How to reduce your electricity bill

There are three ways to reduce your electricity bill: pay less for each unit of power, use fewer units, and use them at cheaper times. Most advice focuses on using less. Fixing the price is usually faster, because a plan change takes minutes and shows up on your next bill.

This guide works through all three in order of effort. It starts with free changes you can make today and ends with upgrades that cost money but come with government discounts. Every savings figure is sourced to a regulator or government agency.

Quick facts

• Residential customers on the median market offer could save $260 to $466 a year (12% to 23%) by switching to the most competitive offer in their area, according to the Australian Energy Regulator's January to March 2026 retail performance update. Customers on the Default Market Offer could save $431 to $624.
• In NSW, Queensland, South Australia, Tasmania and the ACT, the AER's Better Bills Guideline requires a "better offer" statement on the first page of your bill. In Victoria, the Essential Services Commission requires best offer information on your bill at least once every four months.
• From 1 July 2026, AEMC rules stop retailers in those five states and territories charging more than the standing offer once a plan's benefits end, and limit market contract price rises to once in 12 months.
• Water heating uses around 29% of the energy in a typical NSW home and heating and cooling about 27%.
• Every extra degree of heating or cooling increases that energy use by 5% to 10%, and standby power can account for more than 10% of household electricity use.
• In the AER's jurisdictions, 62% of customers had a smart meter at 31 March 2026, but only about a third of those were on a time-of-use tariff.

Why is my electricity bill so high?

Your bill has two parts: a fixed daily supply charge and a usage charge for every kilowatt hour (kWh) you use. The supply charge covers the cost of an active connection and doesn't change with your usage, while the usage charge depends on how much power you use and, on some plans, when you use it. Network costs for the poles and wires make up about half of total electricity costs. Our guide to understanding your electricity bill explains each line in detail.

A bill that jumps suddenly usually has one of these causes:

• Your plan's discount or benefit period ended. Your rates may have moved closer to the standing offer without any change in your usage.
• The bill is based on an estimated meter read. Estimated bills are marked on the bill and are corrected when a real read is taken.
• The season changed. Heating in winter and cooling in summer are the largest uses of power in most homes.
• Something in the house changed. A new appliance, an extra person, a pool or an electric vehicle can all lift usage.
• Your tariff no longer suits you. A time-of-use tariff costs more if most of your usage falls in the peak period.
• There is a billing error. Bill errors made up 24% of billing complaints to retailers in early 2026, according to the AER.

To see how your bill compares with typical households in your state, read our guide to the average electricity bill in Australia.

Where the electricity in your home goes

The NSW Government breaks down energy use in a typical home as follows. Your own split will vary with climate, home size and appliances, but the order shows where to focus first.

Source: NSW Climate and Energy Action.

The federal government's household energy guide says hot water is potentially the single biggest source of energy use in a home, with heating and cooling usually next, according to energy.gov.au.

Step 1: Make sure you're paying the right price

Checking your plan is the fastest way to reduce your electricity bill because it costs nothing and needs no change to how you live. The AER's analysis shows households can save hundreds of dollars a year on the same usage simply by moving to a cheaper offer. 

At Utility Club, we can help you find a better deal. Start comparing plans today.

Read the better offer message on your bill

In NSW, Queensland, South Australia, Tasmania and the ACT, the AER's Better Bills Guideline requires a statement on the first page of your bill headed "Could you save money on another plan?". It must tell you if your retailer has a better deal for you and how to switch to it.

In Victoria, retailers must show you how much you could save by moving to their best offer at least once every four months, based on your usage over the past year, according to the Essential Services Commission. They must also give you at least five days' warning before a change that affects your bill.

If the message says a cheaper plan is available, you can call your retailer and ask to be moved to it. 

Check whether you're on a standing offer

A standing offer is a retailer's default plan, and it is usually the most expensive way to buy electricity. The Queensland Government says plans named "Standing Offer" or "Standard Tariff" on your bill are a retailer's base plan and are typically less competitive than market offers.

