Many Australians are unknowingly paying a ‘loyalty tax’ on their energy bills, sticking with outdated or uncompetitive plans that cost them hundreds of dollars each year. The good news is that from 1 July 2026, new Default Market Offer (DMO) and Victorian Default Offer (VDO) prices are taking effect, creating a prime opportunity to compare and switch providers. By following a simple, step-by-step process, you can easily find a better deal and save significantly on your annual electricity and gas costs.
Understanding Your Energy Bill: The Basics
Before you switch, it’s crucial to understand the key components of your energy bill. Your bill is typically made up of a daily supply charge (a fixed fee for being connected to the grid) and a usage charge (what you pay per kilowatt-hour (kWh) for electricity or per megajoule (MJ) for gas). These rates vary significantly between retailers, plans, and even different times of day (Time-of-Use tariffs).
In most of Australia’s competitive energy markets (New South Wales, South East Queensland, South Australia, and Victoria), there are two main types of offers:
- Standing Offers: These are default contracts for customers who haven’t actively chosen a plan. They are generally the most expensive and are regulated by the Australian Energy Regulator (AER) through the Default Market Offer (DMO) or by the Essential Services Commission (ESC) in Victoria via the Victorian Default Offer (VDO). These act as a safety net and a reference price for comparing other plans.
- Market Offers: These are competitive plans offered by retailers to attract new customers, often including discounts, sign-up bonuses, or specific tariff structures. They are almost always cheaper than standing offers.
The ‘Loyalty Tax’ in Numbers: Why Switching Pays Off
Staying on a standing offer or an old, expired market contract can cost you dearly. Analysis shows that households on standing offers could be paying up to $350 per year more than those on the cheapest market plans available in their area. Other estimates suggest that the 15-20% of Australian households still on standing offers are overpaying by an average of $380 annually.
The Australian Energy Regulator (AER) and Essential Services Commission (ESC) have confirmed that Default Market Offer (DMO) and Victorian Default Offer (VDO) prices will change from 1 July 2026, offering a clear benchmark for potential savings.
2026 Energy Price Update: What’s Changing from 1 July
Good news for many: lower wholesale electricity costs, driven by increased renewable energy generation and battery storage, are pushing down benchmark electricity prices in most states from 1 July 2026.
Here’s a breakdown of the average annual changes for residential customers on default offers:
| State/Region | Distributor | Average Annual Price Change (Flat Rate) | Typical Dollar Saving/Increase |
|---|---|---|---|
| New South Wales | Ausgrid | -3.4% | -$66 |
| Endeavour Energy | -3.4% | -$83 | |
| Essential Energy | -5.0% | -$137 | |
| South East Queensland | Energex | -7.2% | -$155 |
| South Australia | SA Power Networks | +1.4% | +$33 |
| Victoria | State Average | -5.0% | -$84 |
Note: Time-of-use (TOU) customers in NSW and SE QLD can expect even larger savings, up to 7.7% and 10.7% respectively. South Australian TOU customers will see a 1.1% decrease.
These reductions are a direct result of falling wholesale electricity costs, which decreased by 2% to 14% for the upcoming financial year, largely due to more wind and battery generation entering the system.
The New Solar Sharer Offer (SSO)
From 1 July 2026, a new Solar Sharer Offer (SSO) will be introduced in DMO regions (NSW, SA, SE QLD). This opt-in plan provides eligible households with a smart meter 3 hours of free daytime power daily, regardless of whether they have rooftop solar. This initiative aims to encourage energy use during peak solar generation periods and can significantly cut bills for those who can shift their consumption.
Navigating Gas Prices in 2026
While electricity prices are generally stabilising or falling, natural gas prices remain elevated compared to pre-2022 levels due to global market trends and domestic supply issues. Year-on-year gas price increases have been recorded across the eastern states:
- New South Wales: +3.8% yr/yr
- Victoria: +4.2% yr/yr
- Queensland: +2.9% yr/yr
- South Australia: +5.1% yr/yr
Despite these increases, switching gas providers can still lead to hundreds of dollars in savings. Many retailers offer bundled electricity and gas deals that can be more competitive. For households looking to reduce their reliance on gas long-term, exploring alternatives like electric heat pump hot water systems, which are 3-4 times more efficient, can lead to substantial savings. Learn more about this in our guide: Is a Gas to Electric Home Conversion Worth It in Australia 2026? Unlock $1,000s in Savings & Rebates.
