long term. This includes solar installations, wind farms, large-scale batteries, and upgrades to transmission systems.
This transformation is still underway, however, it’s already having an effect on the structure of the electricity supply.
What’s Causing the High Energy Bills?
Power bills are not only shaped by how electricity is generated. This is one part of a much bigger system.
More than 80 per cent of the gas produced in Australia is exported. This means local prices are linked to global gas markets. When international prices rise, so do ours, even if the gas is generated locally.
Our electricity system still relies heavily on coal plants, many of which are aging. When these plants go offline for maintenance or break down unexpectedly, it reduces supply and increases prices.
Retailers also include extra costs in their pricing. These cover infrastructure use, distribution, maintenance, and their profit margins. These charges are in addition to the wholesale cost of electricity.
Even if wind and solar bring down wholesale prices, the savings often don’t reach the end user, at least not immediately.
Clean Energy Still Makes Sense
It’s reasonable to ask if the energy transition is paying off as the full benefits take time.
A power grid based on renewable energy is more stable and less vulnerable to shocks. Wind and solar don’t rely on international fuel markets. They don’t face the same risks from global events or price swings.
Over time, this stability helps reduce power bill costs and smooth out pricing for households and achieving this requires continued investment. More infrastructure, storage, and competition in the retail market are required
There Are Ways to Reduce Energy Costs Now
Households don’t need to wait for significant changes in policies to take action. One of the simplest ways to take control is to compare energy providers.
Many customers are still on old standing offers or legacy plans. These can be much more expensive than what’s currently available. Retailers are constantly changing their offers. Sometimes, they reserve their best rates for new customers.
CheapBills makes comparing electricity and gas plans easy. You can look at different plans side by side. You can check which ones support renewable energy or have lower fixed charges. The process is quick, and switching is often simple.
Choosing a better plan can lower power bill costs over the year. Even small savings add up.
The Path Forward
Australia’s renewable energy system is in transition. Prices remain high today due to global markets, old infrastructure, and layered costs. The shift to clean power is the right path forward.
More renewables mean less fuel dependency, a more stable supply, and better long-term pricing. With the right tools, households can take part in this shift, starting with choosing a plan that works better.
CheapBills is here to help. You can compare energy providers, switch energy plans, and save money. It’s one of the easiest ways to cut your costs and support a more reliable energy future.