Standing offer prices are capped by the AER's Default Market Offer in NSW, South East Queensland and South Australia, and by the Victorian Default Offer in Victoria.

The cap is a ceiling, not a good price.

The AER found that customers moving from the Default Market Offer to the lowest available market offer could save $431 to $624 a year. Our electricity cost per kWh guide lists the regulated rates for every network in 2026 to 27.

Compare plans from other retailers

Your retailer's best offer is not always the best offer in the market. The AER's January to March 2026 data shows customers on the median market offer could save $260 to $466 a year by switching to the most competitive offer in their region, according to its quarterly retail performance update.

To compare fairly, have a recent bill on hand so you can match plans to your actual usage, tariff type and network. The government comparison sites are Energy Made Easy (NSW, Queensland, South Australia, Tasmania and the ACT) and Victorian Energy Compare. You can also compare electricity plans with Utility Club online or by calling 1300 317 598.

The Australian Energy Market Commission found the switching process itself is fairly simple, and that understanding and comparing plans is the harder part. That is why the comparison is worth doing once a year, or whenever your bill changes noticeably.

Know what changed on 1 July 2026

New national rules took effect on 1 July 2026 in NSW, Queensland, South Australia, Tasmania and the ACT. Under the AEMC's final rule, retailers must:

• stop customers on plans with benefits that change or expire from paying more than the standing offer once those benefits end;
• apply unreasonable conditional discounts in full, without the condition;
• not increase prices on a market retail contract more than once in 12 months; and
• charge no retail fees (excluding network charges) to vulnerable customers, and limit fees for everyone else to reasonable costs.

These rules protect you from the worst outcomes, but they don't move you onto a cheaper plan. A plan that is capped at the standing offer is still likely to cost more than a competitive market offer.

Choose a tariff that matches when you use power

Your tariff decides how your usage is priced. A flat (single rate) tariff charges the same price at any time of day. A time-of-use tariff charges different prices for peak, shoulder and off-peak periods, and needs a smart meter. Some networks also offer demand tariffs, which add a charge based on your highest usage in the peak window.

Time-of-use pricing can save money if you can move usage out of the peak period, but a contract that doesn't suit your household could leave you paying more. Before changing, look at when your household uses the most power. If you are home during the day or can run appliances outside the evening peak, a time-of-use tariff is more likely to work.

Peak times differ by network, so check yours in our guide to peak and off-peak electricity times. If you don't have a smart meter yet, our smart meters guide explains the national rollout.

Put your hot water on a controlled load tariff

If you have an electric storage hot water system, a controlled load (off-peak) tariff heats your water when power is cheaper. Switching a larger electric storage system to an off-peak tariff can save money, though it is only available with some systems and retailers.

In Queensland, for example, Economy Tariff 31 supplies hot water systems for at least 8 hours a day and Economy Tariff 33 supplies power for at least 18 hours a day. Connecting an appliance that isn't already on an economy tariff requires an electrician and a new meter, so work out the payback period first.

Claim every concession and rebate you're eligible for

Concessions and rebates come off your bill directly and are worth checking every year. Each state runs its own schemes, and most are tied to a concession card, a medical condition or a low income. Our guide to electricity rebates in Australia lists what is still available in each state and territory in 2026.

If you get a concession, give your concession card details to any new retailer when you switch or move house, so the discount keeps appearing on your bill.

Check your payment options

Some retailers offer discounts for paying on time or by direct debit. You can also ask for monthly billing or regular instalments. It may not lower the total cost, but it can make the bill easier to budget for and help you avoid late fees.

Step 2: Use less electricity where it counts

Once your price is right, cutting usage lowers every future bill. Start with hot water and heating and cooling, because together they account for more than half the energy used in a typical home.

These government estimates show what some no-cost or low-cost changes are worth for a typical household:

The federal guide estimates a household of four could save about $760 a year from a handful of changes like these. Actual savings depend on your appliances, climate, home size and the prices on your plan.

