Electricity is one of the largest ongoing household expenses in Australia. While many people have a rough idea of what they pay, few understand why costs differ by state, what a kilowatt-hour (kWh) really means, and how small changes in tariff or usage patterns can add hundreds of dollars to annual bills. This independent guide explains electricity costs in plain language, using real 2025 data, and shows homeowners how to take control of their bills.
Looking to compare plans? See the top electricity prices and providers compared in Australia.
Table of contents
What is a kWh and Why It Matters
- 1 kilowatt-hour (kWh) is the energy needed to run a 1,000-watt appliance for one hour.
- Think: a reverse-cycle air conditioner on cooling mode for 1 hour, or 10 hours of running a 100-watt lightbulb.
- Bills are based on the number of kWh you use each quarter, multiplied by your usage rate (c/kWh), plus a daily supply charge that applies regardless of usage.
Rule of thumb: Every 1c/kWh change adds around $73/year to the bill of a typical household using 20 kWh/day.
How Electricity Pricing Works in Australia
Electricity prices aren’t the same across the country. Here’s why:
- Competitive markets (NSW, VIC, SA, SE QLD): Retailers compete for customers, but all must compare against regulator-set reference prices: the AER’s Default Market Offer (DMO) or Victoria’s Victorian Default Offer (VDO).
- Regulated tariffs (WA, NT, TAS, ACT, Regional QLD): Prices are set by state governments or regulators. Households often cannot choose their retailer.
Your final rate is shaped by:
- Tariff type: flat, time-of-use (TOU), controlled load, or demand-based.
- Retailer plan: some include discounts for paying on time or direct debit.
- Network costs: regional households usually pay more.
- Government rebates or concessions: reduce bills, not the per-kWh rate.
Average Cost per kWh by State (2025)
| State/Territory | Flat Tariff (c/kWh) | TOU Peak (c/kWh) | TOU Off-Peak (c/kWh) | Notes |
| NSW | 27–28 | 45–55 | 20–30 | AER Default Market Offer |
| VIC | ~25 | 45–50 | 20–25 | Victorian Default Offer |
| SE QLD | 19–20 | 45+ | 20–25 | Cheapest nationally |
| Regional QLD | ~33 | 45.7 | 22.7 | Regulated (Ergon) |
| SA | ~34 | >50 | 20–25 | Highest national average |
| WA | 32.37 | n/a | n/a | Synergy A1 regulated |
| TAS | ~25 | ~40 | 18–20 | Tariff 31/93 |
| ACT | 27–28 | 45+ | 20–25 | ACT Gov regulated |
| NT | 30.1 | 35.5 | 27.1 | Jacana Everyday Home |
Valid as at 1 September 20 2025. Source: AER, ESC, Synergy, Jacana, Ergon, ActewAGL, TasNetworks.
Figures shown are from regulator/government tariff documents Valid as at 1 September 20 2025. Market offers vary by retailer, distributor, and household usage. Always confirm with your retailer’s BPID.
What This Means for Your Bill
Let’s put cents into dollars. For a household using 4,200 kWh/year:
- NSW (28c/kWh flat): $1,176/year
- SE QLD (20c/kWh market rate): $840/year
- SA (34c/kWh flat): $1,428/year
The difference between cheapest and most expensive states is ~$588/year, before supply charges.
Why Prices Differ by State
- South Australia: Reliance on gas generation and higher network costs push rates up.
- SE Queensland: Competitive retail market keeps rates among the lowest.
- Regional Queensland: One retailer (Ergon) supplies most homes on higher regulated tariffs.
- Victoria: Universal smart meters make TOU common, so shifting usage can pay off.
- WA & NT: Monopoly suppliers mean little or no retail choice.
Tariff Types Explained
- Flat rate: Same cost per kWh all day. Simple, but not always cheapest.
- Time-of-Use (TOU): Expensive during afternoon/evening peak, cheaper overnight. Best for households who can shift usage.
- Controlled load: Separate meter for appliances like hot water or pool pumps, usually at a cheaper rate.
- Demand tariff: Charges based on your single highest peak demand in a billing period. Still rare for homes, but becoming more common.
Rebates & Concessions (2025 Snapshot)
- NSW: Low Income Household Rebate
- VIC: $250 Power Saving Bonus (when open)
- QLD: $1,000 Cost of Living Rebate (2025)
- WA, SA, TAS, NT, ACT: Concessions for eligible households
These reduce your total bill, not your per-kWh rate.
How to Read Your Bill & Find Your Real Cost
- Check usage rate: listed as cents per kWh.
- Find supply charge: daily fee that adds up to $300–$450/year.
- Look for tariff type: flat, TOU, or controlled load.
- Calculate effective cost: divide total bill by total kWh to see what you really pay.
- Compare with benchmarks: use the DMO or VDO as a reference.
Tips to Cut Your Bill
- Compare retailers: Savings come from moving to plans below the DMO/VDO.
- Shift usage: Run dishwashers, washing machines, or EV charging off-peak.
- Use controlled loads: Hot water on off-peak tariffs can save hundreds.
- Upgrade appliances: Old fridges and dryers can cost more than the new efficient versions.
- Add solar: Solar panels reduce imports; batteries can store energy for peak times.
Solar & Feed-in Tariffs
Solar doesn’t change your per-kWh import rate, but you earn credits for exports. These vary by state:
FAQs
How much is 1 kWh in Australia in 2025?
Between 19c (SE QLD) and 34c (SA, WA).
Which state is cheapest?
SE QLD, thanks to retailer competition.
Which state is most expensive?
South Australia and Western Australia.
Is 12 kWh/day a lot?
No — the average family uses 15–20 kWh/day. 12 kWh/day is closer to a small or energy-efficient household.
Will power cut off if I switch retailers?
No. Switching is seamless — only your billing changes.
How do I check my actual rate?
Review your bill or your retailer’s Basic Plan Information Document (BPID).
- WA Electricity Rebates & Incentives (2025 Guide) - 24 September, 2025
- ACT Electricity Rebates & Incentives (2025 Guide) - 24 September, 2025
- SA Electricity Rebates & Incentives (2025 Guide) - 23 September, 2025
