Electricity bills could jump 24% this year, but there’s a silver lining (kind of)
The grim news comes on the back of electricity bill rebates expiring at the end of last year.
Key takeaways
- New data shows that the average 3-person household could see energy bills rise by $500 between November 2025 and July 2026.
- This is due to state and federal government energy bill rebates running from 2023 and 2025, which have now ended.
- However, a separate analysis shows households could save up to $1,100 a year with the 3 hours of free electricity scheme, which is set to kick in from 1 July in New South Wales, southeast Queensland and South Australia.
Since mid-2024, all Australian households received $75 in quarterly credits as part of the federal government's energy bill subsidy, which ended somewhat unexpectedly at the end of December 2025.
Before this, the federal government was offering targeted support to those 'most in need'.
Over the past couple of years, some state governments also rolled out their own energy bill rebates, such as Queensland's $1,000 payment to all households.
Most of this support has now been wound back.
What happens to electricity bills from here?
As a result, new data and forecasts from the Australian Bureau of Statistics (ABS) and Westpac indicate electricity bills could jump by 24% between November 2025 and July 2026.
For an average 3-person household, that's a $500 increase.
Westpac economist Justin Smirk told The Australian Financial Review that lower-income households would bear the brunt of the price hike, as energy bills make up a larger portion of their budget.
"All [the rebates] did was shift the impact of the price rises that should have appeared in 2024-25 into 2025-26," said Smirk.
He also believes the Reserve Bank of Australia will be closely watching power prices when deciding to lift interest rates.
Haven't compared energy plans in over 12 months?
You could be missing out on a cheaper deal.
Could there be a $1,100 silver lining?
On 23 January, energy minister Chris Bowen announced the next steps for the 3 hours of free electricity scheme, also known as the Solar Sharer Offer (SSO).
You can read all about what it is in our previous news story.
But long story short, from 1 July, households with smart meters in NSW, southeast QLD, and SA can opt into a plan that gives 3 hours of free electricity every day.
New analysis from the Department of Climate Change, Energy, the Environment and Water said households that sign up to this offer could save anywhere between $150 to $1,100.
Here's how:
- Moving just 10% of your energy use from the evening peak to the free hour could save money. A 1-person household might save around $150 a year on appliances such as a dishwasher, while a 5-person household could save around $400.
- Scheduling appliances such as the dishwasher, washing machine, dryer or hot water system during the free power period - about 20% of energy use - can save more. That's roughly $300 for a 1-person home, and $500-$790 for a 5-person home.
- Shifting 25-30% of your energy use, including the dishwasher, washing machine, dryer, pool pump, and EV charging, could save even more - around $400 for a 1-person household, and $800-$1,100 for a 5-person household.
"The Solar Sharer Offer is about making sure we make the most of our huge solar generation, including by ensuring the benefits of cheap solar can be shared with consumers who don't have solar systems themselves through the offer of free daytime power," Bowen said in a media release.
"It will provide direct bill savings for households who sign up and can move their energy use into the zero-cost power period, while also taking pressure off evening peak demand, lowering network and system security costs."
Sources
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