Hot water

Hot water makes up 25% of energy use in the average home and is potentially its single biggest source of energy use, according to energy.gov.au. These changes cut it without any spending:

• Wash clothes in cold water. Cold washes can use 80% less energy than hot washes.
• Run the washing machine and dishwasher only when they are full, and use the eco setting if there is one.
• Keep showers to about four minutes, as the NSW Government recommends.
• Fix dripping hot taps so you aren't paying to heat water that goes down the drain.

Heating and cooling

The temperature you set matters more than any other heating or cooling habit. Energy.gov.au recommends setting heating between 18°C and 20°C in winter and cooling between 25°C and 27°C in summer, because every extra degree increases heating and cooling energy use by 5% to 10%.

• Use a fan first. Fans cost about 2 cents an hour to run. Set ceiling fans anticlockwise in summer and clockwise on low in winter.
• Heat or cool only the rooms you use. Close internal doors and vents to unused rooms.
• Manage your curtains. Up to 40% of the heat in a home can be lost through windows. Open curtains to winter sun during the day and close them before dark. In summer, close them during the hottest part of the day.
• Seal draughts. Weather strips, sealant and door snakes are cheap ways to stop warm or cool air escaping.
• Clean your air conditioner filters. Clean them twice a year so the system runs efficiently.
• Use a timer. Set heating or cooling to switch off automatically rather than running all night.

Fridges, cooking and laundry

Your fridge runs all day, every day, so small inefficiencies add up. NSW Climate and Energy Action recommends setting fridges between 3°C and 4°C and freezers between -15°C and -18°C, and cleaning door seals regularly. Keep the fridge away from the oven and other warm spots so it doesn't have to work harder.

When cooking, use lids on pots and boil only as much water as you need. In the laundry, clean the dryer lint filter after every load if you do use a dryer.

Standby power

Standby power can account for more than 10% of household electricity use. Anything with a light or clock on it is drawing power, and a phone charger left at the wall draws power even with no phone attached.

Switch TVs, consoles, computers and chargers off at the wall when you're not using them. A power board with a single switch, or a timer, makes this easier. Leave fridges, medical equipment and anything that needs to record or update overnight switched on.

Lighting

Lighting is a small share of most bills, at about 4% of home energy use in NSW. LED globes use 75% less energy and last up to 10 times longer than older globes. Replace globes in the rooms you use most first, and turn lights off when you leave a room.

Pools

If you have a pool, the filter pump may run for several hours every day. Energy.gov.au recommends reducing pump running time to the safe minimum in the manufacturer's manual. On a time-of-use tariff, schedule it outside the peak period.

For a quick checklist of these habits, see our energy saving tips.

Step 3: Use power when it's cheapest

If you're on a time-of-use tariff, moving flexible loads out of the evening peak lowers your bill without reducing what you use. The usual candidates are the dishwasher, washing machine, dryer, pool pump, hot water system and electric vehicle charging. Most of these have a delay-start timer.

Since 1 July 2026, the Solar Sharer Offer has given eligible households in NSW, South East Queensland and South Australia three hours of free electricity a day, up to 24 kWh. The free window is 11am to 2pm in NSW and South East Queensland and 12pm to 3pm in South Australia. You need a smart meter and you must ask your retailer to opt in. Victoria's Midday Power Saver, with a free window from 11am to 2pm, started on 1 October 2026. Our Solar Sharer Offer guide explains who qualifies and how much it is worth.

If you drive an electric vehicle, an EV plan with a cheap overnight or daytime charging rate can cut charging costs. Our guide to EV electricity plans explains how to check whether one will save you money.

Step 4: Generate and store your own power

Rooftop solar reduces your bill mostly by replacing power you would otherwise buy, not by what you earn from exports. Feed-in tariffs have fallen in every state, as our solar feed-in tariffs guide shows, so the more of your solar output you use yourself, the larger the saving. Running appliances during the day is the simplest way to do that.

