Who pays the most per kWh?

 Who pays the most per kWh in Australia? The short answer: it depends on where you live, how you buy electricity, and what type of customer you are. But there are some clear front-runners in the price stakes—and not in a good way.

Households in regional and remote areas, particularly those not on the National Electricity Market (NEM), often pay the most. Add to that small businesses with variable usage patterns and no energy contract—these groups routinely face the steepest per-kWh rates. But let’s unpack what’s really driving these costs and who cops the biggest hit.

Why do electricity rates vary so much in Australia?

Electricity isn’t a one-price-fits-all situation. Australia’s fragmented energy market has created a postcode lottery for power bills. Here’s why:

  • Different networks mean different distribution charges. Regional areas often foot higher infrastructure costs.

  • Retail markups are unregulated in many areas, so retailers can charge more where there’s less competition.

  • Wholesale volatility impacts smaller retailers more, and they often pass that onto consumers.

  • State-based subsidies (or lack thereof) can skew pricing drastically.

In short, the cost per kilowatt-hour is driven by a mix of geography, competition, and policy.

Which Australian states or regions pay the highest per kWh?

Let’s look at how it breaks down across major regions.

RegionAverage Residential kWh Rate (2025 est.)Notes
Northern Territory$0.35–$0.40Not part of NEM; isolated grid, limited competition
South Australia$0.34–$0.37High solar penetration but also high wholesale prices
Western Australia$0.31–$0.34Government-regulated; regional customers pay more
Tasmania$0.29–$0.32Hydro offsets some costs, but still above average
Queensland (regional)$0.30–$0.33Subsidised but still high due to network costs
NSW / Victoria (metro)$0.25–$0.29Competitive retail markets keep rates lower

Notably, regional users in QLD, WA, and the NT often pay the most—especially those on default offers with no negotiated contract.

Are businesses paying more than households?

Surprisingly, yes—if they’re not on the right deal.

Small and medium businesses (SMEs), particularly in hospitality, retail, or manufacturing, are some of the worst-hit:

  • Variable usage patterns mean they miss out on volume discounts.

  • Many don’t actively manage their electricity contracts, staying on outdated tariffs.

  • They’re often unaware of better brokerage options available.

One Sydney café owner we spoke to shared they were paying $0.38 per kWh—nearly 30% more than nearby businesses on negotiated contracts. That's real money down the drain.

Who really pays the most per kWh?

Drill down into the data, and a clear group emerges:

Worst affected: Off-grid and regional residential users on standing/default offers, followed closely by small businesses not using electricity brokers.

These customers often pay up to 40% more per kWh than metro users on market offers. The reasons? Low competition, limited access to energy advice, and tariff structures that punish lower consumption.

How do energy brokers help reduce per-kWh costs?

Here’s where electricity brokers come into the picture—and why they matter more than ever.

Brokers act as intermediaries between energy retailers and customers. But they do more than just compare prices:

  • Leverage scale to secure lower rates from retailers.

  • Customise contracts to suit your usage profile.

  • Provide alerts on tariff changes or renegotiation windows.

  • Shield you from misleading discount structures or bill shock clauses.

A good broker can save businesses thousands annually by reducing their effective kWh cost. Some even consolidate multiple meters or sites to boost bargaining power.

We’ve seen case studies where switching through a broker dropped a company’s rate from $0.36 to $0.27 per kWh—without changing usage at all.

Is it better to be on a fixed or variable kWh rate?

There’s no one-size-fits-all answer, but here’s how it generally shakes out:

  • Fixed rate plans offer predictability, shielding you from wholesale price spikes.

  • Variable rate plans may be cheaper short-term but can rise sharply with market conditions.

  • Time-of-use tariffs reward usage during off-peak hours, ideal for flexible businesses or EV owners.

What matters is understanding your own usage pattern and risk appetite. That’s another area where brokers provide value—helping you avoid mismatched plans that sound good but bite hard.

What drives up the most expensive kWh rates?

Some of the biggest culprits include:

  • Retailer default offers (often the highest rate available)

  • Network congestion in remote areas

  • Low competition (fewer choices = higher prices)

  • Peak-time usage under time-of-use tariffs

  • Solar feed-in cross-subsidies (sometimes shifting costs to non-solar users)

Add to that policy uncertainty and rising wholesale prices, and it’s no wonder some Australians feel like they’re paying a “sun tax” just to keep the fridge running.

Real example: Two homes, two wildly different costs

Consider this:

  • Suburban Brisbane couple on a market offer via a broker: $0.26 per kWh

  • Regional QLD retiree on a standing offer: $0.39 per kWh

Same grid, same power source—but a 50% difference in effective cost. Multiply that across a year’s usage and you’re talking hundreds of dollars extra. That’s not just unfair—it’s avoidable.

What’s the long-term outlook?

Australia’s energy market is shifting fast. As rooftop solar, batteries, and dynamic pricing become mainstream, the traditional per-kWh model may fade. But for now, smart navigation of tariffs, timing, and brokering remains the best way to avoid paying top dollar.

In the end, electricity is the same—what changes is how you buy it.

And while there’s no single "most expensive" customer, the trend is clear: inattention costs more than consumption.

For businesses or residents unsure where they stand, brokers can decode the fine print and bring bills back to earth. There's a reason smart operators are moving in that direction—this breakdown explains it well.

FAQ

Q: Are standing offers really that bad?
Yes. They’re usually the highest rate available, especially in regions with less competition.

Q: Do solar owners pay less per kWh?
Not always. While they use less grid power, their remaining consumption may still fall under expensive tariffs, especially at night.

Q: How often should businesses review their electricity contracts?
At least annually—or sooner if market conditions shift. Many brokers offer automatic reviews at key contract milestones.


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