Costs & savings

What is the average electricity bill in Melbourne in 2026?

About $1,591 a year, or roughly $400 a quarter, for a representative household on the Essential Services Commission’s 2026–27 default offer at 4,000 kWh. Melbourne has some of the lowest usage rates in the country — 26 to 33 cents per kilowatt-hour depending on which of five networks you are on — and gas heating keeps the electricity bill lower still.

By Kieron Taylor, Founder, Solar Select · Updated 18 September 2026 · 6 min read

The 30-second take

Victorian Default Offer 2026–27: about $1,591 a year for a representative household at 4,000 kWh — the benchmark for standing offers, effective 1 July 2026.
Usage rates by network (Canstar, May 2026): CitiPower 26.0c, United Energy 27.5c, Jemena 28.2c, Powercor 28.6c, AusNet 33.0c per kWh.
Melbourne’s electricity bills are lower than Sydney’s or Adelaide’s partly because rates are lower and partly because most homes still heat with gas.
The feed-in tariff is no longer regulated in Victoria. Exports are worth whatever your retailer pays, from near zero to about 8c on a capped block.
Solar yields less per kilowatt in Melbourne than in Brisbane — a 6.6 kW system averages about 24 kWh a day — but lower usage rates are offset by winter heating load if the home is electric.

The benchmark bill

Victoria sits outside the AER’s Default Market Offer. Its equivalent is the Victorian Default Offer, set by the Essential Services Commission, and the 2026–27 decision, released on 25 May 2026 and effective 1 July, puts a representative residential bill at about $1,591 a year at 4,000 kWh of annual usage.

That is a benchmark for standing offers rather than an average of what Melburnians pay. Most households are on market offers priced below it, so a real annual bill for a household using 4,000 kWh commonly lands between $1,100 and $1,600 depending on the plan and the network.

Five networks, five prices

Melbourne is split across five distribution networks, and the network you are on moves the usage rate by up to 7 cents per kilowatt-hour. Canstar’s May 2026 survey of average usage rates:

CitiPower — the CBD and inner suburbs: 26.0c/kWh. Representative annual cost around $1,115.
United Energy — the south-east and Mornington Peninsula: 27.5c/kWh.
Jemena — the north and north-west: 28.2c/kWh.
Powercor — the west and regional Victoria: 28.6c/kWh.
AusNet Services — the outer east and north-east: 33.0c/kWh, the most expensive in the state.

A household in Ringwood pays a quarter more per kilowatt-hour than the same household in Carlton. That gap matters for solar economics more than any retailer discount.

“Melbourne has the cheapest electricity of the big three east-coast cities, and the widest spread between networks inside one city.”

Why Melbourne bills run lower

Two reasons. Victorian usage rates are genuinely lower, in the high 20s of cents where Sydney sits in the mid-30s and Adelaide above 40. And Melbourne homes still overwhelmingly heat with gas, so the electricity bill does not carry the winter heating load it would in an all-electric house.

That second point is changing. New Victorian homes can no longer connect to gas, and households replacing a ducted gas heater with reverse-cycle air conditioning move several thousand kilowatt-hours a year onto the electricity bill. For those homes the "average" bill above understates what they will pay, and solar with storage becomes correspondingly more valuable.

What solar changes

Melbourne has less sun than Brisbane or Perth: a 6.6 kW system averages roughly 24 kWh a day across the year, with a strong summer peak and a thin winter. Against 26 to 33 cent usage rates, every kilowatt-hour used directly is worth that rate, and every kilowatt-hour exported is worth whatever your retailer chooses to pay now that the minimum feed-in tariff is gone.

For a gas-heated home with 4,000 kWh of annual usage, a 6.6 kW system covers a large share of daytime consumption and the saving is capped by how little the house uses. For an all-electric home with a heat pump and winter heating load, the same system is fully used and a battery starts to make sense.

Get matched with 2-3 vetted solar installers — typically 2+ years in business, with a track record of decent reviews — and ask each of them to size the system against your actual bills rather than a state average.

Sources

Every quantitative claim on this page traces to one of the sources below — government, manufacturer, or independent AU industry reference. Last verified 2026-09-18.

We use AI to help research and draft. Claims are traced to the sources below and dated. Where we haven’t got a source, we say so on the page — treat that as a starting point and do your own research.

General information only. It doesn’t take your circumstances into account and isn’t legal, financial, insurance or electrical advice. Rebates, tariffs, network rules and product terms change — confirm anything you plan to rely on with your installer, insurer, retailer or distributor, and see our terms.

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