Why Your Power Bill Is Still High Even Though Solar Made Electricity Dirt Cheap

There was a thread on r/australia recently that nailed the frustration a lot of people are feeling. The title: “Daytime power prices have never been lower. So why are bills rising?”

Nearly 300 upvotes. 78 comments. And the overwhelming sentiment was some version of “we were told solar would fix this.”

Here's the thing.... solar did fix the generation part. Wholesale daytime electricity is basically free now, sometimes even negative. But your bill isn't just generation. And understanding the gap between “cheap wholesale power” and “expensive quarterly bill” is the key to actually doing something about it. (If your solar monitoring app shows great generation but your bill still hurts, our article on why your solar app does not match your bill explains the disconnect.)

Australia's electricity grid runs on something called the National Electricity Market (NEM). It's managed by AEMO, and it works like a rolling auction that happens every five minutes.

Here's how one Reddit user broke it down beautifully: “AEMO set a power requirement, eg 3GWh at 7pm. Generators then bid in with their capacity to provide and their cost. The bids are ranked in increasing cost and accepted until the required capacity is met. All the accepted bids are paid the same, the highest amount of the accepted bids.”

Read that last bit again. Every generator gets paid the price of the most expensive one that was needed.

During the day, when solar panels across the country are pumping out cheap power, the most expensive accepted bid is still pretty low. Wholesale prices during those hours are sometimes negative (we'll get to that in a sec).

But at 7pm on a hot Tuesday? The sun's gone. Everyone's home running their aircon. And the most expensive generator needed to meet that demand is almost always a gas plant. As one commenter put it: “Prices might be low during the day, but they spike up over a hundred when the gas plants fire up.”

On extreme days, those wholesale prices can spike from a normal $100-200/MWh to over $10,000/MWh. Sometimes $20,000. That's not a typo.

Think of it like a restaurant where every dish costs the same as the most expensive one ordered at the table. If one person orders lobster, everyone pays lobster prices. Gas is the lobster. And it gets ordered every evening.

Even if wholesale prices dropped to zero tomorrow, your bill wouldn't. Because generation is only about 30% of your retail electricity cost.

The rest breaks down roughly like this:

That transmission and distribution chunk, the poles and wires, is a fixed infrastructure cost. It doesn't care how cheap solar makes the wholesale price. And it keeps going up because maintaining and upgrading the grid is expensive.

Then there's the daily supply charge. The one that ticks over every single day whether you use 1kWh or 100kWh. As one of the top-voted comments put it: “Higher daily surcharges and peak rates (which aren't getting cheaper).”

So even if you're exporting heaps of solar during the day, you're still paying the supply charge, still paying for network costs, and still buying expensive peak-rate electricity in the evening when your panels aren't producing. Your feed-in tariff is offsetting some of it, sure. But those rates have been steadily dropping for years.

This was arguably the hottest take in the Reddit thread. One comment with 36 upvotes summed up what a lot of people are feeling: “I highly doubt retailers will pass the savings onto the consumer. They are private businesses and their goal is maximising profits.”

It's not entirely cynical, either. Retail electricity rates are regulated to some extent by government agencies, and retailers do need to justify price rises. But there's a difference between “not raising prices” and “lowering them.” Wholesale costs going down doesn't automatically mean your bill goes down. It just means the retailer's margin gets a bit fatter.

The structural incentive to pass savings on just isn't strong enough. Competition should theoretically do it, but when every major retailer is playing the same game, prices tend to stay sticky on the way down and responsive on the way up.

Here's the good news buried in all this. The same Reddit thread cited data showing 17 gigawatts of battery capacity is either online or on its way across the national market. Of that, 14 GW is under construction right now and will hit the grid within the next 12 to 24 months.

For context, Australia's typical demand is 22-24 GW. So we're building enough battery storage to handle a massive chunk of the evening peak problem that's currently making bills expensive.

Grid-scale batteries do what your home battery does, but at industrial scale. They charge during the day when solar is abundant and cheap, then discharge during the evening peak, displacing the gas plants that currently set the price. Less gas needed means lower peak prices. Lower peak prices mean lower bills. Eventually.

But “eventually” is the operative word. Those grid batteries aren't all online yet. And even when they are, the benefit has to flow through retailers to reach your bill. Which, as we've established, isn't guaranteed.

Waiting for grid-scale batteries and retailer goodwill to trickle down to your bill isn't really a strategy. Here's what's actually working for people right now.

1. Get a home battery

This is the big one. One Reddit user who added a battery put it simply: “Now I pay supply charge and that's it.”

A home battery lets you store your cheap daytime solar and use it during the evening peak instead of buying from the grid. You're essentially doing at home what those 14 GW of grid batteries will do at scale, just for yourself, right now.

With the federal battery rebate bringing costs down significantly, and battery payback periods now sitting around 3 years in many cases, the economics have shifted hard. Compare the leading battery options to find the right fit for your home. Check the rebate quiz to see what you're eligible for.

2. Switch to a wholesale spot-price retailer

One commenter shared their experience switching to Amber Electric: “My bill went from $140 with Sumo to $50 with Amber including their $25 monthly fee.”

Wholesale spot-price retailers pass the actual market price through to you, good and bad. If you've got solar and a battery, this is powerful. You buy when it's cheap (or free, or even negative), store it, and avoid the evening spikes. Without a battery, it's riskier because you're exposed to those same spikes.

3. Join a VPP

If you've got a battery, a Virtual Power Plant program lets you earn from those same evening price spikes that are making everyone else's bills expensive. Your battery discharges to the grid when prices are high, and you get paid for it. Some programs pay 15-25c/kWh during peak events, 5x more than a standard feed-in tariff.

4. Load-shift to daytime

Simple but effective. Run your dishwasher, washing machine, and pool pump during the day when your solar is producing. If you're home, use timers. If you're not, most appliances have delay-start functions. Every kWh you use from your own panels during the day is a kWh you don't buy from the grid at peak rates that evening. Our guide on maximising solar self-consumption covers 10 practical strategies.

The upcoming Solar Sharer program launching mid-2026 will also offer free daytime electricity for smart-meter homes in NSW, SE Queensland and SA, making daytime usage even more attractive.

Back to the restaurant analogy. Right now, everyone at the table is paying lobster prices because gas gets ordered every evening. Solar solved the lunch menu. Daytime electricity is essentially free. But dinner is still expensive because we don't have enough storage to bridge the gap.

That's changing at grid level with those 14 GW of batteries under construction. But you don't have to wait for that. A home battery lets you order from the cheap daytime menu, store it, and eat it for dinner. Combined with a VPP, you can even get paid when everyone else is ordering lobster.

The people who've already figured this out? They're paying supply charge and that's it. Everyone else is still subsidising gas plants every evening and wondering why their bill keeps going up.

Use our payback calculator to see what a battery could save you, or take the rebate quiz to check which incentives you qualify for. The maths has changed, and for most households, it's changed in your favour.