Who Has the Cheapest Electricity Rates? Spoiler: It’s Not Just About Price
Electricity prices. They’re the silent leech on Aussie business profits and household budgets alike. And if you've ever compared two “cheap” plans only to find your bill still looks inflated, you’re not alone. The truth? The cheapest rate isn’t always the lowest number on paper. It’s the smartest fit for your usage, habits, and contract terms.
Let’s break it down—with behavioural science, energy market smarts, and a few real-world examples to help you cut through the noise.
So, What’s the Cheapest Electricity Company in Australia Right Now?
Short answer: it depends where you live, what your usage looks like, and whether you're comparing actual cost to you or just headline rates.
But if you're chasing names, here are some providers frequently offering low base rates:
ReAmped Energy – Popular with tech-savvy users willing to self-manage online.
OVO Energy – Offers carbon-neutral electricity with competitive standing rates.
Energy Locals – Known for flat monthly fees that bypass daily supply charges.
Tango Energy – Often shows up with sharp fixed-rate deals in VIC and SA.
⚠️ Here’s the kicker: these “cheap” plans often come with behavioural nudges—like bill smoothing or autopay discounts—that subtly change how you use or think about energy. It’s not accidental. Energy companies know that defaults and small frictions can shift behaviour.
Why Do Prices Vary So Much Between States?
Because Australia’s energy market isn’t national—it’s fragmented. Each state has different wholesale prices, regulations, and levels of retailer competition.
Here’s how it generally plays out:
State Cheapest Typical Providers Key Factors
VIC Tango, Momentum, Energy Locals Highly competitive, regulated smart meters
NSW ReAmped, GloBird, Nectr Large spread between peak/off-peak tariffs
QLD OVO, Origin, Red Energy Fewer discounts, more usage-based billing
SA Powershop, Simply Energy High volatility, rooftop solar impacts pricing
TAS/WA/NT Government-controlled prices Less retail choice, prices fairly static
The retailers that dominate in Victoria won’t necessarily give you the best deal in Queensland. It’s about local market forces, plain and simple.
What Makes One Electricity Plan “Cheaper” Than Another?
It’s rarely just the rate per kilowatt hour (kWh). Here are other cost influencers most people miss:
Daily Supply Charges – You pay this even if you use zero electricity.
Conditional Discounts – Think pay-on-time or direct debit.
Exit Fees or Lock-in Contracts – Switching costs can eat up savings.
Tariff Type – Flat vs. time-of-use can drastically shift your bill depending on habits.
Solar Feed-In Tariffs – Crucial if you’ve got panels feeding energy back.
Ever been drawn in by a juicy why not try here 25% discount only to realise the base rate is hiked up to start with? That’s classic anchoring bias at work—making a price seem more appealing by framing it as a “deal”.
How Can Businesses Avoid Being Ripped Off?
Unlike residential customers, What is the energy rebate for small businesses in NSW? business plans are often bespoke, opaque, and based on negotiated rates. This means two similar businesses might pay vastly different prices—even if they use the same provider.
Small business owners, especially cafes, retail shops, or light manufacturing, should look at:
Load profile – When are you using energy most? Peak vs. off-peak costs matter.
Demand charges – You might be paying based on your highest 15-min usage burst.
Bundled services – Some providers sneak in “smart meter” fees or energy monitoring costs.
More and more SMEs are turning to comparison tools or brokers—some even offering a Free Business Energy Bill Comparison
to help identify savings without the fine print drama.
Can Switching Really Save You Much?
Absolutely. Data from the AER (Australian Energy Regulator) shows that switching to a better deal can save:
Households: Up to $400 annually
Small businesses: Between $800 and $2,500 annually
But here’s where Cialdini’s principle of commitment and consistency works against you. Once we pick a provider, we tend to stick—even if the deal goes stale. That inertia costs us.
Real talk? Anyone who's been with a big retailer for more than two years is probably overpaying.
Is the Cheapest Deal Always the Best Deal?
No. And that’s not fence-sitting—it’s psychology and strategy.
Sometimes the “cheapest” plan will make you sacrifice flexibility (like losing a discount if you miss a single payment). Others might seem pricier upfront but offer better service, local investment, or carbon offsetting.
It's like buying budget shoes—great until they fall apart mid-walk.
Instead, try thinking in value per kWh, not just cost per kWh.
Real-World Example: Two Melbourne Households, Two Very Different Bills
Household A (Single, works late, uses most energy after 9pm)
→ Chose a time-of-use tariff with low off-peak rates from OVO Energy.
→ Saved $320/year compared to previous flat-rate plan.
Household B (Family of 4, home during the day)
→ Stuck with an old AGL contract out of habit.
→ Paid 18% more annually despite having rooftop solar.
Both had similar usage. Only one adapted to the behavioural quirks of their plan.
How Do You Actually Compare Plans Without Going Cross-Eyed?
Here’s a quick checklist:
Use your actual bill usage (kWh) as the baseline—not estimates.
Compare total estimated annual cost, not just rate per kWh.
Check if rates are fixed or variable.
See if there are any What is the average utilities expense for a small business? “bill shock” traps—like peak pricing jumps.
Use government comparison sites like Energy Made Easy
or VIC’s Compare Energy
.
And if you're running a business, those generic tools won’t cut it. You'll want tailored analysis from brokers who understand load patterns and tariff structures.
FAQ
What’s a good electricity rate in 2025?
Rates vary, but anything under 25c/kWh (excl. GST) for usage and under $1/day for supply is considered competitive in VIC and NSW.
Should I fix my energy rate or go variable?
Fixing adds price certainty, especially if rates are rising. But if you switch often or expect prices to fall, variable might win.
Do solar panels make my rate irrelevant?
No—but they do change the game. Feed-in tariffs and daytime usage patterns become crucial.
Final Thoughts
Finding the cheapest electricity provider isn’t about chasing the lowest number—it’s about aligning your behaviour, usage, and business model to the right plan. And let’s be honest, in a market this complex, leaning on tools that offer a Free Business Energy Bill Comparison
is just smart strategy—not click reference laziness.