Electricity prices will increase between 20 and 25 per cent from July 1, as announced by the Australia Energy Regulator (AER). The decision will directly impact approximately 600,000 customers in South Australia, New South Wales, and south-east Queensland as they are on the default offer.
The default offer is the benchmark price that keeps a lid on price increases for household and small business customers.
Homeowners without controlled load will see a price increase between 20.8 per cent and 23.9 per cent. Whilst those with controlled load will notice an increase between 19.6 per cent and 24.9 per cent. Small business owners will have an increase between 14.7 per cent and 28.9 per cent.
Energy price increase per state based on energy retailer:
Households with AGL:
| NSW | 29.7 % |
| VIC | 25.5% |
| QLD | 26.4 % |
| SA | 29.8 % |
Households with Origin:
| NSW | 21% |
| QLD | 21% |
| SA | 24% |
| VIC | 25% |
Households with Energy Australia:
| NSW | 20.5 % |
| VIC | 23.6% |
| SA | 23.2% |
| QLD | 20.3% |
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What changed?
In March, a draft was released that stated an increase in electricity prices between 20 and 22 per cent. However, the AER considered stakeholder feedback, which led to a “small change of between 1 per cent to 3 per cent” difference from its initial draft.
“The changes we have made are largely updates based on additional, finalised information and refinements to our methodology to better reflect the costs of retailing electricity,” according to AER.
Chair Clare Savage said the power bills could increase by 40 to 50 per cent if there was no intervention by the government to cap energy prices.
Fortunately, the interventions in the coal and gas market have helped reduce price expectations for the coming year with contract prices falling around 50 per cent.
In December 2022, the government states that they would cap coal and gas prices for a year. The move was criticised by power producers as they believed it would affect supply in future investments.
What drives the increase in energy prices?
Global energy markets are volatile now due to a supply crunch caused by the war in Russia and Ukraine. Another reason energy prices are set to increase in Australia is the frequent outages at coal-fired power stations.
The solution to increasing energy prices
The higher energy prices have many homeowners and small business owners scrambling for a solution. The good news? There IS a solution.
Labor Party president and former treasurer Wayne Swan said, “Renewable energy is the key, it’s far cheaper than traditional fossil fuels.”
Australia has some of the best renewable energy sources globally. Wind and solar electricity have seen continual growth since 2022. Meanwhile, bioenergy can increase its contribution by 2030 by over 60 per cent. Geothermal and ocean power are currently being evaluated as well.
Over the years, renewable energy investment has increased significantly across the country. You can take part in this by switching to solar by installing rooftop solar panels in your home or place of business.
It’s not unusual for homeowners to switch to renewable energy. Dave Franklin, a homeowner in Black Rock, Melbourne and was featured in Open Homes Australia Episode 8, contacted us here at Energy Matters when his last power bill ran up to $3,000.
Franklin wanted to save more on energy bills; hence, we recommended him to one of our trusted solar installers. His newly-renovated home is now powered with a professionally-installed solar system that will keep their electricity bills to a minimum.
Energy Matters has over 17 years of experience in the solar industry and has helped over 40,000 Australian households in their journey to energy independence.
Complete our quick Solar Quote Quiz to receive up to 3 FREE quotes from trusted local installers – it’ll only take you a few minutes and is completely obligation-free.
