Electricity Costs in Australia: State-by-State Breakdown, Gas vs Electric and How to Save

Understanding electricity costs in Australia has never been more important. From 1 July 2025, the Australian Energy Regulator (AER) raised Default Market Offer prices by up to 9.7%, adding as much as $228 to annual bills in parts of New South Wales. Knowing what you pay per kilowatt-hour and how to reduce it is the difference between a manageable bill and a stressful one.

Below we cover per-kWh rates and average quarterly bills for every state, compare gas versus electric heating costs, and review smart plug energy monitors that show you exactly which appliances are draining your wallet. For broader budgeting help, our budget planner tool can help you map out all your household expenses in one place.

Electricity retailers in Australia charge between 24c and 43c per kWh depending on your state, distribution network and tariff type (flat rate versus time-of-use). On top of usage charges you will also pay a daily supply charge of roughly 93c to 107c regardless of how much power you consume.

A useful rule of thumb from Canstar's energy analysis: every 1c/kWh change in your rate adds roughly $73 per year to the bill of a typical household using 20 kWh per day. Here is how each state stacks up.

South Australia consistently records the highest per-kWh rates in the country, driven largely by its reliance on gas-fired peaking plants alongside its substantial wind capacity. Tasmania and the ACT sit at the other end, with hydro and regulated markets keeping usage charges below 27c/kWh.

Western Australia and the Northern Territory operate outside the National Electricity Market, with prices set by government agencies rather than retail competition. While their per-kWh rates look competitive, the lack of plan choice means fewer discounts and switching options.

Per-kWh rates only tell part of the story. Your actual bill depends on total consumption, which varies with climate, household size and whether you use gas for heating and cooking. According to eConnex's 2026 bill analysis, the national average sits at roughly $125 per month or $374 per quarter.

Notice how the ACT has some of the lowest per-kWh rates but the highest annual bills. Canberra's cold winters drive heavier heating use, especially in all-electric homes. Queensland shows the widest range because consumption patterns differ dramatically between tropical north Queensland and the cooler southeast.

According to Finder, 26% of Australians say energy bills cause them financial stress. If you are in that group, the first step is knowing where your electricity goes. That is where energy monitoring smart plugs become genuinely useful, rather than just a tech novelty.

The AER's Default Market Offer (DMO 7) sets a price cap for electricity in NSW, southeast Queensland and South Australia. The 2025-26 determination brought increases of 0.5% to 9.7% for residential customers, driven by rising wholesale energy costs and higher network charges.

Here is how the annual bill increased under DMO 7 for a typical household without a controlled load:

• NSW Ausgrid area (Sydney, Newcastle): up $155 (8.6%) to $1,965 per year
• NSW Endeavour area (Wollongong, south coast): up $188 (8.5%) to $2,411 per year
• NSW Essential area (regional NSW): up $228 (9.1%) to $2,741 per year
• Southeast Queensland (Energex): up $77 (3.7%) to $2,143 per year
• South Australia (SA Power Networks): up $71 (3.2%) to $2,301 per year

In Victoria, the Victorian Default Offer rose a more modest 1%. The takeaway: the DMO is rarely the cheapest plan available. Most retailers offer deals 10% to 25% below it.

The gas versus electric debate is one of the most common energy questions Australian households face, particularly heading into winter. The short answer: it depends on the appliance, not just the fuel.

Gas has a lower per-unit cost than electricity. However, gas is less energy-dense: you need 3.6 megajoules (MJ) of gas to produce the same energy as 1 kilowatt-hour of electricity. So while gas looks cheaper on paper, the appliance efficiency makes all the difference.

According to research by Canstar Blue and Australian Energy Upgrades, here is how the main heating types compare on running cost:

• Electric reverse-cycle air conditioner (split system): 30c to 50c per hour. Modern units achieve a coefficient of performance (COP) of 3 to 5, meaning they produce 3 to 5 times more heat energy than the electricity they consume.
• Gas ducted heater: $1.50 to $2.00 per hour. Powerful and effective in large homes, but significantly more expensive to run, especially in older systems without zone control.
• Electric bar heater or fan heater: 50c to 75c per hour. Cheap to buy but inefficient. These are 1:1 converters (1 kW of electricity produces 1 kW of heat), making them three to five times less efficient than a reverse-cycle split system.
• Gas space heater (flued): 40c to 80c per hour. A reasonable middle ground, but gas prices are trending upward, and unflued models pose indoor air quality risks.

Research from Frontier Economics estimates that a family of four consumes an additional 21,732 MJ of gas during winter, adding roughly $1,000 to their seasonal bill.

Several trends are pushing the economics toward all-electric households:

1. Gas prices are projected to keep rising due to supply constraints and growing export demand. Domestic gas prices rose over 20% between 2022 and 2024.
2. Solar pairs with electric, not gas. If you have rooftop solar, running your reverse-cycle heater during daylight hours can cost next to nothing. Gas appliances cannot use solar energy.
3. Government rebates favour electrification. Victoria's VEU program offers rebates of up to $1,400 per unit for installing energy-efficient reverse-cycle split systems. Similar schemes exist in other states.
4. Dual supply charges add up. If you have both electricity and gas connections, you are paying two daily supply charges. Households that only use gas for cooking may find the daily gas supply fee alone cancels out any savings on the cooking itself.

For most households, an electric reverse-cycle split system is the most cost-effective heating choice in 2026. Gas ducted heating remains viable in large homes already connected to mains gas.

Knowing your state average is helpful, but the real savings come when you identify which specific appliances are costing you the most. A smart plug with built-in energy monitoring sits between the appliance and the power point, measuring real-time wattage, daily kWh consumption and estimated running cost.

