TL;DR — Cheapest Energy Provider in Australia (May 2026)
The cheapest energy provider in Australia depends on your state because electricity markets are state-regulated. Energy Locals is the cheapest in NSW, SA, and parts of VIC with its wholesale pass-through model. Ovo Energy leads in VIC. Red Energy and AGL compete in QLD. No single provider is cheapest everywhere — a Sydney household saves the most with Energy Locals, while a Melbourne household may save more with Ovo or Powershop. Switching takes 10 minutes online and saves the average household AUD 300–500/year.
How Australia’s Energy Market Works
Australia does not have a single national electricity retailer market. The National Electricity Market (NEM) covers NSW, VIC, QLD, SA, TAS, and the ACT under shared wholesale trading rules, but retail pricing is regulated at the state level:
- NSW, SA, QLD: Default Market Offer (DMO) price cap, set by the Australian Energy Regulator
- VIC: Victorian Default Offer (VDO), set by the Essential Services Commission
- TAS: Regulated by the Tasmanian Economic Regulator; limited competition
- ACT: Regulated; limited competition
- WA and NT: Not part of the NEM; separate markets with limited retail competition
This means the cheapest provider in NSW (Energy Locals) may not even operate in QLD, and the cheapest provider in VIC (Ovo) may not be available in SA. Cross-state comparisons require checking each state’s market separately.
Cheapest Electricity Provider by State
| State | Cheapest Provider | Estimated Annual Saving vs Default Offer | Competitive Alternatives |
|---|---|---|---|
| NSW | Energy Locals | AUD 350–550 | Red Energy, Powershop, Ovo |
| VIC | Ovo Energy | AUD 300–500 | Energy Locals, Powershop, Red Energy |
| QLD | Energy Locals | AUD 250–450 | Red Energy, AGL, Alinta Energy |
| SA | Energy Locals | AUD 300–500 | Ovo, Red Energy, Alinta Energy |
| TAS | Aurora Energy (only retailer) | N/A | Limited competition |
| ACT | ActewAGL | AUD 100–200 | Origin, Energy Locals |
Estimates based on typical household usage of 4,900 kWh/year (3,800 kWh/year in QLD due to lower heating demand) as of May 2026. Actual savings depend on postcode, meter type, controlled load, and solar export.
1. Energy Locals — Wholesale Pass-Through, National Best Value
Energy Locals operates in NSW, VIC, QLD, SA, and the ACT. Its model is unique: charge the wholesale energy price plus a flat membership fee (AUD 0–19/month), with no per-kWh retail margin. The result is the cheapest electricity in most postcodes where it operates, especially for households using above-average electricity.
The membership model aligns incentives differently from traditional retailers. AGL and Origin want you to use more electricity — their margin is per kWh. Energy Locals earns the same membership fee regardless of your consumption, so it has no incentive to discourage solar, batteries, or efficiency. The company actively promotes solar and provides tools to shift usage to cheaper times of day.
2. Ovo Energy — Best in Victoria, Strong in SA and NSW
Ovo Energy entered Australia by acquiring and rebranding several smaller retailers. Its fixed-rate plans are consistently among the cheapest in VIC, where Energy Locals faces stronger competition from established discount retailers. Ovo’s plans include a 100% carbon offset as standard and a user-friendly app with usage tracking.
Ovo’s The One Plan bundles electricity with carbon offsets and a welcome credit (typically AUD 100–150). The welcome credit reduces the first year’s effective cost, but check the rate after the first 12 months — the discounted rate often expires.
3. Red Energy — Qantas Points and Competitive Rates
Red Energy, backed by Snowy Hydro, competes on price in QLD and SA where the larger retailers (AGL, Origin) have been slow to drop rates. Red Energy’s Qantas Points earn rate (2 points per dollar) adds roughly AUD 30–50/year in points value, narrowing the gap with Energy Locals for frequent flyers.
