Who pays the most for electricity in Australia?

Why Are Some Australians Paying So Much More for Power?

Ever opened your power bill and thought, “How is this even possible?” You’re not alone. While some households manage to keep their energy costs manageable, others are paying almost double — and it’s not just due to usage. It comes down to where you live, who supplies your electricity, and how informed you are about your options.

Let’s break down the current state of electricity pricing in Australia — who’s paying the most, why it’s happening, and what smart businesses are doing to reduce the sting.

What’s Driving These High Prices?

Australia's electricity market is a bit like a three-legged stool: if one leg wobbles, the whole thing tilts. Here's what’s tipping the balance:

1. Wholesale Market Volatility

Much of what you pay is dictated by the wholesale electricity market — where generators sell power to retailers. Natural disasters, fuel prices, and even geopolitical conflicts (like gas shortages triggered by overseas supply issues) can spike prices almost overnight.

2. Network and Distribution Costs

Think of these as the "delivery fees" — poles, wires, substations. In states with sprawling geography or ageing infrastructure (hello, South Australia), these costs are passed directly to consumers.

3. Retail Markups and Confusing Plans

Retailers set their own prices on top of base costs, and many offer discounts that expire or time-of-use tariffs that confuse more than they help. This creates a scenario where loyalty gets punished, not rewarded — a classic behavioural trap known as status quo bias.

Why Are Businesses Getting Hit Even Harder?

If you think residential bills are tough, commercial energy users have it worse — especially SMEs who lack the bulk-buying clout of large corporations.

• Variable rates tied to peak-hour demand

• Network demand charges that punish businesses for using too much power too fast

• Lack of time to compare plans or negotiate rates

It’s no wonder many small businesses end up locked into outdated contracts with rates that no longer reflect market conditions.

Can Electricity Brokers Actually Save You Money?

Yes — and here's where the psychology gets interesting.

Most business owners know they should compare energy plans, but they don't. Why? Choice paralysis. Too many providers, too many plans, too little time. That’s exactly where third-party electricity experts can flip the equation.

These brokers act as middlemen, negotiating with retailers on your behalf to secure better deals — not just lower unit rates, but better contract terms, fewer fees, and smarter metering options.

We've seen businesses in regional Victoria save upwards of 20% on their annual bill just by having someone untangle their supply arrangement and realign it with their usage profile — a strong case of friction removal leading to better decisions.

Why Don’t More People Switch Plans or Providers?

Glad you asked — it’s not laziness, it’s psychology.

Here are three behavioural forces at play:

• Loss Aversion: People fear the potential downside of switching (e.g. "What if I lose my discount?”) more than they value the potential savings.

• Effort Bias: Even if the switching process is simple, it feels hard, so they avoid it.

• Optimism Bias: We tend to think our deal is better than it actually is — until a brutal winter bill says otherwise.

This is where social proof can be powerful. When local councils, industry peers, or trade associations advocate for energy reviews or switching, it normalises the action and nudges others to follow.

Is Solar the Answer for Everyone?

It depends.

For homeowners in sunny regions or businesses with ample roof space, solar can dramatically cut daytime usage costs. But for renters, apartment dwellers, or those working nights, the payback can be slower.

Plus, feed-in tariffs have dropped significantly — meaning you’re not earning much for exporting excess power to the grid. The savings come primarily from self-consumption, not selling back.

That said, pairing solar with a battery (especially during peak tariff hours) is becoming a more viable strategy for long-term bill reduction — if you’ve got the upfront capital or financing.

What’s the Takeaway Here?

There’s no single silver bullet to beating rising electricity costs, but there are levers you can pull:

• Stay aware of your state's average pricing and how your rates compare

• Review your usage patterns and check if you're on the right tariff

• Consider external help — even large corporates lean on brokers for procurement now

• Don’t let loyalty keep you locked into high rates — retailers count on it

And for those exploring smarter procurement or contract optimisation, working with experienced electricity brokers could be the difference between manageable margins and painful overhead.

FAQ

Q: Why is electricity more expensive in South Australia?Because of its reliance on gas-fired generation, limited interconnectors to other states, and historically volatile wholesale prices.

Q: Can switching energy providers actually make a difference?Yes — many households and businesses are still on “standing offers” that are far more expensive than market offers.

Q: Are electricity brokers worth it for small businesses?Absolutely, especially if your usage is high and you don’t have time to compare plans manually.

And here’s a bit of food for thought: in a market this chaotic, the cost of inaction rarely stays the same — it almost always goes up.

For a deeper look at how procurement strategies are shifting, this recent energy pricing report breaks it down well.