When someone asks whether solar is worth it in their state, the answer almost always comes back to their electricity rate. A household in South Australia paying 38 c/kWh gets far more value from every kWh of self-consumed solar than a household in Victoria paying 28 c/kWh — even if their systems are identical. Understanding what drives prices in your state helps you assess how those prices are likely to move over the life of your solar system.
How prices are regulated in each state
Australia does not have a single national electricity price. The National Electricity Market (NEM) covers NSW, VIC, QLD, SA, TAS and the ACT, but each state has its own regulatory framework for retail electricity pricing:
- NSW, SE Queensland, SA: The Australian Energy Regulator (AER) sets the Default Market Offer (DMO) — the maximum price for standing offer customers. Competitive market offers may be 18–27% lower.
- Victoria: The Essential Services Commission (ESC) sets the Victorian Default Offer (VDO), which functions similarly.
- Tasmania: The Office of the Tasmanian Economic Regulator (OTTER) sets standing offer prices for Aurora Energy.
- ACT: The Independent Competition and Regulatory Commission (ICRC) sets standing offer prices.
- Western Australia: WA is not in the NEM. The state government sets regulated tariffs for Synergy customers on the SWIS grid. Electricity is sold as a public service, not through a competitive retail market.
- Northern Territory: Jacana Energy sets regulated tariffs under NT Government oversight.
State-by-state electricity prices 2025–26
The table below shows typical single-rate flat tariff usage charges for residential customers on default or regulated offers, plus indicative competitive market offer rates and daily supply charges. All prices include GST. Usage rates are derived from official regulator determinations for 2025–26 (DMO 7, VDO 2025–26, OTTER 2025–26). "Market offer range" reflects the spread of competitive plans actively available in each market as at April 2026.
| State / Territory | Default offer single rate (c/kWh, approx.) | ToU peak rate (c/kWh, approx.) | Daily supply charge (c/day, approx.) | Competitive market offer range (c/kWh, typical) | Regulator | Key price driver |
|---|---|---|---|---|---|---|
| NSW (Ausgrid) | ~50 (DMO 7 standing offer; ~32–36 competitive) | ~55–65 (peak, ToU plans) | ~110–130 | 30–37 | AER (DMO) | Rising wholesale contract costs; aging coal transition; higher retail operating costs |
| NSW (Endeavour / Essential) | ~49–60 (DMO standing; ~33–38 competitive) | ~55–65 | ~100–140 | 31–39 | AER (DMO) | Regional network cost premium for Essential Energy customers |
| VIC (average across 5 zones) | ~29–35 (VDO 2025–26) | ~36–47 (peak 3–9 pm, VDO ToU) | ~116–141 | 26–33 | ESC (VDO) | High renewable penetration keeps midday wholesale low; competitive retail market |
| QLD (SE, Energex) | ~47 (DMO 7 standing; ~28–33 competitive) | ~50–60 | ~100–120 | 28–34 | AER (DMO) | Relatively stable 2025–26 (+3.7%); low-cost hydro mix in regional QLD |
| QLD (Regional, Ergon) | ~28 (regulated tariff 11, no competition) | ToU limited availability | ~100 | N/A (Ergon sole retailer) | Queensland Competition Authority | Subsidised regulated tariff; network cross-subsidy from SE QLD |
| SA (SA Power Networks) | ~58 (DMO 7 standing; ~34–40 competitive) | ~55–65 | ~110–130 | 34–40 | AER (DMO) | Gas-firmed variable renewables; highest wholesale contract costs in NEM; long distribution network |
| WA (Synergy, Perth metro) | ~30–31 (regulated A1 home plan) | ~35 (ToU peak; DEBS ToU export scheme exists separately) | ~110 | N/A (Synergy only) | WA Government / ERA | State-subsidised; isolated SWIS grid; high solar penetration causing midday oversupply |
| TAS (Aurora Energy) | ~28–30 (regulated standing offer) | ~33–40 (ToU peak periods) | ~95–110 | 26–32 | OTTER | Hydro-dominated generation mix; limited interconnection (Basslink to VIC) |
| ACT | ~28–33 (ICRC standing offer) | ~40–50 (peak periods) | ~95–115 | 26–32 | ICRC | 100% renewable electricity purchase through large-scale certificate scheme; regulated ActewAGL and retail competition |
Sources: AER Default Market Offer 2025–26 (DMO 7); ESC VDO 2025–26; OTTER 2025–26. Competitive market rates are indicative ranges from active market offers as at April 2026 and are not definitive. Always compare via your state's energy comparison tool.