Your Step-by-Step Guide to Switching Energy Providers
Switching energy providers in Australia is straightforward and can be completed in minutes. Here’s how:
Step 1: Gather Your Current Energy Bills
You’ll need your most recent electricity and gas bills. These contain crucial information like your National Meter Identifier (NMI) for electricity and Gas Installation Reference Number (MIRN) for gas, your annual consumption, and your current tariff type (e.g., flat rate, time-of-use, controlled load). This data allows comparison tools to provide accurate estimates tailored to your usage.
Step 2: Use Official Government Comparison Websites
These independent platforms are the most reliable way to compare market offers against the regulated DMO/VDO in your area. They are free, impartial, and provide a comprehensive overview of available plans.
- For NSW, SE QLD, SA, ACT, TAS: Use the Australian Government’s Energy Made Easy website.
- For Victoria: Use the Victorian Government’s Victorian Energy Compare website.
Input your NMI/MIRN (if prompted, this pulls your actual usage data), your postcode, and details about your household and appliances. The tool will then rank plans by estimated annual cost, clearly showing how they compare to the DMO/VDO.
Step 3: Understand Offer Types and Tariffs
Don’t just look at the headline discount. Consider the following:
- Market Offer vs. Standing Offer: Always aim for a market offer for better rates.
- Benefit Periods: Many market offers have an initial benefit period (e.g., 12 or 24 months) after which rates may revert to a higher standing offer. Mark your calendar to re-evaluate before this period ends.
- Tariff Structure: Is it a flat rate, Time-of-Use (peak, off-peak, shoulder), or a demand tariff? If you have a smart meter and can shift your usage, a TOU plan or the new Solar Sharer Offer might be more beneficial.
- Solar Feed-in Tariffs (FiT): If you have solar panels, compare the FiT offered by different retailers. For example, Ergon Energy’s FiT in regional QLD will decrease from 8.660 c/kWh to 6.006 c/kWh from 1 July 2026.
Step 4: Check for Sign-Up Bonuses and State Rebates
Many retailers offer incentives to new customers. In June 2026, some examples include:
- AGL: Up to $300 in bill credits ($150 electricity, $150 gas) for new/moving customers in NSW, VIC, SA. QLD customers may get $200 electricity, $100 gas.
- Origin Energy: Up to $200 in energy credit ($100 electricity, $100 gas) for new/moving customers on the ‘Go Variable’ plan in NSW, SA, VIC, until 30 June 2026.
- Engie: Offers up to $125 off electricity and $125 off gas in VIC, $100 off electricity and $100 off gas in NSW, and $125 off electricity in QLD on various plans.
- Momentum Energy: Up to $100 in bill credit ($50 electricity, $50 gas) for VIC customers on ‘Warm Welcome’ plan, or $50 electricity credit in NSW, QLD, SA.
While the federal Energy Bill Relief Fund ended in December 2025, state-based concessions and rebates are still available for eligible households, particularly those with concession cards. For instance, in South Australia, the energy concession amount will be up to $291.27 for 2026-27. For a comprehensive overview of available support, refer to our guide: Navigating Australia’s Energy Bill Relief and Support in 2026: A Comprehensive Guide.
Step 5: Review Contract Terms and Conditions
Always read the fine print. Check for:
- Exit Fees: Some contracts may have fees if you switch before the benefit period ends, though these are less common now.
- Payment Methods: Some discounts are conditional on direct debit or online billing.
- Price Changes: Understand how and when your rates might change after the initial benefit period.
Step 6: Make the Switch
Once you’ve chosen a new plan, contact the new retailer. They will handle the entire switching process, including notifying your old provider. There’s no need for a technician to visit your home, and your power supply will not be interrupted.
Beyond Switching: Long-Term Energy Savings
Switching providers is an immediate way to save, but for sustainable long-term reductions, consider improving your home’s energy efficiency. Upgrades like better insulation, efficient appliances, or even a smart home energy management system can slash your bills further. Explore options in our guide: Smart Home Energy Systems: Slash Your 2026 Australian Electricity Bills by Up To 30%.
Bottom Line
The Australian energy market is dynamic, and failing to regularly compare plans means you’re almost certainly paying more than you need to. With new DMO and VDO prices taking effect from 1 July 2026, now is an opportune time to act. By dedicating a small amount of time to compare options on official government websites, you could easily save up to $380 or more on your annual energy bills, putting an end to the loyalty tax for good.