Home batteries and the Cheaper Home Batteries Program

A battery stores daytime solar for use in the evening peak. Under the federal Cheaper Home Batteries Program, households can get an upfront discount on an eligible battery through small-scale technology certificates, which installers usually build into the quote, according to the Clean Energy Regulator.

The Clean Energy Regulator sets these conditions:

• The battery must have a nominal capacity between 5 kWh and 100 kWh.
• It must be installed with solar panels. Batteries that only store power from the grid are not eligible.
• Only the first battery at a property is eligible.

The program changed on 1 May 2026. Smaller batteries keep the full discount, larger batteries get a smaller discount as their size increases, and the discount will reduce more often over time, according to the Energy and Water Ombudsman NSW. Check that your quote shows the discount you qualify for before you sign.

If you have a battery, a virtual power plant can pay you for letting it support the grid at busy times. Our virtual power plants guide explains what they pay and what to check before joining.

Step 5: Upgrade inefficient appliances, with a discount

Replacing an old electric hot water system, heater or air conditioner costs money upfront but lowers running costs for years. Several state programs discount these upgrades, which shortens the payback period.

In NSW, discounts come off the installer's quote rather than being paid to you afterwards, so the NSW Government recommends getting quotes from several installers.

NSW has also banned unsolicited door-knocking to sell these upgrades, so treat any door-to-door offer with caution. Eligible NSW households can also apply for the Home Energy Saver program, which offers discounts or zero-interest loans for upgrades such as solar, batteries, heat pumps and insulation.

Check the energy rating before you buy

When you buy an appliance, its running cost is a second price tag. Energy.gov.au recommends comparing the Energy Rating Label and choosing the product with the most stars. A cheaper appliance with fewer stars can cost more over its life. The Energy Rating website has a calculator for comparing running costs.

Avoid buying a bigger fridge, TV or air conditioner than you need. Larger models with extra features usually use more power for as long as you own them.

How to reduce your electricity bill if you rent

Renters can still cut most of their bill, because the biggest saving, the plan, is in your name. You can compare and switch retailers without your landlord's permission if the account is in your name.

Most of the habits in Step 2 also cost nothing: cold washes, thermostat settings, curtains, standby power and shorter showers.

Low-cost, removable items such as door snakes, LED globes and an efficient showerhead are usually fine, but check your lease before changing fixtures. For bigger upgrades, such as a heat pump hot water system, ask your landlord whether they would use a state discount program.

If you live in an apartment block, retirement village or caravan park, your power may be supplied through an embedded network, which changes your options for switching. Our guide to embedded electricity networks explains your rights and price protections.

Avoid "power saving" devices

Be sceptical of plug-in boxes that claim to cut your electricity bill. The ACCC took the distributor of one such device to the Federal Court, which found that the device could not reduce the real power a household uses, so it could not save consumers money.

The only reliable ways to reduce your electricity bill are a cheaper price, lower usage, cheaper timing or your own generation.

If you're struggling to pay your electricity bill

Contact your retailer as soon as you know you'll have trouble paying. Retailers must offer help, and acting early gives you more options. The AER says you can ask for:

• A payment plan, which lets you pay for your energy in instalments. Only agree to an amount you can afford.
• The retailer's hardship program, which gives you a payment plan and other help, including finding a cheaper plan. Your retailer can't charge you late payment fees while you're on it, and can't disconnect you while you follow your payment plan.

In Victoria, retailers must offer assistance under the payment difficulty framework, which can include an extension to a bill's due date.

If your retailer won't offer a payment plan or hardship program, you can contact the energy ombudsman in your state for free. Also check our guide to electricity rebates, since emergency payment schemes and concessions may apply.

The AER's data shows why acting early matters. In early 2026, households were entering hardship programs with an average electricity debt of $2,247, up from $1,777 a year earlier, according to its quarterly retail performance update.

Photo by Riccardo Annandale on Unsplash