Why South Australia pays the most
South Australia has the highest residential electricity rates in the NEM, a position it has held for most of the past decade. Three structural factors explain this:
- Gas-firmed renewables: SA sources more than 70% of its electricity from wind and solar, but relies on gas peaker plants to firm supply when renewables are not generating. Gas is an expensive fuel for electricity production, and these costs are passed through wholesale prices, particularly during evening peaks.
- Network infrastructure costs: SA has a large geographic network with relatively low population density. The capital cost per customer of maintaining the distribution network is higher than in Victoria or NSW's major metropolitan zones.
- Hedging costs: SA's highly variable generation mix means retailers need to buy expensive financial hedges to protect against price spikes. These hedging costs are reflected in retail offers.
The silver lining for SA households is that high retail rates make solar self-consumption exceptionally valuable. The solar payback calculator shows SA households often achieving payback periods 1–2 years shorter than NSW or VIC households with identical systems, purely because avoided electricity is worth more per kWh.
Why NSW prices rose sharply in 2025–26
The AER's DMO 7 determination (effective 1 July 2025) saw NSW prices rise by 8.3–9.7%, the highest increase of the three DMO regions. The primary driver was elevated wholesale electricity contract costs, reflecting tight supply conditions as coal generation capacity retires. Retail operating costs also rose 8–35% year-on-year as retailers' hedging and compliance costs increased. NSW customers on standing offers — typically those who have never actively switched — experienced the full increase. Customers on competitive market offers saw smaller increases or were partially shielded by fixed-term plan pricing.
Victoria and the ACT: why prices are lower
Victoria's high penetration of wind and rooftop solar creates sustained periods of low or negative wholesale prices, particularly in the middle of the day. This keeps the wholesale cost component of the VDO relatively low. Victoria also has a highly competitive retail market — more than 30 retailers actively compete, and the lowest market offers are typically 20–30% below the VDO. The ACT has committed to 100% renewable electricity (through large-scale certificate purchases) and benefits from ActewAGL's regulated structure and active retail competition. Both states are experiencing modest bill decreases into 2026–27 based on current draft determinations.
Western Australia: a separate system
WA's electricity system is structurally different. Synergy is the state-owned retailer for the South West Interconnected System (SWIS), and residential tariffs are set by the WA Government rather than through a competitive market. The "A1 Home Plan" flat rate sits around 30–31 c/kWh. WA does not participate in the NEM, and its grid management challenges are distinct — very high midday solar penetration creates a pronounced duck curve, which is why the DEBS scheme pays only 2.25 c/kWh for daytime solar export but 10 c/kWh for evening export.
What electricity prices mean for your solar decision
The retail rate you currently pay is the input that matters most in the payback model. If your electricity rate is above 35 c/kWh (likely in SA, and possible in NSW and QLD depending on your plan and network), solar self-consumption is exceptionally valuable and payback periods are typically 5–7 years. If your rate is closer to 28 c/kWh (VIC, ACT, TAS, regional QLD), payback periods are still attractive but typically run 7–9 years for moderate self-consumption.
The key question is not "what is the average rate in my state?" but "what is the rate on my current bill and plan?" Check your latest electricity bill for the usage charge in c/kWh, or look up your plan on your retailer's website. Then use the solar payback calculator with your actual rate to generate a realistic payback estimate. You can also explore how a home battery interacts with time-of-use pricing to shift your consumption to lower-rate periods.
For more on how state prices interact with solar and battery economics, see our guide to solar feed-in tariffs by state in 2026.
Sources
- Australian Energy Regulator — Default Market Offer 2025–26 (DMO 7) final determination.
- Essential Services Commission Victoria — Victorian Default Offer 2025–26.
- Australian Energy Market Commission (AEMC) — Residential Electricity Price Trends 2025.
- Office of the Tasmanian Economic Regulator (OTTER) — Current regulated electricity prices.
Last reviewed: — rates verified against AER DMO 7 (2025–26), ESC VDO 2025–26, and OTTER 2025–26 determinations.