The best energy monitoring smart plugs let you enter your electricity rate (including time-of-use tariffs) so the app shows actual dollar costs rather than just raw kilowatt-hours. Once you know that your old bar heater draws 2,400W or your second fridge pulls 150 kWh per quarter, you can make informed decisions about replacing or scheduling those appliances. Browse our full range of smart home products for more options.

1. Compare retailers every 12 months. The DMO is a price cap, not a target. Most retailers offer plans 10% to 25% below the DMO. Use Energy Made Easy (NSW, QLD, SA, TAS, ACT) or Victorian Energy Compare (VIC) to check.
2. Switch to a time-of-use tariff if you can shift loads. Off-peak rates (typically 15c to 20c/kWh) are significantly cheaper than peak rates (35c to 50c/kWh). Run your dishwasher, washing machine and pool pump during off-peak windows.
3. Audit your appliances with an energy monitoring smart plug. Plug a Kasa KP115 or Tapo P110 into your biggest suspects. Old fridges, bar heaters and standby-mode electronics are common culprits.
4. Upgrade to a reverse-cycle split system. If you are using electric bar heaters, column heaters or gas ducted heating, a modern split system will cut your heating costs by 50% to 70%. Check your state government website for available rebates.
5. Seal drafts and insulate your ceiling. Up to 35% of heat loss occurs through an uninsulated ceiling. Draught seals on doors and windows cost under $50 and can reduce heating loads measurably.
6. Set your hot water to 60 degrees. Hot water typically accounts for 20% to 25% of household energy use. Setting the thermostat higher than 60 degrees wastes energy with no hygiene benefit.
7. Consider rooftop solar. A well-sized 6.6 kW system in Sydney or Brisbane can offset $1,200 to $1,800 of annual electricity costs. Payback periods in most states are now under five years.

The national average electricity cost in Australia sits at roughly 33 cents per kWh in 2026, though this varies considerably by state. Tasmania and the ACT enjoy the lowest rates at around 26c/kWh, while South Australia records the highest at approximately 34c/kWh. These figures represent usage charges only and do not include daily supply charges (typically 93c to $1.07 per day) that appear on every bill regardless of consumption.

Your actual per-kWh rate also depends on your tariff type. A flat-rate tariff charges the same price around the clock. A time-of-use tariff offers cheaper off-peak rates (often 15c to 20c/kWh overnight) but charges a premium during peak hours (35c to 50c/kWh in the late afternoon and evening). If your household can shift energy-heavy tasks like laundry and dishwashing to off-peak windows, a time-of-use tariff can deliver genuine savings.

Gas has a lower per-unit energy cost than electricity, but that does not automatically make it cheaper for a given task. The critical factor is appliance efficiency. A modern electric reverse-cycle air conditioner produces three to five units of heat for every unit of electricity consumed, while a gas heater converts fuel to heat at roughly a 1:1 ratio (or worse in older models).

For heating, electric reverse-cycle systems are now cheaper to run than gas ducted heating in most scenarios. For cooking, gas cooktops remain slightly cheaper per minute of use, but the difference is small (a few dollars per quarter) and is often cancelled out by the daily gas supply charge if cooking is your only gas use. For hot water, a heat pump hot water system (electric) is more efficient than both gas storage and gas instantaneous systems.

With gas prices projected to continue rising and government rebates favouring electric appliances, the long-term economics increasingly favour going all-electric, especially for households with or planning to install solar panels.

The single fastest action is to compare and switch electricity retailers. Many Australians are on the default or standing offer, which is almost always the most expensive plan. Switching to a competitive market offer takes about 10 minutes online and can save $200 to $500 per year with no change to your habits.

After switching, the next highest-impact step is identifying your biggest energy consumers. Plugging a smart plug energy monitor into suspected high-draw appliances (old fridges, electric heaters, gaming PCs on standby) will quickly show you where the money is going. From there, you can decide whether to replace, schedule or simply switch off those appliances.

For a full picture of where your household income goes each month, try our budget planner to map electricity alongside rent, groceries, insurance and other recurring expenses.

A smart plug does not directly reduce your electricity consumption. What it does is give you visibility into exactly how much each appliance costs to run, and that visibility drives behaviour change. Studies by the Australian Energy Foundation found that households who actively monitor energy use reduce consumption by 5% to 15% on average.

Common discoveries people make with energy monitors include: a second fridge in the garage costing $200 per year, a gaming console drawing 150W on standby, or a portable heater burning through $2 per hour. At $25 to $40 per plug, a Kasa KP115 or Tapo P110 typically pays for itself within one to two billing cycles. The scheduling feature also lets you automatically power off devices during peak tariff periods, adding further savings without any effort.

For more ways to keep household costs in check, explore our latest insights on energy, finance and everyday savings.

Electricity costs in Australia vary significantly by state, but the national trend is clear: prices are rising and the cheapest way to heat, cool and power your home is increasingly electric, especially when combined with solar and modern appliances. South Australians pay the most per kWh, while Tasmanians and ACT residents enjoy the lowest usage rates. But usage rates alone do not determine your bill. Climate, household size, appliance efficiency and your choice of retailer all play a role.

The practical steps to lower your bill are straightforward: compare retailers annually, switch to a time-of-use tariff if you can shift loads, audit your appliances with an energy monitoring smart plug, and consider electrifying your heating if you are still running gas. Each of these actions can shave $100 to $500 off your annual bill, and most cost little or nothing to implement.

Start by plugging a TP-Link Kasa KP115 energy monitor into your most-used appliance. Within a week you will have the data you need to make smarter energy decisions.