How to Compare and Switch Providers
- Find your usage data: Check your latest electricity bill for average daily kWh. If you have a smart meter, your retailer’s app or web portal shows hourly usage.
- Compare: Enter your postcode and usage into Energy Made Easy (energymadeeasy.gov.au) or a private comparison site like Econnex. Sort by estimated annual cost.
- Check the plan details: Fixed vs variable rate, contract length, exit fees, conditional discounts (e.g., pay-on-time discounts), and solar feed-in tariff.
- Switch online: The new retailer handles the transfer. No interruption to supply, no technician visit, no change to your meter (unless you are switching meter types). The switch takes effect on your next scheduled meter read.
Compare providers on Econnex →
What to Watch for When Comparing Plans
Conditional discounts: AGL and Origin advertise 15–25% “pay on time” discounts. The discount applies to the usage charge only, not the daily supply charge, and disappears if you pay a single bill late. A seemingly competitive rate with a conditional discount may be worse than a slightly higher unconditional rate.
Fixed vs variable rates: Fixed-rate plans lock the usage rate for 12 months. Variable-rate plans change with wholesale prices. In a rising wholesale market, fixed is safer. In a falling market, variable saves money. Energy Locals’ variable pass-through saved customers roughly AUD 200/year during the 2024–25 wholesale price decline; the reverse would happen if wholesale prices spike.
Solar feed-in tariff: The rate paid for exported solar ranges from 5–12 c/kWh across retailers. A plan with a competitive usage rate but a low feed-in tariff (5 c/kWh) may cost more overall than a plan with a slightly higher usage rate and a higher feed-in tariff (10 c/kWh) if you export significant solar. Calculate total annual cost including solar export to compare accurately.
Frequently Asked Questions
How long does it take to switch energy providers?
The switch takes effect on your next scheduled meter read — typically within 1–10 business days. There is no gap in supply. Your old retailer sends a final bill, your new retailer starts billing from the switch date.
Do I need to be home for the switch?
No. No technician visit is required. The switch is a billing change, not a physical connection change. Your meter, wiring, and supply are unchanged.
Can I switch if I am renting?
Yes. Tenants can switch electricity providers without the landlord’s permission — the electricity account is in the tenant’s name. If the lease includes electricity in the rent, the landlord chooses the provider. Check your lease before switching.
What happens to my solar feed-in tariff when I switch?
The new retailer’s feed-in tariff applies from the switch date. Some legacy feed-in tariffs (NSW Solar Bonus Scheme, QLD Solar Bonus Scheme) are only available from the original retailer — switching forfeits the bonus rate. These legacy schemes are mostly closed to new entrants, but confirm before switching if you enrolled before 2017.
Is a fixed-rate or variable-rate plan better right now?
As of May 2026, wholesale electricity prices are trending downward as renewable generation increases and coal plants retire, reducing pressure on wholesale prices. Variable-rate plans (Energy Locals’ pass-through) are likely to follow wholesale prices down. Fixed-rate plans lock in current rates, which may be higher than variable rates in 6–12 months if the trend continues. No one can predict wholesale prices with certainty — the safest approach is a plan with no exit fee, so you can switch again if rates move against you.
Can I bundle electricity and gas with the same provider?
Yes, and bundling typically saves AUD 50–100/year through dual-fuel discounts. Energy Locals, AGL, Origin, and Red Energy all offer electricity + gas bundles. The bundle discount is usually a flat amount (AUD 50–100) or a slightly lower rate on both services.
Final Verdict
For most Australian households, Energy Locals offers the cheapest electricity rates with a fair, transparent model and no lock-in. In Victoria, compare Energy Locals against Ovo — the winner depends on postcode and usage. Red Energy wins for Qantas Points collectors. Use Energy Made Easy with your actual usage data for a 10-minute comparison that typically saves AUD 300–500/year.
Check Energy Locals → | Compare on Econnex →
Disclosure: This article contains affiliate links. We may earn a commission when you switch through these links — at no extra cost to you. Rate estimates are based on publicly available plan data as of May 2026.