So just who is the cheapest electricity provider in Melbourne?
Let’s face it, working out the best deal on electricity is complicated. There are many different electricity companies and retailers offering a myriad of different rates, discounts and deals, so comparing them to find the cheapest electricity provider can be very difficult.
Asking – what is the “best” electricity provider in Melbourne? – is a question that doesn’t have a straightforward answer. First, you need to understand how electricity gets to your house, and the various charges that make up your bill.
After that, you will be better able to compare ‘apples to apples’ and unravel the difference in costs and charges in your quest to find the cheapest electricity supplier in Melbourne.
Getting electricity into your house to power your lights, hot water and appliances involves interconnected organisations such as the networks or distributors who manage the electricity grid in different geographic areas, and the power companies or retailers who provide your electricity and send you a bill each month.
Table of contents
Understanding your electricity bill
What you pay month to month for your electricity is made up of various charges for service (or supply) and usage. Here’s an overview of the cost components of your monthly electricity bill:
Cost per kWh (usage)
This is generally the bulk of your electricity bill, and is the variable cost of the electricity you consume in your household. Known as the ‘tariff’, it is measured in kilowatt-hours (kWh).
As a commodity, electricity is subject to the forces of supply and demand, and when more people are using electricity the cost is higher. ‘Peak’ usage is the most expensive kWh rate for electricity purchase, and typically applies from the afternoon to the evening.
In contrast, ‘off‑peak’ periods, generally from late evening to early morning, are the cheapest kWh rates. The cost difference between peak and off‑peak can be significant, so adjusting your electricity usage throughout the day and evening can make a real difference to your bill. There are also ‘shoulder’ periods in between peak and off‑peak that cost somewhere in between each of these.
Melbourne context: Winter heating can push more usage into evening peak periods. If most of your consumption lands in peak, a flat tariff can be simpler. If you can shift laundry, dishwasher or heating to shoulder/off‑peak, a time‑of‑use plan may lower your bill. For regulatory context on the Victorian Default Offer (VDO) (the reference price for standing offers in Victoria), see the Essential Services Commission — Victorian Default Offer.
Controlled load (VIC)
This is a line item on your electricity bill for a separately metered circuit that supplies specific high‑energy‑use appliances such as electric hot water systems. Controlled load rates are generally lower (comparable to off‑peak prices) and usually operate overnight or during set hours. Whether it saves you money depends on your appliance size and run times.
Supply charge
This is a fixed daily charge that you pay to be connected to the electricity grid. Commonly known as the ‘poles and wires’, this charge pays for the infrastructure of the electricity network and metering services.
The distributor charges your retailer for this service, and they pass it on to you via your bill as the supply charge. Within the same area, the network component is consistent; your final supply charge may still vary by plan. Therefore, the variable usage cost per kWh for different times of day will often be the main driver when you’re comparing plans in Melbourne.
A helpful walkthrough on comparing plans is here: Electricity comparison.
Who is the cheapest electricity provider in Melbourne?
The result was the annual cost for electricity from 24 retailers, ranging in price from $1,545 to $1,655 (including GST). It’s clearly worthwhile to compare, as the most expensive costs nearly 35% more than the cheapest. Based on our review in November 2025 we can see that AGL is the cheapest electricity provider in Melbourne with an annual cost of $1,545 for a typical household. Remember this excludes any discounted pricing.
Electricity is an essential commodity and in Australia government agencies require transparent pricing. Because of this, they publish datasets that include current plan information across retailers. We use Victorian Government pricing datasets (Victorian Energy Compare) via API to power our live table and compile the list below for a typical Melbourne household.
For the purpose of this exercise, the information we input to the dataset was as follows:
Electricity plan
- Melbourne city 3000
- 2 to 3 person household
- No bill or meter data provided
- No controlled load
- No solar panels
- No pool
- No smart meter
- No current electricity retailer
List of 10 Lowest Cost Electricity Providers in Melbourne
What about discounts and deals?
At any given time, because electricity retailing is a competitive business, there will be a number of deals and discounts in the market to entice new customers. When you are considering switching retailers to save money, you should check for available discounts and deals.
And if you haven’t compared energy plans in a while, discounts you had previously signed up for could have expired, and you may be on the Victorian Default Offer (VDO), which is a regulated reference price for standing offers in Victoria. If you are on the VDO, you can often get a better rate by switching to an eligible market offer. For VDO details, see the Essential Services Commission — Victorian Default Offer.
Melbourne winter bill tips (peak vs time‑of‑use)
- Evening is typically peak time; winter heating can push more usage (and cost) into this window.
- If most of your usage lands in peak, a flat tariff can be simpler. If you can shift laundry, dishwasher or pre‑heating to shoulder/off‑peak, a time‑of‑use (TOU) plan may reduce your bill.
- Use our live table to compare total annual cost (usage + daily charge) rather than chasing the lowest c/kWh in isolation.
Smart‑meter & TOU quick‑check
- Look on your bill or meter for smart/interval/AMI wording or a model number; most Victorian homes use smart meters.
- TOU plans generally require an interval/smart meter. Confirm your tariff type (flat vs TOU vs controlled load) on your bill and in the plan fact sheet before switching.
Apartments & embedded networks in Melbourne
Some apartment buildings buy energy in bulk through an embedded network, which can change your plan options and switching process. If you’re in a CBD or inner‑Melbourne building and unsure, ask your building manager/body corporate or check the Essential Services Commission’s guidance on embedded networks.
Concessions & bill support
If you’re eligible for concessions or need support, see Energy Victoria — Households for current programs (concessions, utility relief, and bill‑help information).
Related resources
- Electricity comparison (national hub)
- Best VIC feed‑in tariffs
- Is solar worth it?
- VIC hub (link up once)
FAQ
Is electricity usually more expensive in winter in Melbourne?
Often yes, because heating raises evening peak usage on TOU plans. If most use falls in peak, a flat tariff may suit; if you can shift usage, TOU can help.
What is the Victorian Default Offer (VDO)?
A regulated reference price for standing offers in Victoria, set by the Essential Services Commission. Market offers can be higher or lower; our live table reflects current market offers against that context. See the VDO overview.
Do I need a smart meter for time‑of‑use in Melbourne?
Generally yes—TOU plans require an interval/smart meter. Check your bill for your meter type and confirm the plan fact sheet.
I live in an apartment—what’s an embedded network?
It’s when a building buys power in bulk and on‑sells to residents. Your switching options may differ; see the ESC’s guidance on embedded networks.
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