How to Reduce Your Electricity Bill in Australia in 2026

Published 14 May 2026

Electricity bills in Australia have risen significantly over recent years. In 2026, the average household has more tools than ever to reduce costs — from free changes to behaviour and tariffs, through to smart devices, solar panels and home batteries.

This guide works through the options in order of cost and complexity, so you can start with the steps that cost nothing and build from there.

Step 1: Check your electricity plan and tariff type (free)

The fastest way to reduce your electricity bill without spending anything is to compare your current electricity plan against alternatives.

Are you on the right tariff type?

Most Australian households are on one of two tariff structures:

• Flat rate: You pay the same rate per kWh regardless of when you use power
• Time of use (TOU): You pay different rates at peak, shoulder and off-peak times

If you use most of your electricity outside peak hours — evenings and weekends — time of use can be cheaper. If you use a lot of power during peak windows (typically 3–9pm on weekdays), a flat rate may be better.

Are you on your retailer's best available rate?

Energy retailers regularly introduce new plans that are better value than older standing offers. Calling your retailer and asking for a better rate costs nothing and often works. Comparison sites can show alternatives across retailers in your state.

Step 2: Identify what is actually driving your bill

Before buying anything, measure what you are spending energy on.

A smart plug with energy monitoring ($20–$50) can measure any appliance connected to a standard power point. Within a few days of leaving it plugged in, you will know the daily and weekly kWh cost of that appliance.

Start with the highest-suspected loads:

• Fridge and chest freezer (especially older second units)
• Pool or spa pump
• Electric hot water system (if not on controlled load)
• Always-on entertainment systems and set-top boxes
• Air conditioner

Devices that run continuously — rather than just when you use them — are often the biggest surprise on a bill.

Step 3: Shift when you use energy

Once you know which appliances cost most, consider when you run them.

With a time-of-use tariff:

Run dishwashers, washing machines and dryers during off-peak periods (typically evenings and weekends on most TOU plans, though this varies by retailer and network).

With solar panels:

Run high-draw appliances between 10am and 3pm when solar generation is typically highest. This maximises self-consumption — using solar you generated rather than buying grid power or exporting at a low feed-in rate.

Hot water:

Many Australian households have electric hot water on a controlled load circuit — a separate tariff that charges your water at night at a lower rate. If you are not on controlled load and have an electric storage hot water system, ask your retailer about moving to it.

Step 4: Reduce standby and always-on loads

Always-on devices draw power 24 hours a day, seven days a week. Even small standby draws add up over a year.

A smart plug on a device you only use occasionally lets you switch it off completely from an app when not in use.

Step 5: Review hot water settings

Hot water accounts for 20–30% of most Australian household electricity bills. Two free changes can make a meaningful difference:

• Reduce thermostat temperature to 60°C — the minimum required for legionella safety. Many systems are set to 70°C or higher by default, which wastes energy heating water beyond what is needed.
• Shift heating to solar hours — if you have solar and a heat pump or electric storage system, setting it to heat between 10am and 2pm uses self-generated solar rather than grid power.

Always check the manufacturer's guidance and Australian safety standards before adjusting hot water temperature.

Step 6: Consider solar panels

For most Australian households, rooftop solar is the largest single electricity cost reduction available.

A typical 6.6kW system can generate 25–30kWh per day in most Australian capital cities. A household that uses 15–20kWh per day can offset a large portion of its grid consumption during daylight hours.

The financial case for solar depends on your daily usage, how much you self-consume during the day, your current tariff and the upfront cost. In 2026, the federal STC rebate still applies to eligible systems, reducing upfront cost.

Payback periods for solar in Australia typically range from 4–8 years depending on system cost, usage patterns and state incentives.

Step 7: Add a home battery (if the numbers support it)

A home battery extends solar savings into the evening, reducing grid imports during peak-rate periods.

A battery makes the most financial sense when:

• You already have solar and export significant energy during the day
• Your evening usage is high
• The gap between your export rate and evening import rate is large
• A state rebate reduces your upfront cost

For households without solar, a standalone battery is generally not financially viable — it would need to be charged from the grid and discharged, creating an inefficient arbitrage that rarely covers the installation cost.

Step 8: Review large appliances

Older appliances — especially refrigerators, air conditioners and washing machines — are significantly less efficient than current models.

Before replacing any appliance purely for energy savings, measure its actual usage with a smart plug and calculate the annual cost. Compare that against the energy star rating and estimated running cost of a replacement model.

The payback period for an appliance upgrade purely on energy grounds is often longer than expected. Replacement makes most sense when an appliance is already at end of life.

Practical starting point: read your bill

Before any of these steps, understanding your current bill — tariff structure, daily usage patterns, controlled load status and current rate — gives you a baseline to measure against.

Solar eBoost's Power Bill Interpreter is a free tool that helps you break down what your electricity bill is actually showing.